Dominion Energy (D) 10-K risk factor changes: FY2019 vs FY2018

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 [removed: _Forward-Looking Statements_ in Item 7.]

[removed: The Companies’ results of operations can be affected by changes in the weather.] Fluctuations in weather can affect demand for the Companies’ services.

[removed: The rates of Dominion Energy and Dominion Energy Gas’ gas transmission and distribution operations and Dominion Energy and Virginia Power’s electric transmission, distribution and generation operations are subject to regulatory review.] Revenue provided by [removed: Dominion Energy and Virginia Power’s] [added: the Companies’] electric transmission, distribution and generation operations and [removed: Dominion Energy and Dominion Energy Gas’] [added: by] gas transmission and distribution operations is based primarily on rates approved by state and federal regulatory agencies.

The profitability of [removed: these] [added: the Companies’] businesses is dependent on their ability, through the rates that they are permitted to charge, to recover costs and earn a reasonable rate of return on their capital investment.

[removed: Similarly,] [added: At the federal level, Dominion Energy and Virginia Power’s wholesale rates for electric transmission service and] various rates and charges assessed by Dominion Energy and Dominion Energy Gas’ [added: natural] gas transmission [added: and storage] businesses are [removed: subject to review] [added: regulated] by FERC.

A failure by [removed: Dominion Energy or Dominion Energy Gas] [added: the Companies] to support these rates could result in rate decreases from current rate levels, which could adversely affect [removed: Dominion Energy and Dominion Energy Gas’] [added: the Companies’] results of operations, cash flows and financial condition.

[added: At the state level,] Virginia Power’s [added: retail] base rates, terms and conditions for generation and distribution services to customers in Virginia are reviewed by the Virginia Commission in a proceeding that involves the determination of Virginia Power’s actual earned ROE during a historic test period, and the determination of Virginia Power’s authorized ROE prospectively.

Under certain circumstances described in the Regulation Act, Virginia Power may be required to [removed: share] [added: refund] a portion of its earnings [removed: with] [added: to] customers through a refund [removed: process.][added: process and to reduce its rates.]

[added: In states other than Virginia,] Dominion Energy and Virginia Power’s retail electric base rates for [removed: bundled generation, transmission,] [added: generation] and distribution services to customers [removed: in South Carolina and North Carolina, respectively,] are regulated on a [removed: cost-of-service/rate-of-return basis subject to South Carolina and North Carolina statutes, and the rules and procedures of the South Carolina and North Carolina Commissions.]

If retail electric [added: or gas] earnings exceed the returns established by [removed: the South Carolina Commission and the North Carolina Commission,] [added: state utility commissions,] retail electric rates [added: or gas rates] may be subject to review and [added: possible reduction, which may decrease the Companies’ future earnings.]

[removed: Additionally, if the South Carolina and the North Carolina Commission do] [added: does] not allow recovery through base rates, on a timely basis, of costs incurred in providing service, [removed: Dominion Energy and Virginia Power’s] [added: the Company’s] future earnings could be negatively impacted.

[removed: Governmental] [added: Additionally, governmental] officials, stakeholders and advocacy groups may challenge [added: any of] these regulatory reviews.

[removed: The Companies are subject to complex governmental regulation, including tax regulation, that could adversely affect their results of operations and subject the Companies to monetary penalties.] The Companies’ operations are subject to extensive federal, state and local regulation and require numerous permits, approvals and certificates from various governmental agencies.

Management believes that the necessary approvals have been obtained for existing operations and that the [removed: business is] [added: businesses are] conducted in accordance with applicable laws.

New laws or regulations, the revision or reinterpretation of existing laws or regulations, changes in enforcement practices of regulators, or penalties imposed for [removed: non-compliance with existing laws or regulations may result in substantial additional expense.]

[removed: The 2017 Tax Reform Act could have a material impact on our operations, cash flows, and financial results. Reductions in the estimated annual cost-of-service effect (commonly referred to as the gross-up factor)] [added: Excess accumulated deferred income taxes] due to the reduction in the corporate income tax rates to 21% under the provisions of the 2017 Tax Reform Act have been recognized as [removed: a] regulatory [removed: liability] [added: liabilities] and are expected to be [removed: refunded to] [added: shared with] customers, generally through reductions in future rates or in the form of credits to customer bills.

[removed: Potential reductions in future rates attributable to other, non-plant] related excess deferred taxes may be determined by our regulators.

[removed: The] [added: Additionally, the 2017 Tax Reform Act contains] provisions [removed: generally] [added: that] limit the interest deduction on business interest to (1) business interest income, plus (2) 30 percent of the taxpayer’s adjusted taxable income.

Business interest and business interest income [removed: is] [added: are] defined as that allocable to a trade or business and not investment interest and income.

These proposed regulations provide guidance for purposes of the exception to the interest limitation for regulated public utilities, the application of the interest limitation to consolidated groups, such as Dominion Energy, and the interest limitation with respect [removed: to partnerships and partners in those partnerships.]

[removed: Dominion] [added: Dominion] Energy and Virginia Power’s generation business may be negatively affected by possible FERC actions that could change market design in the wholesale markets or affect pricing rules or revenue calculations in the RTO [removed: markets. Dominion Energy and Virginia Power’s generation stations operating in RTO markets sell capacity, energy and ancillary services into wholesale electricity markets regulated by FERC.][added: markets.]

For example, in [removed: June 2018,] [added: December 2019,] FERC issued an order on PJM’s Minimum Offer Price Rule proposals finding the PJM tariff unjust and unreasonable [removed: because state out-of-market support for resources is suppressing PJM capacity prices] and [added: directed PJM to expand] the [removed: current tariff provisions do not adequately] [added: Minimum Offer Price Rule to all existing and new generation resources benefitting from a state subsidy to] address the [removed: price suppression.][added: effects of state subsidies on new and existing resources on the PJM capacity market.]

[removed: The Companies’ infrastructure] [added: The Companies’ infrastructure] build and expansion plans often require regulatory approval, including environmental permits, before commencing construction and completing projects.

[removed: The] Companies may not complete facility construction, pipeline, conversion or other infrastructure projects that they commence, or they may complete projects on materially different [removed: terms] [added: terms, costs] or timing than initially [added: estimated or] anticipated, and they may [removed: not be] [added: not be] able to achieve the intended benefits of any such [removed: project, if completed. Several facility construction, pipeline, electric transmission line, expansion, conversion and other infrastructure projects have been announced and additional projects may be considered in the future.]

Projects may not be able to be completed on time [added: or in accordance with our estimated costs] as a result of weather conditions, delays in obtaining or failure to obtain regulatory approvals, delays in obtaining key materials, labor difficulties, difficulties with partners or potential partners, a decline in the credit strength of counterparties or vendors, or other factors beyond the Companies’ control.

For example, Atlantic Coast Pipeline has experienced certain delays in obtaining [added: and maintaining] permits necessary for construction along with construction delays due to judicial actions which has impacted the cost and schedule for the Atlantic Coast Pipeline Project.

[removed: Start-up] and operational issues can arise in connection with the commencement of commercial operations at our facilities.

[removed: The development, construction and commissioning of several large-scale infrastructure projects simultaneously involves significant execution risk.] The Companies are currently simultaneously developing, constructing or commissioning several major projects, including the Atlantic Coast Pipeline Project, the Supply Header project and the Coastal Virginia Offshore Wind project.

The advancement of the Companies’ ventures is also affected by the interventions, litigation or other activities of stakeholder and advocacy groups, some of which oppose natural [removed: gas-related and energy infrastructure projects.]

For example, certain landowners and stakeholder groups oppose the Atlantic Coast Pipeline [added: Project, which could impede construction activities or the]

[removed: Project, which could impede construction activities or the acquisition of rights-of-way] and other land rights on a timely basis or on acceptable terms.

[removed: The Companies’ operations and construction activities are subject to a number of environmental laws and regulations which impose significant compliance costs to the Companies.] The Companies’ operations and construction activities are subject to extensive federal, state and local environmental statutes, rules and regulations relating to air quality, water quality, waste management, natural resources, and health and safety.

We expect that existing environmental laws and regulations may be revised and/or new laws may be adopted including regulation of GHG emissions which could have an impact on the Companies’ [removed: business.][added: business (risks relating to regulation of GHG emissions from existing fossil fuel-fired electric generating units are discussed in more detail below).]

The Companies are also subject to federal water and waste regulations, including regulations concerning cooling water intake structures, coal combustion [removed: by-product handling and disposal]

[added: handling and disposal] practices, wastewater discharges from steam electric generating stations, management and disposal of hydraulic fracturing fluids and the potential further regulation of polychlorinated biphenyls.

Other factors which affect the ability to predict future environmental expenditures with certainty include the difficulty in estimating [removed: clean-up costs and quantifying liabilities under environmental laws that impose joint and several liabilities on all responsible parties.]

[removed: Any] [added: Any] additional federal and/or state requirements imposed on energy companies mandating limitations on GHG emissions [removed: or requiring] [added: or requiring] efficiency improvements may result in compliance costs that alone or in combination could make some of the [removed: Companies’ electric] [added: Companies’ electric] generation units or natural gas facilities uneconomical to maintain or [removed: operate. The EPA has proposed the Affordable Clean Energy rule targeted at reducing CO2 emissions from existing fossil fuel-fired power generation facilities as a replacement for the Clean Power Plan which has been stayed.][added: operate.]

For example, the Virginia General Assembly [removed: recently considered] [added: is considering] legislation which would authorize [removed: the state] [added: Virginia] to directly join the RGGI program as a full participant.

Compliance with the [removed: proposed Affordable Clean Energy rule] [added: ACE Rule] or other federal or state carbon [removed: regulations] [added: regulations, such as the RGGI program,] is expected to require increasing the energy efficiency of equipment at facilities, committing significant capital toward carbon reduction programs, purchase of allowances and/or emission [removed: rate] [added: offset] credits, fuel switching, and/or retirement of high-emitting generation facilities and potential replacement with lower-emitting generation facilities.

[removed: Dominion] [added: Dominion] Energy [removed: and Virginia Power are subject] [added: and Virginia Power are subject] to risks associated with the disposal and storage of coal [removed: ash. Dominion Energy and Virginia Power historically produced and continue to produce coal ash, or CCRs, as a by-product of their coal-fired generation operations.][added: ash.]

Forward-Looking Statements

in Item 7.

Regulatory, Legislative and Legal Risks

The rates of the Companies’ electric transmission, distribution and generation operations and gas transmission, storage and distribution operations are subject to regulatory review.

Rates for electric transmission services are updated annually according to a FERC-approved formula rate mechanism, and may be subject to additional prospective adjustments and retroactive corrections.

Rates for gas transmission and storage services are adjusted in rate cases periodically and must reflect recovery of costs plus a reasonable return on investment, in accordance with cost of service ratemaking.

cost-of-service/

rate-of-return

basis subject to the statutes, rules and procedures of such states.

Dominion Energy’s rates for gas distribution to retail customers are similarly regulated at the state level.

