Dominion Energy (D) 10-K risk factor changes: FY2020 vs FY2019

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 [added: *Forward-Looking Statements* in Item 7.]

The rates of the Companies’ [added: principal] electric transmission, distribution and generation operations and gas [removed: transmission, storage and] distribution operations are subject to regulatory review.

Revenue provided by the Companies’ electric transmission, distribution and generation operations and by gas [removed: transmission and] distribution operations is based primarily on rates approved by state and federal regulatory agencies.

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

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

[added: Additionally, if any state utility commission] does not allow recovery through base rates, on a timely basis, of costs incurred in providing service, the Company’s future earnings could be negatively impacted.

Through the SCANA Combination, Dominion Energy acquired SCANA and DESC which [removed: are] [added: have been and continue to be] subject to numerous legal proceedings and ongoing governmental investigations and examinations.

[removed: SCANA and DESC are defendants in numerous] [added: While a significant portion of the] federal and state legal proceedings and governmental investigations [added: have been settled, SCANA and DESC remain defendants in multiple lawsuits and investigations] relating to the decision to abandon construction at the NND Project.

[removed: Dominion Energy and Virginia Power’s] [added: The Companies’] 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 markets.

[removed: Dominion Energy and Virginia Power’s] [added: The Companies’] generation stations operating in RTO markets sell capacity, energy and ancillary services into wholesale electricity markets regulated by FERC.

FERC also periodically reviews [removed: Dominion Energy’s] [added: the Companies’] authority to sell at market-based rates.

Material changes by FERC to the design of the wholesale markets or its interpretation of market rules, [removed: Dominion Energy or Virginia Power’s] [added: the Companies’] authority to sell power at market-based rates, or changes to pricing rules or rules involving revenue calculations, could adversely impact the future results of [removed: Dominion Energy or Virginia Power’s] [added: the Companies’] generation business.

The expanded Minimum Offer Price Rule will set a floor price on new and existing [added: renewable and non-renewable] state subsidized resources that do not seek a FERC exemption, increasing their risk of failing to clear the capacity auction and [added: not obtaining a capacity payment and obligation.]

In addition, [removed: there have been] changes to the interpretation and application of FERC’s market manipulation [removed: rules.][added: rules may occur from time to time.]

A failure to comply with these [added: market manipulation] rules could lead to civil and criminal penalties.

The Companies are subject to complex governmental regulation, including tax regulation, that could adversely affect [added: their results of operations and subject the Companies to monetary penalties.]

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

Recent legislative and regulatory changes that are impacting the Companies include the [added: VCEA, the] 2017 Tax Reform Act and tariffs imposed on imported solar panels by the U.S. government in 2018.

In addition, further regulation of air quality and GHG emissions under the CAA [removed: have been] [added: may be] imposed on the natural gas [removed: sector, including rules to limit methane leakage.][added: sector.]

The Companies are also subject to federal water and waste regulations, including regulations concerning cooling water intake structures, coal combustion [added: by-product 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 [added: clean-up costs and quantifying liabilities under environmental laws that impose joint and several liabilities on all responsible parties.]

Given these [removed: developments] and [removed: uncertainties,] [added: other uncertainties associated with the implementation of] Dominion [removed: Energy and Virginia Power] [added: Energy’s net zero commitment, the Companies] cannot estimate the aggregate effect of [removed: such requirements] [added: future actions taken in furtherance of this commitment] on their results of [removed: operations,] [added: operations or] financial condition or [added: on] their customers.

However, such [removed: expenditures, if material,] [added: actions] could [removed: make Dominion Energy and Virginia Power’s] [added: render additional existing] generation facilities uneconomical to operate, result in the impairment of assets, or otherwise adversely affect [removed: Dominion Energy or Virginia Power’s] [added: the Companies’] results of operations, financial performance or liquidity.

There are also potential impacts on Dominion [removed: Energy and Dominion Energy Gas’] [added: Energy’s] natural gas [removed: businesses] [added: business from its net zero emissions commitment] as [added: well as] federal or state GHG regulations [added: which] may require [added: further] GHG emission reductions from the natural gas sector which, in addition to [removed: resulting in increased costs, could affect demand for natural gas.]

Additionally, GHG requirements could result in increased demand for energy conservation and renewable products, which could impact the natural gas [removed: businesses.][added: business.]

[removed: Dominion Energy and Virginia Power] [added: The Companies] are subject to risks associated with the disposal and storage of coal ash.

[removed: Dominion Energy and Virginia Power] [added: The Companies] historically produced and continue to produce coal ash, or CCRs, as a [added: by-product of their coal-fired generation operations.]

These CCR regulations require [removed: Dominion Energy and Virginia Power] [added: the Companies] to make additional capital expenditures and increase operating and maintenance expenses.

In addition, [removed: Dominion Energy and Virginia Power] [added: the Companies] will incur expenses and other costs associated with closing, corrective action and ongoing monitoring of certain ash ponds.

[removed: Dominion Energy and Virginia Power] [added: The Companies] also may face litigation concerning their coal ash facilities.

Further, while [removed: Dominion Energy and Virginia Power] [added: the Companies] operate their ash ponds and landfills in compliance with applicable state safety regulations, a release of coal ash with a significant environmental [removed: impact, such as the Dan River ash basin release by a neighboring utility,] [added: impact] could result in remediation costs, civil and/or criminal penalties, claims, litigation, increased regulation and compliance costs, and reputational damage, and could impact the financial condition of [removed: Dominion Energy and/or Virginia Power.][added: the Companies.]

[added: The] Companies may not complete [added: the] facility construction, pipeline, conversion or other infrastructure projects that they commence, or they may complete projects on materially different terms, costs or timing than initially estimated or anticipated, and they may not be able to achieve the intended benefits of any such [added: project, if completed.]

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

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

Several of the Companies’ key projects are increasingly large-scale, complex and being constructed in constrained geographic areas or in [removed: difficult terrain,] [added: unfamiliar environments such as the marine environment] for [removed: example,] the [removed: Atlantic Coast Pipeline Project.][added: Coastal Virginia Offshore Wind projects.]

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 [added: gas-related and energy infrastructure projects.]

The construction of such projects is expected to take several years, is typically confined within a limited geographic area or difficult [removed: terrain] [added: environments] and could be subject to delays, cost overruns, labor disputes and other factors that could cause the total cost of the project to exceed the anticipated amount and adversely affect the Companies’ financial performance and/or impair the Companies’ ability to execute the business plan for the project as scheduled.

For example, milder than normal weather can reduce demand for electricity and gas [removed: transmission and] distribution services.

In addition, severe [removed: weather,] [added: weather or acts of nature,] including hurricanes, winter storms, earthquakes, floods and other natural disasters can stress systems, disrupt operation of the Companies’ facilities and cause service outages, production delays and property damage that require incurring additional expenses.

Due to the location of [removed: Dominion Energy and Virginia Power’s] [added: the Companies’] electric utility service territories and a number of its other facilities in the eastern portions of the states of South Carolina, North Carolina and Virginia which are frequently in the path of hurricanes, we experience the consequences of these weather events to a greater degree than many of our industry peers.

The GTSA reinstated triennial reviews commencing with the 2021 Triennial Review.

Additionally, Virginia Power’s ability to utilize CCROs for certain qualifying projects as provided for in the GTSA may be limited if the Virginia Commission does not approve such projects.

Virginia Power makes assessments throughout the review period and will record a regulatory liability for refunds and/or CCRO benefits to customers in any period it is determined probable, which could be material to the Companies’ results of operations in the period recognized and to cash flows on completion of any triennial review.

Compliance with federal and/or state requirements imposing limitations on GHG emissions or efficiency improvements, as well as Dominion Energy’s commitment to achieve net zero emissions by 2050, may result in significant compliance costs, could result in certain of the Companies’ existing electric generation units being uneconomical to maintain or operate and may depend upon technological advancements which may be beyond the Companies’ control.

Virginia has adopted the VCEA which establishes renewable energy and CO2 reduction targets for Virginia Power’s generation fleet and grid operations, including the requirement that 100% of Virginia Power’s electricity come from zero-carbon generation by the end of 2045.

The legislation mandates the development of 16,100 MW of solar or onshore wind capacity by the end of 2035, 5,200 MW of offshore wind capacity before 2035, and 2,700 MW of energy storage by the end of 2035.

The VCEA also directs Virginia Power to participate in a program consistent with RGGI, requiring the purchase of carbon credits to offset emissions from Virginia Power’s generating fleet within the state.

Cost recovery for these initiatives will require approval by the Virginia Commission which may be denied or materially altered to the detriment of the Companies.

In addition, permitting and other project execution challenges may hinder Virginia Power’s ability to meet the requirements of the VCEA.

The Companies could face similar risks if there is further legislation at the federal and/or state level mandating additional limitations on GHG emissions or requiring additional efficiency improvements.

In February 2020, Dominion Energy announced its commitment to achieve net zero emissions by 2050.

To meet this commitment, the Companies expect to construct new electric generation facilities, including renewable facilities such as wind and solar, and to seek the extension of operating licenses for the Companies’ nuclear generation facilities.

The Companies also need to depend on technological improvements not currently in commercial development.

Additionally, actions taken in furtherance of Dominion Energy’s net zero commitment may impact existing generation facilities, including as a result of fuel switching and/or the retirement of high-emitting generation facilities and their potential replacement with lower-emitting generation facilities.

Further, the ability to realize this commitment will require the Companies to be able to obtain significant financing.

These efforts will require approvals from various regulatory bodies for the siting and construction of such new facilities and a determination by the applicable state commissions that costs related to the construction are prudent.

resulting in increased costs, could affect demand for natural gas.

Dominion Energy’s renewable natural gas projects, expected to be a key component of Dominion Energy’s environmental strategy, require approvals from various regulatory bodies for the siting and construction of such facilities.

A number of large and small scale projects have been announced, including pipelines, electric transmission lines, facility expansions or renewed licensing, conversions and other infrastructure developments or construction.

Additional projects may be considered in the future.

For example, Dominion Energy has been involved with projects which have experienced certain

To achieve Dominion Energy’s commitment to net zero emissions by 2050 and comply with the requirements of the VCEA, the Companies are currently simultaneously developing or constructing several electric generation projects, including Subsequent License Renewal projects at Surry and North Anna, the Coastal Virginia Offshore Wind projects and various solar projects.

For example, certain stakeholder groups oppose solar farms due to the increasing quantities of land tracts required for these facilities.

Operation of the Companies’ facilities involves risk, including the risk of potential breakdown or failure of equipment or processes due to aging infrastructure, fuel supply, pipeline integrity or transportation disruptions, accidents, labor disputes or work stoppages by employees, acts of terrorism or sabotage, construction delays or cost

While the Atlantic Coast Pipeline project was cancelled in July 2020 and several of the legal proceedings and governmental investigations relating to the abandonment of the NND Project have been resolved, there is a risk that lingering negative publicity may continue.