Additionally, if any state utility commission

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Under certain circumstances, state utility regulators may impose a moratorium on increases to retail base rates for a specified period of time, which could delay recovery of costs incurred in providing service.

Additionally, pursuant to the SCANA Merger Agreement and applicable indemnification agreements, SCANA is indemnifying former directors and officers of SCANA and DESC who are defendants in federal and state legal proceedings relating to the decision to abandon construction at the NND Project and the subsequent SCANA Combination.

Dominion Energy and Virginia Power’s generation stations operating in RTO markets sell capacity, energy and ancillary services into wholesale electricity markets regulated by FERC.

The expanded Minimum Offer Price Rule will set a floor price on new and existing state subsidized resources that do not seek a FERC exemption, increasing their risk of failing to clear the capacity auction and

not obtaining a capacity payment and obligation.

The Companies are subject to complex governmental regulation, including tax regulation, that could adversely affect

their results of operations and subject the Companies to monetary penalties.

non-compliance

with existing laws or regulations may result in substantial additional expense.

The 2017 Tax Reform Act could have a material impact on the Companies’ operations, cash flows, and financial results.

Potential reductions in future rates attributable to other,

non-plant

| 29 |

to partnerships and partners in those partnerships.

Environmental Risks

The Companies’ operations and construction activities are subject to a number of environmental laws and regulations which impose significant compliance costs on the Companies.

by-product

clean-up

costs and quantifying liabilities under environmental laws that impose joint and several liabilities on all responsible parties.

The ACE Rule, which became effective in September 2019, is targeted at reducing CO

emissions from existing coal-fired power plants.

The ACE

Rule requires states to develop plans by July 2022 to implement CO

performance standards.

State plans must be approved by the EPA by January 2024.

Dominion Energy and Virginia Power historically produced and continue to produce coal ash, or CCRs, as a

However, certain large scale customers are able to enter into negotiated-rate contracts rather than pay cost-of-service rates which are subject to regulatory review.

Dominion Energy and Virginia Power’s wholesale rates for electric transmission service are updated on an annual basis through operation of a FERC-approved formula rate mechanism.

Through this mechanism, Dominion Energy and Virginia Power’s wholesale rates for electric transmission reflect the estimated cost-of-service for each calendar year.

The difference in the estimated cost-of-service and actual cost-of-service for each calendar year is included as an adjustment to the wholesale rates for electric transmission service in a subsequent calendar year.

These wholesale rates are subject to FERC review and prospective adjustment in the event that customers and/or interested state commissions file a complaint with FERC and are able to demonstrate that Dominion Energy or Virginia Power’s wholesale revenue requirement is no longer just and reasonable.

They are also subject to retroactive corrections to the extent that the formula rate was not properly populated with the actual costs.

In addition, the rates of Dominion Energy and Dominion Energy Gas’ gas distribution businesses are subject to state regulatory review in the jurisdictions in which they operate.

| 29 |

possible reduction by the South Carolina Commission and the North Carolina Commission, which may decrease Dominion Energy and Virginia Power’s future earnings, respectively.

In addition, the Companies’ regulators may require the reduction in accumulated deferred income tax balances under the provisions of the 2017 Tax Reform Act to be shared with customers, generally through reductions in future rates or in the form of credits to customer bills.

The 2017 Tax Reform Act could have a material impact on Dominion Energy and Dominion Energy Gas’ FERC-regulated gas operations including rates charged to customers. In light of the reduction in the income tax rate in the 2017 Tax Reform Act, our FERC-regulated gas subsidiaries were required to file

informational reports to substantiate the rates charged for transportation and storage of natural gas in interstate commerce, when viewed holistically, are “just and reasonable” taking into account the effects of the 2017 Tax Reform Act and all other drivers.

It is unclear if FERC will mandate a one-time rate reset or Section 5 rate case for Dominion Energy and Dominion Energy Gas’ FERC-regulated gas subsidiaries; however, any such action could have a material impact on our operations, cash flows and financial results.

The interpretation of provisions of the 2017 Tax Reform Act that take effect in 2019 may significantly impact our operations. The 2017 Tax Reform Act contains provisions that limit the deductibility of interest expense.

FERC is evaluating an alternative that would pull any state supported resource out of the capacity market along with an equivalent amount of load.

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Risks relating to expected regulation of GHG emissions from existing fossil fuel-fired electric generating units are discussed below.

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The Affordable Clean Energy rule would require states to develop plans within three years of the final rule to implement these performance standards.

The ash is stored and managed in

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mental hazards, pole strikes, electric contact cases, the collision of third party equipment with pipelines and avian and other wildlife impacts.

Sustained declines in natural gas and NGL prices have resulted in, and could result in further, curtailments of third-party producers’ drilling programs, delaying the production of volumes of natural gas and NGLs that Dominion Energy and Dominion Energy Gas gather, process, and transport and reducing the value of NGLs retained by Dominion Energy Gas, which may adversely affect Dominion Energy and Dominion

Energy Gas’ revenues and earnings. Dominion Energy and Dominion Energy Gas obtain their supply of natural gas and NGLs from numerous third-party producers.

Most producers are under no obligation to deliver a specific quantity of natural gas or NGLs to Dominion Energy and Dominion Energy Gas’ facilities.

A number of other factors could reduce the volumes of natural gas and NGLs available to Dominion Energy and Dominion Energy Gas’ pipelines and other assets.

Increased regulation of energy extraction activities could result in reductions in drilling for new natural gas wells, which could decrease the volumes of natural gas supplied to Dominion Energy and Dominion Energy Gas.

Producers with direct commodity price exposure face liquidity constraints, which could present a credit risk to Dominion Energy and Dominion Energy Gas.

Producers could shift their production activities to regions outside Dominion Energy and Dominion Energy Gas’ footprint.

In addition, the extent of natural gas reserves and the rate of production from such reserves may be less than anticipated.

If producers were to decrease the supply of natural gas or NGLs to Dominion Energy and Dominion Energy Gas’ systems and facilities for any reason, Dominion Energy and Dominion Energy Gas could experience lower revenues to the extent they are unable to replace the lost volumes on similar terms.

In addition, Dominion Energy Gas’ revenue from processing and fractionation operations largely results from the sale of commodities at market prices.

Dominion Energy Gas receives the wet gas product from producers and may retain the extracted NGLs as compensation for its services.

This exposes Dominion Energy Gas to commodity price risk for the value of the spread between the NGL products and natural gas, and relative changes in these prices could adversely impact Dominion Energy Gas’ results.

| 33 |

of market supply shortages.

Dominion Energy Gas has experienced a decline in demand for certain of its processing services due to competing facilities operating in nearby areas.

The joint ventures operate in accordance with the applicable governing provisions of each entity.

[removed: CONTENTS OF MD&A][added: Contents of MD&A]

| • | [removed: |] Forward-Looking Statements |

| • | [removed: |] Accounting Matters—Dominion Energy |

| • | [removed: |] Dominion Energy |

| | • | [removed: |] Results of Operations |

| | • | [removed: |] Segment Results of Operations |

| • | [removed: |] Virginia Power |

| • | [removed: |] Dominion Energy Gas |

| • | [removed: |] Liquidity and Capital Resources—Dominion Energy |

| • | [removed: |] Future Issues and Other Matters—Dominion Energy |

[removed: FORWARD\-LOOKING STATEMENTS][added: Forward-looking Statements]

| • | [removed: |] Unusual weather conditions and their effect on energy sales to customers and energy commodity prices; |

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

| • | [removed: |] Federal, state and local legislative and regulatory developments, including changes in federal and state tax laws and regulations; |

| • | [removed: |] 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; |

| • | [removed: |] Cost of environmental compliance, including those costs related to climate change; |

| • | [removed: |] Changes in implementation and enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities; |

| • | [removed: |] Difficulty in anticipating mitigation requirements associated with environmental and other regulatory approvals or related appeals; |

| • | [removed: |] 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; |

| • | [removed: |] Unplanned outages at facilities in which the Companies have an ownership interest; |

| • | [removed: |] Fluctuations in energy-related commodity prices and the effect these could have on Dominion [removed: Energy and Dominion Energy Gas’] [added: Energy’s] earnings and the Companies’ liquidity position and the underlying value of their assets; |

| • | [removed: |] Counterparty credit and performance risk; |

| • | [removed: |] Global capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms; |

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

| • | [removed: |] 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; |

| • | [removed: |] Fluctuations in interest rates or foreign currency exchange rates; |

| • | [removed: |] Changes in rating agency requirements or credit ratings and their effect on availability and cost of capital; |

| • | [removed: |] Changes in financial or regulatory accounting principles or policies imposed by governing [removed: bodies;] [added: bodies.] |

| • | [removed: |] Employee workforce factors including collective bargaining agreements and labor negotiations with union employees; [added: and] |

| • | [removed: |] Risks of operating businesses in regulated industries that are subject to changing regulatory structures; |

| • | [removed: |] Impacts of acquisitions, [removed: including the recently completed SCANA Combination,] divestitures, transfers of assets to joint ventures and retirements of assets based on asset portfolio reviews; |

| • | [removed: |] Receipt of approvals for, and timing of, closing dates for acquisitions and divestitures; |

| • | [removed: |] Changes in rules for RTOs and ISOs in which Dominion Energy and Virginia Power [added: join and/or] participate, including changes in rate designs, changes in FERC’s interpretation of market rules and new and evolving capacity models; |

| • | [removed: |] Political and economic conditions, including inflation and deflation; |

| • | [removed: |] Domestic terrorism and other threats to the Companies’ physical and intangible assets, as well as threats to cybersecurity; |

| • | [removed: |] Changes in demand for the Companies’ services, including industrial, commercial and residential growth or decline in the Companies’ service areas, changes in supplies of natural gas delivered to Dominion Energy and Dominion Energy Gas’ pipeline [removed: and processing] systems, failure to maintain or replace customer contracts on favorable terms, changes in customer growth or usage patterns, including as a result of [added: energy conservation programs, the availability of energy efficient devices and the use of distributed generation methods;] |

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

| • | [removed: |] Competition in the development, construction and ownership of certain electric transmission facilities in Dominion Energy and Virginia Power’s service [removed: territories] [added: territory] in connection with Order 1000; |

| • | [removed: |] Changes in technology, particularly with respect to new, developing or alternative sources of generation and smart grid technologies; |

| • | [removed: |] Changes to regulated electric rates collected by Dominion Energy and Virginia Power and regulated gas distribution, transportation and storage rates, including LNG storage, collected by Dominion Energy and Dominion Energy Gas; |

| | • | Results of Operations |

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

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

| • | Fluctuations in future volumes of LNG imports or exports from the U.S. and other countries worldwide or demand for, purchases of, and prices related to natural gas or LNG; |

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For regulated businesses subject to federal or state

cost-of-service

These analyses are generally based on:

| | • | Orders issued by regulatory commissions, legislation and judicial actions; |

| | • | Past experience; |

| | • | Discussions with applicable regulatory authorities and legal counsel; |

| | • | Forecasted earnings; and |

| | • | Considerations around the likelihood of impacts from events such as unusual weather conditions, extreme weather events and other natural disasters and unplanned outages of facilities. |

A regulatory liability, if considered probable, will be recorded in the period such assessment is made or reversed into earnings if no longer probable.

In the

| 47 |

These nuclear decommissioning AROs are reported in Dominion Energy Virginia, Dominion Energy South Carolina and Contracted Generation.

At December 31, 2019, Dominion Energy’s nuclear decommissioning AROs totaled $1.7 billion.

These cash flows include estimates on timing of decommissioning, which for regulated nuclear units factors in the probability of NRC approval for license extensions.

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| | | energy conservation programs, the availability of energy efficient devices and the use of distributed generation methods; |

Dominion Energy has discussed the development, selection

Generally, regulatory assets and liabilities are amortized into income over the period authorized by the regulator.

The expectations of future recovery are generally based on orders issued by regulatory commissions, legislation or historical experience, as well as discussions with applicable regulatory authorities and legal counsel.

Dominion Energy accretes the ARO liability to reflect the passage of time.

In 2018, Dominion Energy recorded an increase in AROs of $140 million primarily related to future ash pond and landfill closure costs at certain generation facilities.

| 48 | | | | |

In 2018, 2017 and 2016, Dominion Energy recognized $119 million, $117 million and $104 million, respectively, of accretion, and expects to recognize approximately $145 million in 2019.

Dominion Energy records accretion and depreciation associated with utility nuclear decommissioning AROs and regulated pipeline replacement AROs as an adjustment to the regulatory liabilities related to these items.

These nuclear decommissioning AROs are reported in the Power Generation segment.

Subsequent to the SCANA Combination, SCANA’s nuclear decommissioning AROs will be reported in the Southeast Energy segment.

At December 31, 2018, Dominion Energy’s nuclear decommissioning AROs totaled $1.6 billion, representing approximately 62% of its total AROs.

Subsequent to the SCANA Combination, Dominion Energy’s nuclear decommissioning AROs will total approximately $1.8 billion, representing approximately 55% of its total AROs.

$44 million of unrecognized tax benefits.

| 49 |

A significant portion resulted from the acquisition of the former CNG in 2000 and the Dominion Energy Questar Combination in 2016.

As discussed in Note 3 to the Consolidated Financial Statements, Dominion Energy expects to reflect a significant amount of goodwill in connection with the SCANA Combination in its Consolidated Balance Sheet in the first quarter of 2019.

As a result, Dominion Energy evaluated the carrying amount of its equity

| 50 | | | | |

Mortality rates are developed from actual and projected plan experience for postretirement benefit plans.

Dominion Energy’s actuary conducts an experience study periodically as part of the process to select its best estimate of mortality.

Dominion Energy considers both standard mortality tables and improvement factors as well as the plans’ actual experience when selecting a best estimate.

During 2016, Dominion Energy conducted a new experience study as scheduled and, as a result, updated its mortality assumptions.

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| 51 |

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These increases were partially offset by lower renewable energy investment tax credits and charges associated with equity method investments in wind-powered generation facilities.

| 52 | | | | |

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

| • | | An $86 million increase due to additional generation output from merchant solar generating projects; |

| • | | A $71 million increase in sales to electric utility retail customers due to the effect of changes in customer usage and other factors, including $25 million related to customer growth; |

| • | | A $114 million decrease due to unfavorable pricing at merchant generation facilities; and |

| • | | A $197 million absence of charges related to future ash pond and landfill closure costs at certain utility generation facilities; |

| • | | The absence of organizational design initiative costs ($64 million); and |

| • | | A $46 million decrease in storm damage and service restoration costs associated with electric utility operations, partially offset by |

[removed: MARKET RISK SENSITIVE INSTRUMENTS AND RISK MANAGEMENT][added: Market Risk Sensitive Instruments And Risk Management]

Commodity price risk is present in Dominion Energy and Virginia Power’s electric operations and Dominion Energy and Dominion Energy Gas’ [added: 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.]

[removed: Commodity] [added: Commodity] Price [removed: Risk][added: Risk]

To manage price risk, Dominion Energy and Virginia Power hold commodity-based derivative instruments held for [removed: non-trading purposes associated with purchases and sales of electricity, natural gas and other energy-related products and Dominion Energy Gas primarily holds commodity-based financial derivative instruments held for non-trading purposes associated with sales of NGLs.]

A hypothetical 10% decrease in commodity prices would have resulted in a decrease in fair value of [removed: $6] [added: $50] million and [removed: $5] [added: $6] million of Dominion Energy’s commodity-based derivative instruments as of December 31, [removed: 2018] [added: 2019] and December 31, [removed: 2017,] [added: 2018,] respectively.

A hypothetical 10% decrease in commodity prices of Virginia Power’s commodity-based derivative instruments would have resulted in a decrease in fair value of [added: $54 million and] $51 million as of [removed: both] December 31, [removed: 2018] [added: 2019] and December 31, [removed: 2017,] [added: 2018,] respectively.

A hypothetical 10% [removed: increase] [added: decrease] in [removed: commodity prices] [added: market interest rates would not have resulted in a material decrease in fair value] of Dominion Energy Gas’ [removed: commodity-based financial derivative instruments] [added: foreign currency swaps at December 31, 2019 and] would have resulted in a decrease [added: of $8 million] in [added: the] fair value of [removed: $1 million and $4 million as of December 31, 2018 and] [added: Dominion Energy Gas’ foreign currency swaps at] December 31, [removed: 2017, respectively.][added: 2018.]

[removed: Interest] [added: Interest] Rate [removed: Risk][added: Risk]

For variable rate debt outstanding for Virginia [removed: Power and Dominion Energy Gas,] [added: Power,] a hypothetical 10% increase in market interest rates would not have resulted in a material change in earnings at December 31, [removed: 2018] [added: 2019] or December 31, [removed: 2017.][added: 2018.]

The Companies also use interest rate derivatives, including forward-starting swaps, [removed: as cash flow hedges of forecasted] interest [removed: payments.][added: rate swaps and interest rate lock agreements to manage interest rate risk.]

As of December 31, 2018, Dominion Energy, Virginia Power and Dominion Energy Gas had [removed: $5.9] [added: $6.6] billion, $1.9 billion and [removed: $1.1] [added: $1.4] 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 [removed: $147] [added: $142] million, $94 million and $17 million, respectively, in the fair value of Dominion Energy, Virginia Power and Dominion Energy Gas’ interest rate derivatives at December 31, 2018.

As of December 31, [removed: 2017,] [added: 2019,] Dominion [removed: Energy and] [added: Energy,] Virginia Power [added: and Dominion Energy Gas] had [removed: $3.5] [added: $6.4 billion, $1.9] billion and [removed: $1.5] [added: $1.3] billion, respectively, in aggregate notional amounts of these interest rate derivatives outstanding.

A hypothetical 10% decrease in market interest rates would have resulted in a decrease of [removed: $86] [added: $135 million, $88] million and [removed: $67] [added: $17] million, respectively, in the fair value of Dominion [removed: Energy and] [added: Energy,] Virginia [removed: Power’s] [added: Power and Dominion Energy Gas’] interest rate derivatives at December 31, [removed: 2017.][added: 2019.]

[removed: During 2016,] Dominion Energy Gas [removed: entered into] [added: holds] foreign currency swaps with the purpose of hedging the foreign currency exchange risk associated with Euro denominated debt.

[removed: As of December 31, 2018 and December 31, 2017, Dominion Energy and Dominion Energy Gas had $280 million (€] 250 [removed: million)] [added: million] in aggregate notional amounts of these foreign currency swaps outstanding.

[removed: A] [added: For variable rate debt outstanding for Dominion Energy Gas, a] hypothetical 10% [removed: decrease] [added: increase] in market interest rates would [added: not] have resulted in a [removed: decrease of $8 million and $6 million,] [added: material change] in [removed: the fair value of Dominion Energy Gas’ foreign currency swaps] [added: earnings] at December 31, [removed: 2018] [added: 2019] and [added: would have resulted in a $16 million decrease in earnings at] December 31, [removed: 2017, respectively.][added: 2018.]

[removed: Investment] [added: Investment] Price [removed: Risk][added: Risk]

Dominion Energy and Virginia Power 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 [removed: investment managers.]

Dominion Energy recognized net investment losses (including investment income) on nuclear decommissioning [removed: and rabbi] trust investments of $135 million for the year ended December 31, 2018.

[added: Virginia Power recognized net] investment [added: gains (including investment] income) on nuclear decommissioning trust investments of [removed: $167] [added: $481] million for the year ended December 31, [removed: 2017.][added: 2019.]

Dominion Energy recorded, in AOCI and regulatory liabilities, a net [removed: decrease] [added: increase] in unrealized gains on debt investments of [removed: $36] [added: $74] million for the year ended December 31, [removed: 2018] [added: 2019] and recorded a net [removed: increase] [added: decrease] in unrealized gains on debt [removed: and equity] investments of [removed: $462] [added: $36] million for the year ended December 31, [removed: 2017.][added: 2018.]

[removed: Virginia Power] [added: Dominion Energy] recognized net [removed: realized] [added: investment] gains (including investment income) on nuclear decommissioning [added: and rabbi] trust investments of [removed: $76 million] [added: $1 billion] for the year ended December 31, [removed: 2017.][added: 2019.]

Virginia Power recorded, in AOCI and regulatory liabilities, a net [removed: decrease] [added: increase] in unrealized gains on debt investments of [removed: $21] [added: $30] million for the year ended December 31, [removed: 2018] [added: 2019] and recorded a net [removed: increase] [added: decrease] in unrealized gains on debt [removed: and equity] investments of [removed: $216] [added: $21] million for the year ended December 31, [removed: 2017.][added: 2018.]

Dominion Energy’s pension and other postretirement plan assets experienced aggregate actual returns (losses) of [added: $2.1 billion and] $(605) million [removed: and $1.6 billion] in [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively, versus expected returns of [removed: $806] [added: $848] million and [removed: $767] [added: $806] million, respectively.

Dominion Energy Gas’ pension and other postretirement plan assets for employees represented by collective bargaining units experienced aggregate actual returns (losses) of [removed: $(129)] [added: $167] million and [removed: $335] [added: $(129)] million in [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively, versus expected returns of [removed: $178] [added: $70] million and [removed: $165] [added: $178] million, respectively.

[removed: Differences between actual and] expected returns on plan assets are accumulated and amortized during future periods.

A hypothetical 0.25% decrease in the assumed long-term rates of return on Dominion Energy’s plan assets would result in an increase in net periodic cost of [added: $23 million and] $19 million as of [removed: both] December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018, respectively,] for pension benefits and [added: $5 million and] $4 million as of [removed: both] December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018, respectively,] for other postretirement benefits.