The success of Dominion Energy’s contracted generation business depends upon favorable market

For example, Dominion Energy has a noncontrolling 50% interest in Cove Point following the sale of a 25% controlling interest to BHE in November 2020.

This controlling interest allows BHE to make decisions affecting Cove Point’s ability to retain its long-term contracts.

The inability to maintain or renew such contracts on favorable terms may have a material impact to Dominion Energy’s results of operations, financial position or cash flows.

Accordingly, there is no assurance that BHE may pursue remedies in the event of default in the same manner as Dominion Energy would if it had unilateral control over such decisions.

software or networks as attractive targets for cyber attack.

If the Companies’ decommissioning trust funds are insufficient, and they are

Public health crises and epidemics or pandemics, such as COVID-19, could adversely affect the Companies’ business, results of operations, financial condition, liquidity and/or cash flows.

The effects of the continued outbreak of the COVID-19 pandemic and related government responses could include extended disruptions to supply chains and capital markets, reduced labor availability and productivity and a prolonged reduction in economic activity.

The effects could also have a variety of adverse impacts on the Companies, including reduced demand for energy, particularly from commercial and industrial customers, impairment of goodwill or long-lived assets and diminished ability of the Companies to access funds from financial institutions and capital markets.

There remains uncertainty regarding the extent and duration of measures to try to contain the virus, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns.

Such restrictions may cause operational interruptions and delays in construction projects, which, in the case of renewable energy projects, could delay the expected in-service dates of these projects and financial statement impact of the investment tax credits associated with these projects.

For the duration of the outbreak of COVID-19, voluntary suspension, or potential legislative or government action, such as legislation enacted in Virginia in November 2020, may limit the Companies’ ability to collect on overdue accounts or disconnect services for non-payment, which may cause a decrease in the Companies’ results of operations and cash flows.

Forward-Looking Statements

in Item 7.

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.

Additionally, if any state utility commission

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| 28 | | | | | | | | |

not obtaining a capacity payment and obligation.

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.

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 regulatory liabilities and are expected 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 includes provisions that stipulate how these excess deferred taxes may be passed back to customers for certain accelerated tax depreciation benefits.

Potential reductions in future rates attributable to other,

non-plant

related excess deferred taxes may be determined by our regulators.

The amount and timing of these reductions could be material to the Companies’ results of operations, cash flows and/or financial condition.

Additionally, the 2017 Tax Reform Act contains provisions 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 are defined as that allocable to a trade or business and not investment interest and income.

Dominion Energy is a consolidated group with both regulated and nonregulated lines of businesses.

In November 2018, the U.S. Department of Treasury issued proposed regulations defining interest as any amounts associated with the time value of money or use of funds.

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

| |

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| 29 |

to partnerships and partners in those partnerships.

It is unclear when that guidance may be finalized, or whether that guidance could result in a disallowance of a portion of our interest deductions in the future.

by-product

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.

clean-up

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

Any additional federal and/or state requirements imposed on energy companies mandating limitations on GHG emissions or requiring efficiency improvements may result in compliance costs that alone or in combination could make some of the Companies’ electric generation units or natural gas facilities uneconomical to maintain or operate.

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

MD&A discusses Dominion Energy’s results of operations and general financial condition and Virginia [removed: Power and Dominion Energy Gas’] [added: Power’s] results of operations.

Virginia Power [removed: and Dominion Energy Gas meet] [added: meets] the conditions to file under the reduced disclosure format, and therefore [removed: have] [added: has] omitted certain sections of MD&A.

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

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

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

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

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

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

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

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

| • | 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 [removed: Energy and Dominion Energy Gas’] [added: Energy’s] pipeline [removed: systems,] [added: system,] failure to maintain or replace customer contracts on favorable terms, changes in customer growth or usage patterns, including as a result of energy conservation programs, the availability of energy efficient devices and the use of distributed generation methods; |

| • | Fluctuations in the value of investments held in nuclear decommissioning trusts by [removed: Dominion Energy and Virginia Power] [added: the Companies] and in benefit plan trusts by Dominion [removed: Energy and Dominion Energy Gas;] [added: Energy;] |

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

[added: For regulated businesses subject to federal or state cost-of-service] rate regulation, regulatory practices that assign costs to accounting periods may differ from accounting methods generally applied by nonregulated companies.

[added: In the] absence of quoted market prices, Dominion Energy estimates the fair value of its AROs using present value techniques, in which it makes various assumptions including estimates of the amounts and timing of future cash flows associated with retirement activities, credit-adjusted risk free rates and cost escalation rates.

[removed: When Dominion Energy] revises any assumptions used to calculate the fair value of existing AROs, it adjusts the carrying amount of both the ARO liability and the related long-lived asset for assets that are in service; for assets that have ceased [added: or are expected to cease] operations, Dominion Energy adjusts the carrying amount of the ARO liability with such changes [added: either] recognized in [removed: income.][added: income or as a regulatory asset.]

Dominion Energy’s AROs include a significant balance related to the future decommissioning of its [removed: merchant] [added: nonregulated] and utility nuclear facilities.

These nuclear decommissioning AROs are reported in Dominion Energy Virginia, Dominion Energy South Carolina and Contracted [removed: Generation.][added: Assets.]

At December 31, [removed: 2019,] [added: 2020,] Dominion Energy’s nuclear decommissioning AROs totaled [removed: $1.7] [added: $1.9] billion.

Judgment and the use of estimates are required in developing the provision for income taxes and reporting of [added: tax-related assets and liabilities.]