A hypothetical 0.25% decrease in the assumed long-term rates of return on Dominion Energy Gas’ plan assets, for employees represented by collective bargaining units, would result in an increase in net periodic cost of [added: $2 million and] $4 million as of [removed: both] December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018, respectively,] for pension benefits and $1 million as of [removed: both] December 31, 2018 [removed: and 2017,] for other postretirement benefits.

[removed: Risk] [added: Risk] Management [removed: Policies][added: Policies]

Dominion Energy maintains credit policies that include the evaluation of a prospective counterparty’s financial condition, collateral requirements where deemed necessary and [added: the use of standardized agreements that facilitate the netting of cash flows associated with a single counterparty.]

Based on these credit policies and the Companies’ December 31, [removed: 2018] [added: 2019] provision for credit losses, management believes that it is unlikely that a material adverse effect on the Companies’ financial position, results of operations or cash flows would occur as a result of counterparty nonperformance.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 66 | | | | | | | | |

non-trading

purposes associated with purchases and sales of electricity, natural gas and other energy-related products.

Dominion Energy Gas’ operations are contracted primarily under long-term fixed reservation agreements.

Accordingly, management believes that Dominion Energy Gas is not subject to material commodity price risk.

For variable rate debt outstanding for Dominion Energy, a hypothetical 10% increase in market interest rates would not have resulted in a material change in earnings at December 31, 2019 and would have resulted in a $24 million decrease in earnings at December 31, 2018.

As of December 31, 2019 and December 31, 2018, Dominion Energy and Dominion Energy Gas had

| 67 |

investment managers.

Differences between actual and

This hypothetical decrease would result in an immaterial change in net periodic cost to Dominion Energy Gas for other postretirement benefits as of December 31, 2019.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 68 | | | | | | | | |

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.

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 Dominion Energy, a hypothetical 10%

| | | | | |

| --- | --- | --- | --- | --- |

| 66 | | | | |

increase in market interest rates would result in a $24 million and $12 million decrease in earnings at December 31, 2018 and December 31, 2017, respectively.

Dominion Energy Gas had no interest rate derivatives outstanding at December 31, 2017.

Dominion Energy recognized net realized gains (including

| 67 |

the use of standardized agreements that facilitate the netting of cash flows associated with a single counterparty.

| 68 | | | | |

[removed: GENERAL][added: General]

[removed: _Dominion Energy_,] [added: ,] headquartered in Richmond, Virginia and incorporated in Virginia in 1983, is one of the nation’s largest producers and transporters of energy.

Dominion Energy’s strategy is to be a leading sustainable provider of electricity, natural gas and related services to customers primarily in the eastern and Rocky Mountain regions of the U.S. As of December 31, [removed: 2018,] [added: 2019,] Dominion Energy’s portfolio of assets [removed: included] [added: includes] approximately [removed: 26,000] [added: 30,700] MW of electric generating capacity, [removed: 6,700] [added: 10,400] miles of electric transmission lines, [removed: 58,300] [added: 85,000] miles of electric distribution lines, [removed: 14,800] [added: 14,600] miles of natural gas transmission, gathering and storage pipelines and [removed: 52,300] [added: 103,400] miles of gas distribution pipeline, exclusive of service lines.

As of December 31, [removed: 2018,] [added: 2019,] Dominion Energy [removed: served] [added: serves] more than [removed: 5] [added: 7] million utility and retail energy customers and [removed: operated] [added: operates] one of the nation’s largest underground natural gas storage systems, with approximately 1 trillion cubic feet of storage capacity.

In January 2019, Dominion Energy completed the SCANA Combination in a [removed: stock-for-stock merger valued at $13.4 billion.]

[removed: SCANA] [added: SCANA, which operates as a wholly-owned subsidiary of Dominion Energy,] is primarily engaged in the generation, transmission and distribution of electricity in the central, southern and southwestern portions of South Carolina and in the distribution of natural gas in North Carolina and South Carolina.

The [added: $26 billion growth] capital [removed: investment program] [added: plan] for 2019 through 2023 includes a focus on upgrading the electric [removed: grid] [added: system] in Virginia through investments in additional renewable generation facilities, strategic [removed: undergrounding,] [added: undergrounding and] energy conservation [removed: programs and smart-grid devices.][added: programs.]

Other drivers for the [added: growth] capital [removed: investment program] [added: expenditure plan] include [added: agriculture-waste-to-energy initiatives,] the [added: replacement of gas distribution pipeline, the] construction of infrastructure to handle the increase in natural gas production from the Marcellus and Utica Shale formations, including investing in Atlantic Coast Pipeline which is focused on constructing an approximately [removed: 600-mile natural gas pipeline running from West Virginia through Virginia to North Carolina, to increase natural gas supplies in the region.]

Dominion Energy also plans to [removed: upgrade] [added: continue upgrading] its gas and electric transmission and distribution networks [removed: and meet] [added: while also meeting] environmental requirements and standards set by various regulatory bodies.

[added: Over the past decade,] Dominion Energy has transitioned [removed: over the past decade] to a more regulated, less volatile earnings mix as evidenced by its capital investments in regulated infrastructure, including the SCANA Combination and Dominion Energy Questar Combination, and in infrastructure [removed: whose] [added: with] output [removed: is] sold under long-term purchase agreements, as well as the [removed: sales] [added: divestiture] of [added: interests in] certain merchant generating facilities and [removed: equity method investments in 2018] [added: natural gas gathering] and [removed: the electric retail energy marketing business in March 2014.][added: processing investments.]

[removed: Dominion Energy expects approximately 95% of] earnings from its primary operating segments to come from regulated and long-term contracted businesses.

Dominion Energy’s nonregulated operations include merchant [removed: generation, energy marketing and price risk management activities] [added: generation] and natural gas retail energy marketing operations.

[removed: _Virginia Power_,] [added: ,] headquartered in Richmond, Virginia and incorporated in Virginia in 1909 as a Virginia public service corporation, is a wholly-owned subsidiary of Dominion Energy and a regulated public utility that generates, transmits and distributes electricity for sale in Virginia and North Carolina.

[removed: _Dominion Energy Gas,_ a limited liability company formed in September 2013,] is a wholly-owned subsidiary of Dominion Energy and a holding company.

[added: In addition,] Dominion Energy Gas’ [removed: principal] wholly-owned [removed: subsidiaries are DETI,] [added: subsidiaries,] East [removed: Ohio, DGP] [added: Ohio] and [added: DGP, were distributed to] Dominion [removed: Iroquois.][added: Energy.]

[removed: DETI is an] [added: FERC regulated] interstate natural gas [removed: transmission] pipeline [removed: company serving a broad mix of customers such as] [added: providing service to] local gas distribution companies, [removed: marketers, interstate] [added: electric utilities] and [removed: intrastate pipelines,] electric power [removed: generators] [added: generators, as well as marketers] and [removed: natural gas producers.][added: other]

[removed: At December 31, 2018,] [added: In addition,] Dominion Energy Gas holds a [removed: 24.07%] [added: 50%] noncontrolling partnership interest in Iroquois, a FERC-regulated interstate natural gas [removed: pipeline in New York and Connecticut.][added: pipeline.]

[removed: EMPLOYEES][added: Employees]

[removed: Immediately following the SCANA Combination,] [added: At December 31, 2019,] Dominion Energy had approximately [removed: 21,300] [added: 19,100] full-time employees, of which approximately [removed: 6,200] [added: 5,400] are subject to collective bargaining agreements, including approximately [removed: 6,800] [added: 6,000] full-time employees at Virginia Power, of which approximately [removed: 2,900] [added: 2,500] are subject to collective bargaining agreements and approximately [removed: 3,100] [added: 1,400] full-time employees at Dominion Energy Gas, of which approximately [removed: 2,100] [added: 700] are subject to collective bargaining agreements.

[removed: WHERE YOU CAN FIND MORE INFORMATION ABOUT THE COMPANIES][added: Where You Can Find More Information About The Companies]

[removed: The Companies make their SEC filings available, free of charge, including the annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K] and any amendments to those reports, through Dominion Energy’s website, http://www.dominionenergy.com, as soon as reasonably practicable after filing or furnishing the material to the SEC.

Information contained on Dominion Energy’s website, including but not limited to reports mentioned in [removed: _Environmental Strategy_, is not incorporated by reference in this report.]

[removed: ACQUISITIONS AND DISPOSITIONS][added: Acquisitions and Dispositions]

[removed: ACQUISITION OF SCANA][added: Acquisition of SCANA]

[removed: In January 2019, Dominion Energy and SCANA completed a stock-for-stock] merger valued at $13.4 billion, inclusive of SCANA’s outstanding debt, which totaled $6.9 billion at closing.

See Note [removed: 3] [added: 20] to the Consolidated Financial Statements for additional information.

[removed: PURCHASE OF DOMINION ENERGY MIDSTREAM UNITS][added: Purchase of Dominion Energy Midstream Units]

In January 2019, Dominion Energy acquired all outstanding partnership interests of Dominion Energy Midstream not owned [added: by Dominion Energy through the issuance of 22.5 million shares of Dominion Energy common stock.]

See Note [removed: 19] [added: 9] to the Consolidated Financial Statements for additional information.

[removed: SALE OF CERTAIN MERCHANT GENERATION FACILITIES][added: Sale of Certain Merchant Generation Facilities]

[removed: SALE OF INTEREST IN BLUE RACER][added: Sale of Interest in Blue Racer]

[removed: ACQUISITION OF DOMINION ENERGY QUESTAR][added: Acquisition of Dominion Energy Questar]

[removed: ACQUISITION OF WHOLLY\-OWNED MERCHANT SOLAR PROJECTS][added: Acquisition of Wholly-Owned Merchant Solar Projects]

Throughout 2017, Dominion Energy completed the acquisition of various [removed: wholly-owned] merchant solar projects in California, North Carolina and Virginia for $356 million.

Throughout 2016, Dominion Energy completed the acquisition of various [removed: wholly-owned] merchant solar projects in North Carolina, South Carolina and Virginia for $32 million.

Throughout 2015, Dominion Energy completed the acquisition of various [removed: wholly-owned] merchant solar projects in California and Virginia for $381 million.

The projects [added: closed in 2018 and 2019 with a total] cost [removed: $578 million to construct,] [added: of $282 million,] including [removed: the] initial acquisition [removed: cost,] [added: costs,] and generate [removed: 179 MW.][added: 155 MW combined.]

[removed: ACQUISITION OF VIRGINIA POWER SOLAR PROJECTS][added: Acquisition of Virginia Power Solar Projects]

In 2018, Virginia Power entered into agreements to acquire [removed: two] [added: various] solar development projects in North Carolina and Virginia.

[removed: The] [added: These] projects are expected to [removed: close in 2019 and 2020 with] [added: cost] a total [removed: expected cost] of [removed: $250] [added: approximately $425] million once constructed, including the initial acquisition cost, and [removed: will] generate approximately [removed: 155] [added: 241] MW combined.

stock-for-stock

merger valued at $13.4 billion.

DESC, a wholly-owned subsidiary of SCANA, is consolidated by Dominion Energy and remains an SEC registrant.

However, its Form

10-K

is filed separately and is not combined herein.

600-mile

natural gas pipeline running from West Virginia through Virginia to North Carolina, to increase natural gas supplies in the region.

Dominion Energy expects approximately 95% of

a limited liability company formed in September 2013,

Following the Dominion Energy Gas Restructuring, Dominion Energy Gas serves as the intermediate parent company for Dominion Energy’s FERC-regulated interstate natural gas transmission pipeline and underground storage systems in the eastern and Rocky Mountain regions of the U.S., as well as for the Cove Point LNG Facility.

Dominion Energy Gas’ principal operating subsidiaries include DETI, DECG, Dominion Energy Questar Pipeline and a controlling 75% interest in Cove Point.

The Companies make their SEC filings available, free of charge, including the annual report on Form

10-K,

quarterly

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 8 | | | | | | | | |

reports on Form

10-Q,

current reports on Form

8-K

, is not incorporated by reference in this report.

Pending Acquisition of Interest in Atlantic Coast Pipeline and Pivotal LNG, Inc.

In February 2020, Dominion Energy entered into agreements with Southern to acquire its 5% membership interest in Atlantic Coast Pipeline and its 100% ownership interest in Pivotal LNG, Inc., for approximately $175 million in aggregate, plus certain purchase price adjustments.

In January 2019, Dominion Energy and SCANA completed a

stock-for-stock

Dominion Energy Gas Restructuring

In November 2019, Dominion Energy Gas finalized a restructuring whereby Dominion Energy’s wholly-owned subsidiaries, DCP and DMLPHCII, were contributed to Dominion Energy Gas.

This restructuring was accounted for by Dominion Energy Gas as a reorganization of entities under common control.

Sale of Interest in Cove Point

In December 2019, Dominion Energy completed the sale of a 25% noncontrolling interest in Cove Point to Brookfield in exchange for cash consideration of $2.1 billion, subject to working capital adjustments.

Acquisition of Interest in Wrangler

In December 2019, Dominion Energy acquired a 20% noncontrolling interest in Wrangler, a partnership with Interstate Gas Supply, Inc., along with $301 million in cash as part of its initial contribution of certain retail energy marketing operations.

In 2019, Dominion Energy completed the acquisition of various merchant solar projects in North Carolina, South Carolina and Virginia.

In 2019, Virginia Power entered into agreements to acquire various solar development projects in Virginia.

These projects closed in 2019 with a total cost of $297 million, including initial acquisition costs, and generate 175 MW combined.

| 9 |

ten-year

term.

In addition, SCANA markets natural gas to retail customers in the southeast U.S. Following the completion of the SCANA Combination, Dominion Energy’s portfolio of assets includes approximately 32,000 MW of electric generating capacity, 10,200 miles of electric transmission lines, 84,800 miles of electric distribution lines, 15,900 miles of natural gas transmission, gathering and storage pipelines and 92,900 miles of gas distribution pipeline, exclusive of service lines.

Dominion Energy operates approximately 1 trillion cubic feet of natural gas storage capacity and serves nearly 7.5 million utility and retail energy customers.

SCANA and one of its wholly-owned subsidiaries, SCE&G, are currently SEC registrants.

SCANA and SCE&G file a combined Form 10-K, which is not combined herein.

It serves as the intermediate parent company for certain of Dominion Energy’s regulated natural gas operating subsidiaries, which conduct 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.

The DETI system links to other major pipelines and markets in the mid-Atlantic, Northeast, and Midwest including Dominion Energy’s Cove Point Pipeline.

DETI also operates one of the largest underground natural gas storage systems in the U.S. In August 2016, DETI transferred its gathering and processing facilities to DGP.

East Ohio is a regulated natural gas distribution operation serving residential, commercial and industrial gas sales and transportation customers.

Its service territory includes Cleveland, Akron, Canton, Youngstown and other eastern and western Ohio communities.

| | | | | |

| --- | --- | --- | --- | --- |

| 8 | | | | |

Following completion of the SCANA Combination, SCANA operates as a wholly-owned subsidiary of Dominion Energy.

In connection with the SCANA Combination, SCE&G will provide refunds and restitution of $2.0 billion over 20 years with capital support from Dominion Energy that, along with the benefit of the 2017 Tax Reform Act, is expected to result in an approximate 15% reduction to SCE&G electric service customers’ bills, compared to May 2017, as well as exclude from rate recovery $2.4 billion of costs related to the NND Project and $180 million of costs associated with the purchase of the Columbia Energy Center power station.

by Dominion Energy through the issuance of 22.5 million common shares.

Throughout 2014, Dominion Energy completed the acquisition of various wholly-owned solar development projects in California for $200 million.

The first proj-

| 9 |

the value of Dominion Energy Midstream’s common units at closing.

| 10 | | | | |

produced from the acreage.

In March 2014, Dominion Energy completed the sale of its electric retail energy marketing business.

The proceeds were $187 million, net of transaction costs.

SALE OF PIPELINES AND PIPELINE SYSTEMS

In March 2014, Dominion Energy Gas sold the Northern System to an affiliate that subsequently sold the Northern System to Blue Racer for consideration of $84 million.

Dominion Energy Gas’ consideration consisted of $17 million in cash proceeds and the extinguishment of affiliated current borrowings of $67 million and Dominion Energy’s consideration consisted of cash proceeds of $84 million.

Virginia Power manages its daily operations through two primary operating segments: Power Delivery and Power Generation.

| | | | | | | | | | | | | | | |

| Power Delivery | | Regulated electric distribution | | | X | | | | X | | | | | |

| _(1)_ | _Includes remaining producer services activities._ |

| _(2)_ | _Consists of the operations of SCANA._ |

Power Delivery

| 11 |

In the future, safety, electric service reliability, outage durations and customer service will remain key focus areas for electric distribution.

Virginia Power’s electric transmission operations will continue to focus on safety, operational performance, NERC compliance and execution of PJM’s RTEP.

Virginia Power’s wholesale electric transmission rates, tariffs and terms of service

are subject to regulation by FERC.

Electric transmission siting authority remains the jurisdiction of the Virginia and North Carolina Commissions.

However, EPACT provides FERC with certain backstop authority for transmission siting.

Properties.

See Notes 13 and [removed: 22] [added: 23] to the Consolidated Financial Statements and [removed: _Future Issues and Other Matters_ in Item 7.]

Future Issues and Other Matters

in Item 7.

See also Note 3 to the Consolidated Financial Statements, which information is incorporated herein by reference, for a discussion of various legal proceedings to which SCANA and SCE&G were a party to at the closing of the SCANA Combination.

[removed: UNITED STATES][added: UNITED STATES]

[removed: SECURITIES] [added: SECURITIES] AND EXCHANGE [removed: COMMISSION][added: COMMISSION]

[removed: Washington,] [added: Washington,] D.C. [removed: 20549][added: 20549]

[removed: FORM 10-K][added: FORM]

[removed: (Mark One)][added: (Mark One)]

| ☒ | [removed: ANNUAL] [added: ANNUAL] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the fiscal year ended December 31, [removed: 2018][added: 2019]

| ☐ | [removed: TRANSITION] [added: TRANSITION] REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF [removed: 1934] [added: 1934] |

[removed: For] [added: For] the transition period from [removed: to][added: to]

| [removed: Commission] [added: Commission] File [removed: Number] [added: Number] | | [removed: Exact] [added: Exact] name of registrants as specified in their [removed: charters] [added: charters] | | [removed: I.R.S. Employer Identification Number] [added: I.R.S. Employer Identification Number] |

| [removed: 001-08489] [added: 001-08489] | | [removed: DOMINION] [added: DOMINION] ENERGY, [removed: INC.] [added: INC.] | | [removed: 54-1229715] [added: 54-1229715] |

| [removed: 000-55337] [added: 000-55337] | | [removed: VIRGINIA] [added: VIRGINIA] ELECTRIC AND POWER [removed: COMPANY] [added: COMPANY] | | [removed: 54-0418825] [added: 54-0418825] |

| [removed: 001-37591] [added: 001-37591] | | [removed: DOMINION] [added: DOMINION] ENERGY GAS HOLDINGS, [removed: LLC] [added: LLC] | | [removed: 46-3639580] [added: 46-3639580] |

| | | [removed: VIRGINIA _(State] [added: VIRGINIA (State] or other jurisdiction of incorporation or [removed: organization)_] [added: organization)] | | |

| | | [removed: 120] [added: 120] TREDEGAR [removed: STREET RICHMOND, VIRGINIA _(Address] [added: STREET RICHMOND, VIRGINIA (Address] of principal executive [removed: offices)_] [added: offices)] | | [removed: 23219 _(Zip Code)_] [added: 23219 (Zip Code)] |

| | | [removed: (804) 819-2000 _(Registrants’] [added: (804) 819-2000 (Registrants’] telephone [removed: number)_] [added: number)] | | |

[removed: Securities] [added: Securities] registered pursuant to Section 12(b) of the [removed: Act:][added: Act:]

| [removed: Registrant] [added: Registrant] | | [removed: Title] [added: Trading Symbol | | Title] of Each [removed: Class] [added: Class] | | [removed: Name] [added: Name] of Each [removed: Exchange on] [added: Exchange on] Which [removed: Registered] [added: Registered] |

| [removed: DOMINION] [added: DOMINION] ENERGY, [removed: INC.] [added: INC.] | | [added: D | |] Common Stock, no par value | | New York Stock Exchange |

| | | [added: DRUA | |] 2016 Series A [removed: 6.75% Corporate Units] [added: 5.25% Enhanced Junior Subordinated Notes] | | New York Stock Exchange |

| [removed: DOMINION] [added: DOMINION] ENERGY [removed: GAS HOLDINGS, LLC] [added: GAS HOLDINGS, LLC] | | [added: DCUE | | 2019 Series A Corporate Units] 2014 Series C 4.6% Senior Notes | | New York Stock Exchange [added: New York Stock Exchange] |

[removed: Securities] [added: Securities] registered pursuant to Section 12(g) of the [removed: Act:][added: Act:]

[removed: VIRGINIA ELECTRIC AND POWER COMPANY][added: Virginia Electric and Power Company]

[removed: DOMINION ENERGY GAS HOLDINGS, LLC][added: Dominion Energy Gas Holdings, LLC]

[added: represents separate filings by] Dominion Energy, [removed: Inc. Yes ☒ No ☐] [added: Inc.,] Virginia Electric and Power Company [removed: Yes ☒ No ☐] [added: and] Dominion Energy Gas Holdings, [removed: LLC Yes ☒ No ☐][added: LLC.]

[removed: Dominion Energy, Inc. Yes ☐ No ☒] Virginia Electric and Power Company [removed: Yes ☐ No ☒] [added: and] Dominion Energy Gas Holdings, LLC [removed: Yes ☐ No ☒][added: make no representations as to the information relating to Dominion Energy, Inc.’s other operations.]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation [removed: S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).]