The interpretation of tax [removed: laws, including the provisions of the 2017 Tax Reform Act,] [added: laws and associated regulations] involves [removed: uncertainty,] [added: uncertainty] since tax authorities may interpret the laws differently.

Ultimate resolution or clarification of income tax matters may result in favorable or unfavorable impacts to net income and cash flows, and adjustments to [added: tax-related assets and liabilities could be material.]

Positions taken by an entity in its income tax returns that are recognized in the financial statements must satisfy a [removed: more-likely-][added: more-likely-than-not recognition threshold, assuming that the position will be examined by tax authorities with full knowledge of all relevant information.]

At December 31, [removed: 2019,] [added: 2020] Dominion Energy had [removed: $175] [added: $167] million of unrecognized tax benefits.

[added: Dominion Energy establishes a valuation allowance when it is more-likely-than-not] that all or a portion of a deferred tax asset will not be realized.

At December 31, [removed: 2019,] [added: 2020,] Dominion Energy had established [removed: $161] [added: $155] million of valuation allowances.

Dominion Energy uses derivative contracts such as physical and financial forwards, futures, swaps, options and FTRs to manage [removed: commodity, interest rate] [added: commodity] and [removed: foreign currency exchange] [added: interest] rate risks of its business operations.

In April of each year, Dominion Energy tests its goodwill for potential impairment, and performs additional tests more frequently if an event occurs or circumstances change in the interim that would [added: more-likely-than-not reduce the fair value of a reporting unit below its carrying amount.]

In addition, in the [removed: fourth] [added: third] quarter of [removed: 2019,] [added: 2020,] Dominion Energy performed impairment tests immediately before and after the realignment of its operating segments.

The [removed: 2019, 2018 and 2017] [added: 2020] annual [removed: tests] [added: test] and any interim tests did not result in the recognition of any goodwill impairment.

[added: These underlying assumptions and estimates] are made as of a point in time; subsequent modifications, particularly changes in discount rates or growth rates inherent in Dominion Energy’s estimates of future cash flows, could result in a future impairment of goodwill.

See Notes [removed: 6 and] 9 [added: and 23] to the Consolidated Financial Statements for [removed: a discussion of impairments related to certain long-lived assets and equity method investments.][added: additional information.]

[removed: The impact of changes in these factors, as well as differences between Dominion Energy’s] assumptions and actual experience, is generally recognized in the Consolidated Statements of Income over the remaining average service period of plan participants, rather than immediately.

[removed: non-investment][added: | Non-Investment grade(2) | | | 1 | | | | | | | | 1 | |]

[added: Dominion Energy develops non-investment] related assumptions, which are then compared to the forecasts of an independent investment advisor to ensure reasonableness.

Dominion Energy calculated its pension cost using an expected long-term rate of return on plan assets assumption that ranged from 7.00% to [added: 8.60% for 2020, 7.00% to] 8.65% for 2019 and 8.75% for [removed: 2018 and 2017.][added: 2018.]

For [removed: 2020,] [added: 2021,] the expected long-term rate of return for the pension cost assumption ranged from 7.00% to [removed: 8.60%] [added: 8.45%] for Dominion Energy’s plans held as of December 31, [removed: 2019.][added: 2020.]

Dominion Energy calculated its other postretirement benefit cost using an expected long-term rate of return on plan assets assumption of 8.50% for [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017.][added: 2018.]

For [removed: 2020,] [added: 2021,] the expected long-term rate of return for other postretirement benefit cost assumption is [removed: 8.50%.][added: 8.45%.]

The discount rates used to calculate pension cost and other postretirement benefit cost ranged from [removed: 3.57%] [added: 2.77%] to [removed: 4.43%] [added: 3.63%] for pension plans and [removed: 4.05%] [added: 3.07%] to [removed: 4.41%] [added: 3.52%] for other postretirement benefit plans in [removed: 2019,] [added: 2020,] ranged from [removed: 3.80%] [added: 3.57%] to [removed: 3.81%] [added: 4.43%] for pension plans and [removed: 3.76%] [added: 4.05% to 4.41%] for other postretirement benefit plans in [removed: 2018] [added: 2019] and ranged from [removed: 3.31%] [added: 3.80%] to [removed: 4.50%] [added: 3.81%] for pension plans and [removed: 3.92% to 4.47%] [added: 3.76%] for other postretirement benefit plans in [removed: 2017.][added: 2018.]

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

| • | The expected timing and likelihood of completion of the Q-Pipe Transaction, including the ability to obtain the requisite regulatory approvals and the terms and conditions of such regulatory approvals; |

In connection with the evaluation of Virginia Power’s earnings for the 2021 Triennial Review, in 2020 Virginia Power established a regulatory liability for benefits expected to be provided to Virginia retail electric customers through the use of a CCRO in accordance with the GTSA.

USE OF ESTIMATES IN GOODWILL IMPAIRMENT TESTING

As of December 31, 2020, Dominion Energy’s Consolidated Balance Sheets include $7.4 billion presented within goodwill.

In connection with Dominion Energy entering agreements for the sale of substantially all of its gas transmission and storage business to BHE, associated goodwill of $1.6 billion was reclassified to assets held for sale in the Consolidated Balance Sheets.

During 2020, $1.4 billion of this amount was written off at the completion of the GT&S Transaction.

In 2020, Dominion Energy determined that it had an impairment of its contracted nonregulated solar assets in partnerships outside of its core electric service territories.

See Notes 6 and 10 to the Consolidated Financial Statements for a discussion of the impairment related to Dominion Energy’s non-wholly-owned nonregulated solar facilities.

The impact of changes in these factors, as well as differences between Dominion Energy’s

Net income attributable to Dominion Energy decreased $1.8 billion, primarily due to charges presented in discontinued operations associated with the cancellation of the Atlantic Coast Pipeline Project and related portions of the Supply Header Project, a decrease in net investment earnings on nuclear decommissioning trust funds, an increase in charges associated with the planned early retirements of certain electric generation facilities in Virginia, an impairment charge associated with interests in certain nonregulated solar generation facilities, a contract termination charge in connection with the sale of Fowler Ridge, a charge for benefits expected to be provided to retail electric customers in Virginia through the use of a CCRO in accordance with the GTSA and a charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to legislation enacted in November 2020.

These decreases in net income were partially offset by the absence of charges for refunds of amounts previously collected from retail electric customers of DESC for the NND Project and for certain regulatory assets and property, plant and equipment acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery, the planned early retirement of certain Virginia Power automated meter reading infrastructure and a voluntary retirement program and a decrease in charges associated with litigation acquired in the SCANA Combination.

| Operating revenue | | $ | 14,172 | | | $ | (229 | ) | | $ | 14,401 | | | $ | 3,202 | | | $ | 11,199 | |

| Purchased gas | | | 889 | | | | (671 | ) | | | 1,560 | | | | 956 | | | | 604 | |

| Other taxes | | | 871 | | | | (12 | ) | | | 883 | | | | 303 | | | | 580 | |

| Net income (loss) from discontinued operations including noncontrolling interests | | | (1,878 | ) | | | (2,594 | ) | | | 716 | | | | 264 | | | | 452 | |

| • | A $700 million decrease in the fuel cost component included in utility rates as a result of a net decrease in commodity costs associated with sales to electric utility retail customers ($651 million) and gas utility customers ($49 million); |

| • | A $625 million decrease as a result of the contribution of SEMI to Wrangler in December 2019; |

| • | A $73 million decrease due to unfavorable pricing ($36 million) and lower volumes ($37 million) at Millstone, including the effects of the Millstone 2019 power purchase agreements; |

| • | A $71 million decrease in sales to DESC electric retail customers from the capital cost rider; |

| • | A $58 million decrease in sales to electric utility retail customers associated with usage factors impacted by COVID-19; |

| • | A $45 million decrease due to the absence of various contracts at Virginia Power; and |

| • | A $34 million decrease in sales to electric retail customers associated with economic and other usage factors. |

These decreases were partially offset by:

| • | A $387 million increase from Virginia Power riders; |

| • | A $64 million increase in off-system PJM sales; and |

Electric fuel and other energy-related purchases decreased 22%, primarily due to decreased fuel costs associated with electric utility retail customers ($681 million), which are offset in operating revenue and do not impact net income, partially offset by PJM off-system sales ($64 million) and the absence of various contracts at Virginia Power ($34 million).

Purchased electric capacity decreased 40%, primarily due to a decrease in expense related to the annual PJM capacity performance market effective June 2019 ($51 million) and a Virginia Power contract termination with a non-utility generator ($13 million) partially offset by an increase in expense associated with sales to DESC electric utility retail customers ($30 million), which is offset in operating revenue and does not impact net income, and an increase in expense related to the annual PJM capacity performance market effective June 2020 ($15 million).

Purchased gas decreased 43%, primarily due to the contribution of SEMI to Wrangler in December 2019 ($579 million) and a decrease in net commodity costs for gas utilities ($49 million), which are offset in operating revenue and do not impact net income.

| • | A $32 million decrease due to the contribution of SEMI to Wrangler. |

These decreases were partially offset by:

| • | A $144 million increase in certain Virginia Power expenditures, which are primarily recovered through state and FERC rates and do not impact net income; |

| • | A $56 million increase in outside services; and |

| • | A $41 million increase related to the effects of COVID-19, primarily associated with enhanced safety measures. |

Depreciation, depletion and amortization increased 2%, primarily due to various projects being placed into service ($102 million) partially offset by the absence of depreciation from certain electric generation facilities that were, or have been, committed to be retired early ($58 million) and a decrease reflecting the expected approval of the nuclear plant life extensions from the NRC ($31 million).

| • | A $665 million charge associated with certain nonregulated solar generation facilities; |

| • | An increase in charges associated with the planned early retirements of certain electric generation facilities in Virginia ($402 million); |

| • | A $221 million contract termination charge in connection with the sale of Fowler Ridge; |

| • | A charge for benefits expected to be provided to retail electric customers in Virginia through the use of a CCRO in accordance with the GTSA ($130 million); |

| • | A charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to legislation enacted in November 2020 ($127 million); and |

| --- | --- |

| --- | --- |

| --- | --- |

| | • | Results of Operations |

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

| | | | | | | | | |

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

| 46 | | | | | | | | |

For regulated businesses subject to federal or state

cost-of-service

In the

| |

| --- |

| 47 |

Management’s Discussion and Analysis of Financial Condition and Results of Operations, Continued

tax-related

assets and liabilities.

In addition, the states in which the Companies operate may or may not conform to some or all the provisions in the 2017 Tax Reform Act.

tax-related

assets and liabilities could be material.

than-not

recognition threshold, assuming that the position will be examined by tax authorities with full knowledge of all relevant information.

Dominion Energy establishes a valuation allowance when it is

more-likely-than-not

The 2017 Tax Reform Act included a broad range of tax reform provisions affecting the Companies, including changes in corporate tax rates and business deductions.