[removed: Dominion Energy, Inc. ☒ Virginia Electric and Power Company ☒ Dominion Energy Gas Holdings,] [added: VIRGINIA ELECTRIC AND POWER COMPANY AND DOMINION ENERGY GAS HOLDINGS,] LLC [removed: ☒][added: MEET THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION I(1)(a) AND (b) OF FORM]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a [removed: non-accelerated filer, smaller reporting company, or an emerging growth company.]

[removed: See the definitions of “large accelerated] filer,” [removed: “accelerated filer,”] “smaller reporting company,” and “emerging growth company” in Rule [removed: 12b-2 of the Exchange Act.]

Indicate by check mark whether the registrant is a shell company (as defined by Rule [removed: 12b-2 of the Act).]

[removed: The aggregate market value] of Dominion [removed: Energy, Inc. common stock held by non-affiliates of Dominion] Energy was approximately [removed: $44.4] [added: $62.0] billion based on the closing price of Dominion Energy’s common stock as reported on the New York Stock Exchange as of the last day of Dominion Energy’s most recently completed second fiscal quarter.

At February [removed: 15, 2019,] [added: 14, 2020,] Dominion Energy had [removed: 799,314,079] [added: 838,000,325] shares of common stock outstanding and Virginia Power had 274,723 shares of common stock outstanding.

Dominion [added: Energy Questar Corporation, a wholly-owned subsidiary of Dominion] Energy, [removed: Inc.] [added: Inc.,] holds all of the membership interests of Dominion Energy Gas Holdings, LLC.

[removed: DOCUMENT] [added: DOCUMENT] INCORPORATED BY [removed: REFERENCE.][added: REFERENCE]

Portions of Dominion Energy’s [removed: 2019] [added: 2020] Proxy Statement are incorporated by reference in Part III.

| [removed: Item Number | |] [added: Item Number] | | | [removed: Page Number] | [added: Page Number] |

| | | [Glossary of [removed: Terms](#tx662998_1) | |] [added: Terms](#tx854390_1)] | [removed: 3] | [added: 3] |

| [removed: Part I | |] [added: Part I] | | | | |

| 1A. | | [Risk [removed: Factors](#tx662998_3) | |] [added: Factors](#tx854390_3)] | [removed: 29] | [added: 28] |

10-K

OR

Dominion Energy, Inc. Yes

No

Virginia Electric and Power Company Yes

No

Dominion Energy Gas Holdings, LLC Yes

No

Dominion Energy, Inc. Yes

No

Virginia Electric and Power Company Yes

No

Dominion Energy Gas Holdings, LLC Yes

No

Dominion Energy, Inc. Yes

No

Virginia Electric and Power Company Yes

No

Dominion Energy Gas Holdings, LLC Yes

No

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Dominion Energy, Inc. Yes

No

Virginia Electric and Power Company Yes

No

Dominion Energy Gas Holdings, LLC Yes

No

non-accelerated

filer, smaller reporting company, or an emerging growth company.

See the definitions of “large accelerated filer,” “accelerated filer,”

“non-accelerated

12b-2

of the Exchange Act.

12b-2

of the Act).

Dominion Energy, Inc. Yes

No

Virginia Electric and Power Company Yes

No

10-K 1 d662998d10k.htm 10-K

OR

| | | | | |

| --- | --- | --- | --- | --- |

| | | 2016 Series A 5.25% Enhanced Junior Subordinated Notes | | New York Stock Exchange |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

| | | | | | | |

This combined Form 10-K represents separate filings by Dominion Energy, Inc., Virginia Electric and Power Company and Dominion Energy Gas Holdings, LLC.

Virginia Electric and Power Company and Dominion Energy Gas Holdings, LLC make no representations as to the information relating to Dominion Energy, Inc.’s other operations.

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

| 1. | | [Business](#tx662998_2) | | | 8 | |

| 2. | | [Properties](#tx662998_5) | | | 38 | |

| | | [Executive Officers of Dominion Energy](#tx662998_8) | | | 44 | |

| 2 | | | | |

| 2013 Equity Units | | Dominion Energy’s 2013 Series A Equity Units and 2013 Series B Equity Units issued in June 2013 |

| 2014 Equity Units | | Dominion Energy’s 2014 Series A Equity Units issued in July 2014 |

| AMR | | Automated meter reading program deployed by East Ohio |

| Bankruptcy Court | | U.S. Bankruptcy Court for the Southern District of New York |

| Caiman | | Caiman Energy II, LLC |

| Clean Power Plan | | Regulations issued by the EPA in August 2015 for states to follow in developing plans to reduce CO2 emissions from existing fossil fuel-fired electric generating units, stayed by the U.S. Supreme Court in February 2016 pending resolution of court challenges by certain states |

| Cove Point Holdings | | Cove Point GP Holding Company, LLC |

| | | | | 3 |

| Dominion Iroquois | | Dominion Iroquois, Inc., which, effective May 2016, holds a 24.07% noncontrolling partnership interest in Iroquois |

| ERO | | Electric Reliability Organization |

| 4 | | | | |

| Hastings | | A natural gas processing and fractionation facility located near Pine Grove, West Virginia |

| Liability Management Exercise | | Dominion Energy exercise in 2014 to redeem certain debt and preferred securities |

| Local 50 | | International Brotherhood of Electrical Workers Local 50 |

| Local 69 | | Local 69, Utility Workers Union of America, United Gas Workers |

| Northern System | | Collection of 131 miles of various diameter natural gas pipelines in Ohio |

| | | | | 5 |

| Philadelphia Utility Index | | Philadelphia Stock Exchange Utility Index |

| PIPP | | Percentage of Income Payment Plan deployed by East Ohio |

| Power Delivery | | Power Delivery Group operating segment |

| 6 | | | | |

| SCANA Merger Agreement | | Agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA |

| Shell | | Shell WindEnergy, Inc. |

| Transco | | Transcontinental Gas Pipe Line Company, LLC |

| UEX Rider | | Uncollectible Expense Rider deployed by East Ohio |

| Western System | | Collection of 212 miles of various diameter natural gas pipelines and three compressor stations in Ohio |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 36 | | | | | | | | |

| |

| --- |

| 37 |

As of December 31, [removed: 2018,] [added: 2019,] Dominion Energy owned its principal executive office in Richmond, Virginia and five other corporate offices.

Dominion Energy also leases corporate offices in [added: Richmond, Virginia and] other cities in which its subsidiaries operate.

In addition, Virginia [removed: Power’s] Power [removed: Delivery and Power Generation segments share] [added: leases] certain [removed: leased] buildings and equipment.

There were no bonds outstanding as of December 31, [removed: 2018;] [added: 2019;] however, by leaving the indenture open, Virginia Power expects to retain the flexibility to issue mortgage bonds in the future.

Additionally, [removed: SCE&G’s] [added: DESC’s] bond indenture, which secures its First Mortgage Bonds, constitutes a direct mortgage lien on substantially all of its electric utility property.

Portions of Virginia Power’s electric transmission lines cross national parks and forests under permits [added: entitling the federal government to use, at specified charges, any surplus capacity that may exist in these lines.]

In addition, Virginia Power’s electric distribution network includes approximately [removed: 58,300] [added: 58,400] miles of distribution lines, exclusive of service level lines, in Virginia and North Carolina.

[removed: The grants for most of its electric lines contain rights-of-way] that have been obtained from the apparent owners of real estate, but underlying titles have not been examined.

[removed: Where rights-of-way] have not been obtained, they could be acquired from private owners by condemnation, if necessary.

In addition, Virginia Power owns [removed: 475] [added: 471] substations.

[removed: POWER GENERATION][added: Virginia Power Utility Generation]

The following tables list [removed: Power Generation’s utility, non-jurisdictional and merchant] [added: Virginia Power’s] generating units and [removed: capability,] [added: capability] as of December 31, [removed: 2018.][added: 2019.]

[removed: VIRGINIA POWER UTILITY GENERATION][added: Virginia Power Non-jurisdictional Generation]

| [removed: Gas] [added: Gas] | | | | | | | | | | | | |

| Greensville County (CC) | | | Greensville County, VA | | | | [removed: 1,588] [added: 1,629] | | | | | |

| Possum Point (CC) [added: (1)] | | | Dumfries, VA | | | | 573 | | | | | |

| Chesterfield (CC) | | | Chester, VA | | | | [removed: 397] [added: 392] | | | | | |

| Total Gas | | | | | | | [removed: 9,187] [added: 8,413] | | | | [removed: 41] [added: 40] | % |

| [removed: Coal] [added: Coal] | | | | | | | | | | | | |

| [removed: Chesterfield(1)] [added: Chesterfield] | | | Chester, VA | | | | [removed: 1,275] [added: 1,014] | | | | | |

| Clover | | | Clover, VA | | | | 439 | [removed: (3)] [added: (2)] | | | | |

| Total Coal | | | | | | | [removed: 4,406] [added: 3,684] | | | | [removed: 20] [added: 18] | |

| [removed: Nuclear] [added: Nuclear] | | | | | | | | | | | | |

| North Anna | | | Mineral, VA | | | | 1,672 | [removed: (4)] [added: (3)] | | | | |

| Total Nuclear | | | | | | | 3,348 | | | | [removed: 15] [added: 16] | |

| [removed: Oil] [added: Oil] | | | | | | | | | | | | |

| Chesapeake (CT) | | | Chesapeake, VA | | | | [removed: 51] [added: 39] | | | | | |

| Total Oil | | | | | | | [removed: 2,144] [added: 2,132] | | | | 10 | |

| [removed: Hydro] [added: Hydro] | | | | | | | | | | | | |

| Bath County | | | Warm Springs, VA | | | | 1,808 | [removed: (5)] [added: (4)] | | | | |

| Total Hydro | | | | | | | 2,124 | | | | [removed: 9] [added: 10] | |

| [removed: Biomass] [added: Biomass] | | | | | | | | | | | | |

| Total Biomass | | | | | | | [removed: 236] [added: 153] | | | | 1 | |

| [removed: Solar] [added: Solar] | | | | | | | | | | | | |

| Scott Solar | | | [removed: Powhatan County,] [added: Powhatan,] VA | | | | 17 | | | | | |

| Total Solar | | | | | | | [removed: 56] [added: 198] | | | | [removed: —] [added: 1] | |

| [removed: Various] [added: Various] | | | | | | | | | | | | |

| Power Purchase Agreements | | | | | | | [removed: 930] [added: 782] | | | | 4 | |

| Total Utility Generation | | | | | | | [removed: 22,442] [added: 20,845] | | | | 100 | % |

[removed: _Note:] [added: Note:] (CT) denotes combustion turbine and (CC) denotes combined [removed: cycle._][added: cycle.]