Many of these provisions differ significantly from prior U.S. tax law, resulting in pervasive financial reporting implications for the Companies.

The 2017 Tax Reform Act included significant changes to the Internal Revenue Code of 1986, including amendments which significantly change the taxation of individuals and business entities and included specific provisions related to regulated public utilities.

The more significant changes that impact the Companies included in the 2017 Tax Reform Act are (i) reducing the corporate federal income tax rate from 35% to 21%; (ii) effective in 2018, limiting the deductibility of interest expense to 30% of adjusted taxable income for certain businesses with any disallowed interest allowed to be carried forward indefinitely; (iii) permitting 100% expensing (100% bonus depreciation) for certain qualified property; (iv) eliminating the deduction for qualified domestic production activities; and (v) limiting the utilization of net operating losses arising after December 31, 2017 to 80% of taxable income with an indefinite carryforward.

The specific provisions related to regulated public utilities in the 2017 Tax Reform Act generally allow for the continued deductibility of interest expense, the exclusion from full expensing for tax purposes of certain property acquired and placed in service after September 27, 2017 and continued certain rate normalization requirements for accelerated depreciation benefits.

At the date of enactment, the Companies’ deferred taxes were remeasured based upon the new tax rate expected to apply when temporary differences are realized or settled.

For regulated operations, many of the changes in deferred taxes represented amounts probable of collection from or refund to customers, and were recorded as either an increase to a regulatory asset or liability.

The 2017 Tax Reform Act included provisions that stipulate how these excess deferred taxes may be passed back to customers for certain accelerated tax depreciation benefits.

Potential refunds of other deferred taxes will be determined by the Companies’ regulators.

For nonregulated operations, the changes in deferred taxes were recorded as an adjustment to deferred tax expense.

| | | | | | | | | |

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

| 48 | | | | | | | | |

Use of Estimates in Goodwill Impairment Testing

As of December 31, 2019, Dominion Energy reported $8.9 billion of goodwill in its Consolidated Balance Sheet.

more-likely-than-not

Commodity price risk is present in [removed: Dominion Energy and Virginia Power’s] [added: the Companies’] electric operations and Dominion [removed: Energy and Dominion Energy Gas’] [added: Energy’s] natural gas procurement and marketing operations due to the exposure to market shifts in prices received and paid for electricity, natural gas and other commodities.

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

A hypothetical 10% decrease in commodity prices would have resulted in [added: an increase of $2 million and] a decrease [removed: in fair value] of $50 million [removed: and $6 million] [added: in the fair value] of Dominion Energy’s commodity-based derivative instruments as of December 31, [removed: 2019] [added: 2020] and December 31, [removed: 2018,] [added: 2019,] respectively.

A hypothetical 10% decrease in commodity prices [removed: of Virginia Power’s commodity-based derivative instruments] would have resulted in a decrease [removed: in fair value] of [removed: $54] [added: $35] million and [removed: $51] [added: $54] million [added: in the fair value of Virginia Power’s commodity-based derivative instruments] as of December 31, [removed: 2019] [added: 2020] and December 31, [removed: 2018,] [added: 2019,] respectively.

For variable rate debt outstanding for Dominion [removed: Energy,] [added: Energy and Virginia Power,] a hypothetical 10% increase in market interest rates would not have resulted in a material change in earnings at December 31, [removed: 2019 and would have resulted in a $24 million decrease in earnings at December 31, 2018.][added: 2020 or 2019.]

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

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

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

As of December 31, [removed: 2018,] [added: 2020,] Dominion [removed: Energy,] [added: Energy and] Virginia Power [removed: and Dominion Energy Gas] had [removed: $6.6 billion, $1.9] [added: $6.9] billion and [removed: $1.4] [added: $2.1] 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: $142 million, $94] [added: $124] million and [removed: $17] [added: $75] million, respectively, in the fair value of Dominion [removed: Energy,] [added: Energy and] Virginia Power [removed: and Dominion Energy Gas’] interest rate derivatives at December 31, [removed: 2018.][added: 2020.]

[added: Prior to completing the GT&S Transaction,] Dominion Energy [removed: Gas holds] [added: held] foreign currency swaps [removed: with] [added: for] the purpose of hedging the foreign currency exchange risk associated with Euro denominated debt.

[removed: 250] [added: As of December 31, 2019, Dominion Energy had €250] million in aggregate notional amounts of these foreign currency swaps outstanding.

[removed: Dominion Energy and Virginia Power] [added: The Companies] are subject to investment price risk due to securities held as investments in nuclear decommissioning and rabbi trust funds that are managed by third-party [added: investment managers.]

Dominion Energy recognized net investment gains (including investment income) on nuclear decommissioning and rabbi trust investments of [removed: $1] [added: $0.7] billion [added: and $1.0 billion] for the [removed: year] [added: years] ended December 31, [removed: 2019.][added: 2020 and 2019, respectively.]

[removed: Dominion Energy] [added: Virginia Power] recognized net investment [removed: losses] [added: gains] (including investment income) on nuclear decommissioning trust investments of [removed: $135] [added: $287] million [added: and $481 million] for the [removed: year] [added: years] ended December 31, [removed: 2018.][added: 2020 and 2019, respectively.]

Dominion Energy recorded, in AOCI and regulatory liabilities, a net increase in unrealized gains on debt investments of [removed: $74] [added: $57] million [removed: for the year ended December 31, 2019] and [removed: recorded a net decrease in unrealized gains on debt investments of $36] [added: $74] million for the [removed: year] [added: years] ended December 31, [removed: 2018.][added: 2020 and 2019, respectively.]

Virginia Power recorded, in AOCI and regulatory liabilities, a net increase in unrealized gains on debt investments of [removed: $30] [added: $29] million [removed: for the year ended December 31, 2019] and [removed: recorded a net decrease in unrealized gains on debt investments of $21] [added: $30] million for the [removed: year] [added: years] ended December 31, [removed: 2018.][added: 2020 and 2019, respectively.]

Virginia Power [removed: and Dominion Energy Gas] employees participate in these plans.

Dominion Energy’s pension and other postretirement plan assets experienced aggregate actual returns (losses) of [removed: $2.1] [added: $1.9] billion and [removed: $(605) million] [added: $2.1 billion] in [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively, versus expected returns of [removed: $848] [added: $933] million and [removed: $806] [added: $848] million, respectively.

[added: 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 [removed: $23] [added: $25] million and [removed: $19] [added: $23] million as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] respectively, for pension benefits and $5 million [removed: and $4 million] as of [added: both] December 31, [removed: 2019] [added: 2020] and [removed: 2018, respectively,] [added: 2019] for other postretirement benefits.

In addition, Dominion Energy has established an independent function at the corporate level to monitor compliance with the credit and commodity risk management policies of all subsidiaries, including Virginia [removed: Power and Dominion Energy Gas.][added: Power.]

Based on these credit policies and the Companies’ December 31, [removed: 2019] [added: 2020] 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.

They also enter into interest rate sensitive derivatives, including interest rate swaps and interest rate lock agreements.

| | | | | | | | | |

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

| 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 Virginia Power, a hypothetical 10% increase in market interest rates would not have resulted in a material change in earnings at December 31, 2019 or December 31, 2018.

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

A hypothetical 10% decrease in market interest rates would not have resulted in a material decrease in fair value of Dominion Energy Gas’ foreign currency swaps at December 31, 2019 and would have resulted in a decrease of $8 million in the fair value of Dominion Energy Gas’ foreign currency swaps at December 31, 2018.

| |

| --- |

| 67 |

Management’s Discussion and Analysis of Financial Condition and Results of Operations, Continued

investment managers.

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

Virginia Power recognized net investment losses (including investment income) on nuclear decommissioning trust investments of $44 million for the year ended December 31, 2018.

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

Differences between actual and

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 $2 million and $4 million as of December 31, 2019 and 2018, respectively, for pension benefits and $1 million as of December 31, 2018 for other postretirement benefits.

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 | | | | | | | | |

[removed: ,] [added: Dominion Energy,] headquartered in Richmond, Virginia and incorporated in Virginia in 1983, is one of the nation’s largest producers and [removed: transporters] [added: distributors] 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: 2019,] [added: 2020,] Dominion Energy’s portfolio of assets includes approximately [removed: 30,700 MW] [added: 30.2 GW] of electric generating capacity, [removed: 10,400] [added: 10,500] miles of electric transmission lines, [removed: 85,000] [added: 85,600] miles of electric distribution [removed: lines, 14,600] [added: lines and 94,200] miles of [removed: natural] gas [removed: transmission, gathering and storage pipelines] [added: distribution mains] and [removed: 103,400] [added: related service facilities, which are supported by 6,200] miles of gas [removed: distribution pipeline, exclusive of service lines.][added: transmission, gathering and storage pipeline.]

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

[added: However, its Form 10-K] is filed separately and is not combined herein.

Dominion Energy continues to focus on expanding and improving its regulated and long-term contracted electric and natural gas [added: utility] businesses while transitioning to a cleaner energy future.

[removed: The $26 billion] [added: Its] growth capital [added: expenditure] plan for [removed: 2019] [added: 2021] through [removed: 2023] [added: 2025] includes a focus on upgrading the electric system in Virginia through investments in additional renewable generation facilities, strategic undergrounding and energy conservation programs.

Renewable generation facilities are expected to include [added: significant] investments in utility-scale solar and offshore wind projects.

In addition, Dominion Energy is currently [removed: seeking, or intends to seek,] [added: seeking] license extensions for its regulated nuclear power stations in Virginia.

[removed: Over the past decade,] Dominion Energy has [removed: transitioned] [added: continued its transition] to a more [removed: regulated, less volatile] [added: state-regulated] earnings mix as evidenced by its capital investments in regulated infrastructure, [removed: including] the SCANA [removed: Combination] and Dominion Energy Questar [removed: Combination,] [added: Combinations, the partially completed sale of substantially all of its gas transmission] and [removed: in infrastructure with output sold under long-term purchase agreements, as well as] [added: storage operations to BHE and] the divestiture of interests in certain [removed: merchant] [added: nonregulated] generating facilities and natural gas gathering and processing investments.

Dominion Energy expects [removed: approximately 95% of][added: to continue to make]

[added: Dominion Energy expects approximately 90% of] earnings from its primary operating segments to come from [removed: regulated] [added: state-regulated electric] and [removed: long-term contracted] [added: natural gas utility] businesses.

Dominion Energy’s operations are conducted through various subsidiaries, including Virginia [removed: Power and Dominion Energy Gas.][added: Power.]

Virginia [removed: Power]

[removed: ,] [added: Virginia Power,] 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.

Amounts and information disclosed for Dominion Energy are inclusive of Virginia [removed: Power and/or Dominion Energy Gas,] [added: Power,] where applicable.