The grants for most of its electric lines contain

rights-of-way

Where

rights-of-way

| 37 |

| Colonial Trail West | | | Surry County, VA | | | | 142 | | | | | |

| | | | | | | | 20,063 | | | | | |

| (1) | Will be retired after meeting capacity obligation to PJM in 2021. See Note 2 to the Consolidated Financial Statements for additional information. |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 38 | | | | | | | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Gutenberg | | | Garysburg, NC | | | | 80 | |

| Gloucester | | | Gloucester County, VA | | | | 20 | |

| Montross | | | Westmoreland County, VA | | | | 20 | |

| Remington | | | Fauquier County, VA | | | | 20 | |

Gas Transmission & Storage

Cove Point’s LNG Facility has an operational peak regasification daily

send-out

In addition to the pipeline network owned by Dominion Energy Gas, Dominion Energy has approximately 2,500 miles of gas transmission, gathering and storage pipelines located in the states of West Virginia, Ohio, Arizona and Pennsylvania.

Gas Distribution’s network is located in the states of Idaho, North Carolina, Ohio, Utah, West Virginia and Wyoming.

This network includes approximately 3,700 miles of transmission pipeline and approximately 85,000 miles of distribution mains and related service facilities.

The

right-of-way

estate, as underlying titles have been examined.

Where

rights-of-way

have not been obtained, they could be acquired from private owners by condemnation, if necessary.

case-by-case

basis, with results that range from reimbursed relocation to revocation of permission to operate.

The grants for most of DESC’s electric lines contain

rights-of-way

Where

rights-of-way

have not been obtained, they could be acquired from private owners by condemnation, if necessary.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | 39 | | |

The following table lists DESC’s generating units and capability as of December 31, 2019.

GENCO’s Williams Station is also subject to a first mortgage lien which secures certain outstanding debt of GENCO.

POWER DELIVERY

entitling the federal government to use, at specified charges, any surplus capacity that may exist in these lines.

Dominion Energy and Virginia Power generate electricity for sale on a wholesale and a retail level.

Dominion Energy and Virginia Power supply electricity demand either from their generation facilities or through purchased power contracts.

As of December 31, 2018, Power Generation’s total utility, non-jurisdictional and merchant generating capacity was approximately 26,000 MW.

| | | | | |

| --- | --- | --- | --- | --- |

| 38 | | | | |

| Possum Point(1) | | | Dumfries, VA | | | | 316 | | | | | |

| Bellemeade (CC)(1) | | | Richmond, VA | | | | 267 | | | | | |

| Bremo(1) | | | Bremo Bluff, VA | | | | 227 | | | | | |

| Yorktown(2) | | | Yorktown, VA | | | | 323 | | | | | |

| Mecklenburg(1) | | | Clarksville, VA | | | | 138 | | | | | |

| Pittsylvania(1) | | | Hurt, VA | | | | 83 | | | | | |

| | | | | | | | 21,512 | | | | | |

| _(1)_ | _Virginia Power has placed certain units at this facility in cold storage._ |

| _(2)_ | _Coal-fired units are expected to be retired at Yorktown power station as early as 2019 as a result of the issuance of MATS._ |

| | | | | 39 |

VIRGINIA POWER NON\-JURISDICTIONAL GENERATION

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| Montross | | Montross, VA | | | 20 | |

| Remington | | Remington, VA | | | 20 | |

| NedPower(6) | | | Grant County, WV | | | | 132 | (8) | | | | |

| Total Wind | | | | | | | 282 | | | | 8 | |

| Fuel Cell | | | | | | | | | | | | |

| Bridgeport Fuel Cell | | | Bridgeport, CT | | | | 15 | | | | | |

| Total Fuel Cell | | | | | | | 15 | | | | — | |

| 40 | | | | |

| _(8)_ | _Excludes 50% membership interest owned by Shell._ |

Dominion Energy and Dominion Energy Gas

East Ohio’s gas distribution network is located in Ohio.

This network involves approximately 18,900 miles of pipe, exclusive of service lines.

Dominion Energy Gas also owns NGL processing plants capable of processing over 270,000 mcf per day of natural gas.

Hastings is the largest plant and is capable of processing over 180,000 mcf per day of natural gas.

Hastings can also fractionate over 580,000 Gals per day of NGLs into marketable products, including propane, isobutane, butane and natural gasoline.

NGL operations have storage capacity of 1,340,000 Gals of propane, 118,000 Gals of isobutane, 242,000 Gals of butane, 2,000,000 Gals of natural gasoline and 1,012,500 Gals of mixed NGLs.

Dominion Energy Gas also operates 20 underground gas storage fields located in New York, Ohio, Pennsylvania and West Virginia, with approximately 2,000 storage wells and approximately 399,000 acres of operated leaseholds.

The Cove Point Pipeline is a 36-inch diameter underground, interstate natural gas pipeline that extends approximately 88 miles

| Name and Age | | Business Experience Past Five [removed: Years(1)] [added: Years (1)] |

| Thomas F. Farrell, II [removed: (64)] [added: (65)] | | Chairman of the Board of Directors, President and CEO [removed: of Dominion Energy] from April 2007 to date. |

| Robert M. Blue [removed: (51)] [added: (52)] | | Executive Vice President and [added: Co-COO from December 2019 to date; Executive Vice] President [added: and President] & CEO—Power Delivery [added: Group] from May 2017 to [removed: date;] [added: November 2019;] Senior Vice President and President & [removed: CEO—Power Delivery] [added: CEO—Dominion Virginia Power] from January 2017 to May 2017; Senior Vice President—Law, Regulation & Policy from February 2016 to December 2016; Senior Vice President—Regulation, Law, Energy Solutions and Policy from May 2015 to January 2016; President of Virginia Power from January 2014 to May 2015. |

| James R. Chapman [removed: (49)] [added: (50)] | | Executive Vice President, [removed: Chief Financial Officer] [added: CFO] and Treasurer from January 2019 to date; Senior Vice President, [removed: Chief Financial Officer] [added: CFO] and Treasurer from November 2018 to December 2018; Senior Vice President—Mergers & Acquisitions and Treasurer from February 2016 to October 2018; Vice President—Corporate Finance and Mergers & Acquisitions and Assistant Treasurer from May 2015 to January 2016; Vice President—Corporate Finance and Mergers & Acquisitions from January 2015 to May [removed: 2015; Assistant Treasurer from October 2013 to December 2014.] [added: 2015.] |

| Diane Leopold [removed: (52)] [added: (53)] | | Executive Vice President and [added: Co-COO from December 2019 to date; Executive Vice] President [added: and President] & CEO—Gas Infrastructure [added: Group] from May 2017 to [removed: date;] [added: November 2019;] Senior Vice President and President & [removed: CEO—Gas Infrastructure] [added: CEO—Dominion Energy] from January 2017 to May 2017; President of DETI, East Ohio and [removed: Dominion Cove Point, Inc.] [added: DCP] from January 2014 to date. |

| P. Rodney Blevins [removed: (54)] [added: (55)] | | [added: President— Dominion Energy South Carolina from December 2019 to date;] President & Chief Executive Officer—Southeast Energy [added: Group] from January 2019 to [removed: date;] [added: November 2019;] Senior Vice President and Chief Information Officer from January 2014 to December 2018. |

| Carlos M. Brown [removed: (44)] [added: (45)] | | Senior Vice [added: President, General Counsel and Chief Compliance Officer from December 2019 to date; Senior Vice] President and General Counsel from January 2019 to [removed: date;] [added: November 2019;] Vice President and General Counsel from January 2017 to December 2018; Deputy General Counsel—Litigation, Labor, and Employment of DES from July 2016 to December 2016; Director—Power Generation Station II of DES from July 2015 to June 2016; Director—Alternative Energy Solutions Business Development & Commercialization of DES from January 2013 to June 2015. |

| William L. Murray [removed: (51)] [added: (52)] | | Senior Vice President—Corporate Affairs & Communications from February 2019 to date; Vice President—State & Electric Public Policy of DES from May 2017 to January 2019; Senior Policy Director—Public Policy of DES from April 2016 to May 2017; Managing Director—Corporate Public Policy of DES from June 2007 to March 2016. |

| Michele L. Cardiff [removed: (51)] [added: (52)] | | Vice President, Controller and CAO from April 2014 to [removed: date; Vice President—Accounting of DES from January 2014 to March 2014.] [added: date.] |

| [removed: _(1)_] [added: (1)] | [removed: _All] [added: All] positions held at Dominion Energy, unless otherwise noted. Any service listed for Virginia Power, DETI, East Ohio, [added: Hope, PSNC, Questar Gas,] Dominion [removed: Cove Point, Inc.,] [added: Energy Midstream, Dominion Energy Questar Pipeline, DCP] and DES reflects service at a subsidiary of Dominion [removed: Energy._] [added: Energy.] |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 42 | | | | | | | | |

Information about our Executive Officers

| Donald R. Raikes (57) | | President—Gas Distribution of Dominion Energy from December 2019 to date and of Hope, East Ohio, PSNC, and Questar Gas from October 2019 to date; Senior Vice President—Gas Transmission Operations of DCP, Dominion Energy Midstream and Dominion Energy Questar Pipeline from February 2019 to September 2019; Senior Vice President—Dominion Midstream Operations of DCP, Dominion Energy Midstream and Dominion Energy Questar Pipeline from August 2017 to January 2019; Senior Vice President—Pipeline Customer Service & Business Development of DCP and DETI from May 2017 to August 2017; Senior Vice President—Customer Service and Business Development of DCP and DETI from November 2014 to May 2017. |

| Paul E. Ruppert (55) | | President—Gas Transmission & Storage from December 2019 to date; President—Gas Transmission of DETI, Dominion Energy Questar Pipeline and DCP from August 2017 to November 2019; President—Dominion Midstream Operations of Dominion Energy Questar Pipeline and DCP from May 2017 to July 2017; Senior Vice President and President—Dominion Midstream Operations of Dominion Energy Midstream from January 2017 to July 2017; Senior Vice President—Dominion Midstream Operations of Dominion Energy Midstream from January 2016 to December 2016; Senior Vice President—Business Development & Generation Construction of Virginia Power from April 2012 to December 2015. |

| Daniel G. Stoddard (57) | | Senior Vice President, Chief Nuclear Officer and President—Contracted Generation from December 2019 to date; Senior Vice President and Chief Nuclear Officer of Virginia Power from October 2016 to date; Senior Vice President—Nuclear Operations of Virginia Power from May 2011 to September 2016. |

| | | |

| | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | 43 | | |

| |

| --- |

| 43 |

Executive Officers of Dominion Energy

| Paul D. Koonce (59) | | Executive Vice President and President & CEO—Power Generation from January 2017 to date; Executive Vice President and CEO—Power Generation from January 2016 to December 2016; Executive Vice President and CEO—Gas Infrastructure from February 2013 to December 2015. |

| | | | | |

| --- | --- | --- | --- | --- |

| 44 | | | | |

[removed: Dominion Energy][added: Dominion Energy]

At February [removed: 15, 2019,] [added: 14, 2020,] there were approximately [removed: 137,000] [added: 134,000] record holders of Dominion Energy’s common stock.

The number of record holders is comprised of individual shareholder accounts maintained on Dominion Energy’s transfer agent records and includes accounts with shares held in (1) certificate form, (2) book-entry in the Direct Registration System and (3) book-entry under Dominion Energy [removed: Direct®.][added: Direct]

Discussions of expected dividend payments required by this Item are contained in [removed: _Liquidity and Capital Resources_ in Item 7.]

The following table presents certain information with respect to Dominion Energy’s common stock repurchases during the fourth quarter of [removed: 2018:][added: 2019:]

| [removed: DOMINION ENERGY PURCHASES OF EQUITY SECURITIES] [added: Dominion Energy Purchases Of Equity Securities] | | | | | | | | | | | | | | | [added: | |]

| Period | | Total Number of Shares (or Units) [removed: Purchased(1)] [added: Purchased (1)] | | | | Average Price Paid per Share (or [removed: Unit)(2)] [added: 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 [removed: Programs(3)] [added: Programs (3)] | [added: | |]

| [removed: 10/1/18-10/31/18] [added: 10/1/19-10/31/19] | | | [removed: 27,800] [added: 31,435] | | | [removed: $] | [removed: 70.10] [added: $81.22] | | | | [removed: —] [added: —] | | | [removed: 19,629,059 shares/$1.18 billion] [added: 19,629,059 shares/$] | [added: 1.18 billion | |]

| [removed: 11/1/18-11/30/18] [added: 11/1/19-11/30/19] | | | [removed: 3,630] [added: 401] | | | | [removed: 70.33] [added: 83.08] | | | | [removed: —] [added: —] | | | [removed: 19,629,059 shares/$1.18 billion] [added: 19,629,059 shares/$] | [added: 1.18 billion | |]

| [removed: 12/1/18-12/31/18] [added: 12/1/19-12/31/19] | | | [removed: 1,494] [added: 2,429] | | | | [removed: 74.58] [added: 83.11] | | | | [removed: —] [added: —] | | | [removed: 19,629,059 shares/$1.18 billion] [added: 19,629,059 shares/$] | [added: 1.18 billion | |]

| Total | | | [removed: 32,924] [added: 34,265] | | | [removed: $] | [removed: 70.33] [added: $81.38] | | | | [removed: —] [added: —] | | | [removed: 19,629,059 shares/$1.18 billion] [added: 19,629,059 shares/$] | [added: 1.18 billion | |]

| [removed: _(1)_] [added: (1)] | [removed: _27,800, 3,630 and 1,494] [added: Represents] shares [added: that] were tendered by employees to satisfy tax withholding obligations on vested restricted [removed: stock in October, November and December 2018, respectively._] [added: stock.] |

| [removed: _(2)_] [added: (2)] | [removed: _Represents] [added: Represents] the weighted-average price paid per [removed: share._] [added: share.] |

| [removed: _(3)_] [added: (3)] | [removed: _The] [added: 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 [removed: billion._] [added: billion.] |

[removed: Virginia Power][added: Virginia Power]

Virginia Power intends to pay quarterly cash dividends in [removed: 2019] [added: 2020] but is neither required to nor restricted, except as described in Note [removed: 20] [added: 21] to the Consolidated Financial Statements, from making such payments.

[removed: Dominion] [added: Dominion] Energy [removed: Gas][added: Gas]

Dominion Energy Gas intends to pay quarterly cash dividends in [removed: 2019] [added: 2020] but is neither required to nor restricted, except as described in Note [removed: 20] [added: 21] to the Consolidated Financial Statements, from making such payments.

Liquidity and Capital Resources

in Item 7.

| | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 44 | | | | | | | | |

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | |

| --- | --- | --- | --- | --- |

| | | | | 45 |

[removed: DOMINION ENERGY][added: Dominion Energy]

| Year Ended December 31, | | [removed: 2018(1)] [added: 2019 (1)] | | | | [removed: 2017(2)] [added: 2018 (2)] | | | | [removed: 2016(3)] [added: 2017 (3)] | | | | [removed: 2015] [added: 2016 (4)] | | | | [removed: 2014(4)] [added: 2015] | | |

| Operating revenue | | [removed: $] [added: $] | [removed: 13,366] [added: 16,572] | | | $ | [removed: 12,586] [added: 13,366] | | | $ | [removed: 11,737] [added: 12,586] | | | $ | [removed: 11,683] [added: 11,737] | | | $ | [removed: 12,436] [added: 11,683] | |

| Net income attributable to Dominion Energy | | | [removed: 2,447] [added: 1,358] | | | | [removed: 2,999] [added: 2,447] | | | | [removed: 2,123] [added: 2,999] | | | | [removed: 1,899] [added: 2,123] | | | | [removed: 1,310] [added: 1,899] | |

| Net income attributable to Dominion Energy per common share-basic | | | [removed: 3.74] [added: 1.66] | | | | [removed: 4.72] [added: 3.74] | | | | [removed: 3.44] [added: 4.72] | | | | [removed: 3.21] [added: 3.44] | | | | [removed: 2.25] [added: 3.21] | |

| Net income attributable to Dominion Energy per common share-diluted | | | [removed: 3.74] [added: 1.62] | | | | [removed: 4.72] [added: 3.74] | | | | [removed: 3.44] [added: 4.72] | | | | [removed: 3.20] [added: 3.44] | | | | [removed: 2.24] [added: 3.20] | |

| Dividends declared per common share | | | [removed: 3.340] [added: 3.67] | | | | [removed: 3.035] [added: 3.34] | | | | [removed: 2.80] [added: 3.035] | | | | [removed: 2.59] [added: 2.80] | | | | [removed: 2.40] [added: 2.59] | |

| Total assets | | | [removed: 77,914] [added: 103,823] | | | | [removed: 76,585] [added: 77,914] | | | | [removed: 71,610] [added: 76,585] | | | | [removed: 58,648] [added: 71,610] | | | | [removed: 54,186] [added: 58,648] | |

| Long-term [removed: debt(5)] [added: debt (5)] | | | [removed: 31,144] [added: 33,824] | | | | [removed: 30,948] [added: 31,144] | | | | [removed: 30,231] [added: 30,948] | | | | [removed: 23,468] [added: 30,231] | | | | [removed: 21,665] [added: 23,468] | |

| [removed: _(1)_] [added: (2)] | [removed: _Includes] [added: Includes] $568 million after-tax gains on sales of certain merchant generation facilities and equity method investments partially offset by $164 million after-tax charge related to the impairment of certain gathering and processing assets and a $160 million after-tax charge associated with Virginia legislation enacted in March 2018 that required one-time rate credits of certain amounts to utility [removed: customers._] [added: customers.] |

| [removed: _(2)_] [added: (3)] | [removed: _Includes] [added: Includes] $851 million of tax benefits resulting from the remeasurement of deferred income taxes to the new corporate income tax rate, partially offset by $96 million of after-tax charges associated with equity method investments in wind-powered generation [removed: facilities._] [added: facilities.] |

| [removed: _(3)_] [added: (4)] | [removed: _Includes] [added: Includes] a $122 million after-tax charge related to future ash pond and landfill closure costs at certain utility generation [removed: facilities._] [added: facilities.] |

| [removed: _(5)_] [added: (5)] | [removed: _Includes capital leases._] [added: Includes finance leases.] |

Dominion Energy’s Consolidated Financial Statements include the results of operations acquired in the SCANA Combination effective January 2019.

| (1) | Includes merger and integration-related costs associated with the SCANA Combination of $1.8 billion after-tax (inclusive of $756 million after-tax charge for refunds of amounts previously collected for the NND Project, $480 million after-tax charge for litigation acquired in the SCANA Combination and $319 million after-tax charge related to a voluntary retirement program), $585 million after-tax charges associated primarily with the planned early retirement of certain electric generation facilities, automated meter reading infrastructure and the termination of a contract with a non-utility generator, partially offset by a $429 million after-tax net gain related to nuclear decommissioning trust funds. |

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| | | | | | | 45 | | |

Beginning in 2019, Dominion Energy’s result of operations will include the results of operations of SCANA.

Additionally, in connection with the SCANA Combination, SCE&G will provide refunds and restitution of $2.0 billion over 20 years with capital support from Dominion Energy as well as exclude from rate recovery $2.4 billion of costs related to the NND Project and $180 million of costs associated with the purchase of the Columbia Energy Center power station.

See Note 3 to the Consolidated Financial Statements for further information including charges expected to be recognized in the first quarter of 2019.

| _(4)_ | _Includes $248 million of after-tax charges associated with Virginia legislation enacted in April 2014 relating to the development of a third nuclear unit located at North Anna and offshore wind facilities, a $193 million after-tax charge related to Dominion Energy’s restructuring of its producer services business and a $174 million after-tax charge associated with the Liability Management Exercise._ |

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| 46 | | | | |

| | | [removed: Page Number] [added: Page Number] | | |

| [removed: Dominion] [added: Dominion] Energy, [removed: Inc.] [added: Inc.] | | | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#tx662998_24)] [added: Firm](#tx854390_24)] | | | [removed: 71] [added: 71] | |

| [Consolidated Statements of Income for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#tx662998_25)] [added: 2017](#tx854390_25)] | | | [removed: 72] [added: 74] | |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#tx662998_26)] [added: 2017](#tx854390_26)] | | | [removed: 73] [added: 75] | |

| [Consolidated Balance Sheets at December 31, [removed: 2018] [added: 2019] and [removed: 2017](#tx662998_27)] [added: 2018](#tx854390_27)] | | | [removed: 74] [added: 76] | |

| [Consolidated Statements of Equity at December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] and for the years then [removed: ended](#tx662998_28)] [added: ended](#tx854390_28)] | | | [removed: 76] [added: 78] | |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#tx662998_29)] [added: 2017](#tx854390_29)] | | | [removed: 77] [added: 79] | |

| [removed: Virginia] [added: Virginia] Electric and Power [removed: Company] [added: Company] | | | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#tx662998_30)] [added: Firm](#tx854390_30)] | | | [removed: 79] [added: 81] | |

| [Consolidated Statements of Income for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#tx662998_31)] [added: 2017](#tx854390_31)] | | | [removed: 80] [added: 82] | |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#tx662998_32)] [added: 2017](#tx854390_32)] | | | [removed: 81] [added: 83] | |

| [Consolidated Balance Sheets at December 31, [removed: 2018] [added: 2019] and [removed: 2017](#tx662998_33)] [added: 2018](#tx854390_33)] | | | [removed: 82] [added: 84] | |

| [Consolidated Statements of Common Shareholder’s Equity at December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] and for the years then [removed: ended](#tx662998_34)] [added: ended](#tx854390_34)] | | | [removed: 84] [added: 86] | |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#tx662998_35)] [added: 2017](#tx854390_35)] | | | [removed: 85] [added: 87] | |

| [removed: Dominion] [added: Dominion] Energy Gas Holdings, [removed: LLC] [added: LLC] | | | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#tx662998_36)] [added: Firm](#tx854390_36)] | | | [removed: 87] [added: 89] | |

| [Consolidated Statements of Income for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#tx662998_37)] [added: 2017](#tx854390_37)] | | | [removed: 88] [added: 90] | |