At December 31, [removed: 2019,] [added: 2020,] Dominion Energy had approximately [removed: 19,100] [added: 17,300] full-time employees, of which approximately [removed: 5,400] [added: 4,700] are subject to collective bargaining agreements, including approximately 6,000 full-time employees at Virginia Power, of which approximately 2,500 are subject to collective bargaining [removed: agreements and approximately 1,400 full-time employees at Dominion Energy Gas, of which approximately 700 are subject to collective bargaining] agreements.

[added: The Companies make their SEC filings, 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, [added: available, free of charge,] 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 [added: *Environmental Strategy*, is not incorporated by reference in this report.]

[removed: Environmental Strategy][added: ENVIRONMENTAL STRATEGY]

The following [removed: are significant] acquisitions and divestitures [removed: by the Companies during] [added: within] the last [removed: five years.][added: three years are considered significant to the Companies.]

[removed: Pending] Acquisition of Interest in Atlantic Coast Pipeline and Pivotal LNG, Inc.

In [removed: February] [added: March] 2020, Dominion Energy [removed: entered into agreements with] [added: completed the acquisition from] Southern to acquire its 5% membership interest in Atlantic Coast Pipeline and its 100% ownership interest in Pivotal LNG, Inc., for [removed: approximately $175] [added: $184] million in aggregate, plus certain purchase price adjustments.

See Note [removed: 9] [added: 13] to the Consolidated Financial Statements for additional information.

[removed: Acquisition of] SCANA

[added: 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.

[removed: In] [added: Sale of Interest in Cove PointIn] 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.

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

Sale of Certain [removed: Merchant] [added: Nonregulated] Generation Facilities

See Note [removed: 10] [added: 13] to the Consolidated Financial Statements for additional information.

In 2019, Dominion Energy completed the acquisition of various [removed: merchant] [added: nonregulated] solar projects in North Carolina, South Carolina and Virginia.

These projects are expected to cost a total of approximately [removed: $425] [added: $730] million once constructed, including the initial acquisition cost, and generate approximately [removed: 241] [added: 398] MW combined.

[removed: The] [added: These] projects cost [removed: $541] [added: $415] million to construct, including the initial acquisition cost, and generate [removed: 259 MW.][added: approximately 242 MW combined.]

See [removed: Note 3 and Note] [added: Notes] 10 [added: and 13] to the Consolidated Financial Statements for additional information.

In 2019, Virginia Power entered into agreements to acquire various solar development projects in [removed: Virginia.][added: Virginia, with the acquisitions completed in 2019 and 2020.]

[removed: Four of these] [added: These] projects [removed: closed in 2019 and the fifth closed in January 2020 with a total] [added: are] expected [added: to] cost [added: a total] of approximately $765 million once constructed, including initial acquisition costs, and [removed: will] generate approximately 448 MW combined.

In [removed: 2017,] [added: 2020,] Virginia Power entered into [removed: agreements to acquire] [added: and completed the acquisition of] various solar development projects in [removed: North Carolina.][added: Virginia.]

See Note [removed: 10] [added: 13] to the Consolidated Financial Statements for [removed: additional] [added: further] information.

See Note [removed: 10] [added: 23] to the Consolidated Financial Statements for [removed: additional] information on [removed: certain of these sales of Marcellus and Utica acreage.][added: spent nuclear fuel.]

[removed: Operating Segments][added: See *Operating Segments* and Item 2.]

Dominion Energy also reports a Corporate and Other segment, which includes its corporate, service companies and other functions (including unallocated [removed: debt).][added: debt) as well as nonregulated retail energy marketing operations, including Dominion Energy’s noncontrolling interest in Wrangler.]

In addition, Dominion Energy owns approximately 2,400 miles of gas transmission, gathering and storage pipeline through entities under agreement to be sold to BHE.

As of December 31, 2020, Dominion Energy operates in 16 states and serves more than 7 million customers.

Other drivers for the growth capital plan include renewable natural gas initiatives and the replacement and modernization of gas distribution pipeline.

Dominion Energy’s nonregulated operations consist of primarily long-term contracted electric generation operations and its investment in Cove Point.

We also make available on the “Investors” page of our website additional information which may be important to investors, such as investor presentations, earnings release kits and other materials and presentations.

ACQUISITIONS AND DISPOSITIONS

Sales to BHE

In November 2020, Dominion Energy completed the GT&S Transaction with BHE for approximately $2.7 billion in cash proceeds and the assumption by BHE of approximately $5.3 billion of related long-term debt.

In October 2020, Dominion Energy entered into an agreement for the Q-Pipe Transaction with BHE for $1.3 billion in cash consideration and the assumption by BHE of approximately $430 million of related long-term debt.

This transaction is expected to close in early 2021, contingent on clearance or approval under the Hart-Scott-Rodino Act and other customary closing and regulatory conditions.

See Note 9 to the Consolidated Financial Statements for additional information, including the cancellation of the Atlantic Coast Pipeline Project.

Pivotal LNG, Inc. was included within the GT&S Transaction and sold to BHE in November 2020.

Dominion Energy Midstream was included within the GT&S Transaction and sold to BHE in November 2020.

In addition, a 25% controlling interest in Cove Point was included within the GT&S Transaction and sold to BHE in November 2020.

These projects are expected to cost a total of approximately $580 million once constructed, including initial acquisition costs, and generate approximately 282 MW.

*Acquisition* *of* *Nonregulated Solar* *Projects*

In 2020, Dominion Energy entered into agreements and completed the acquisition of various nonregulated solar projects in Ohio, South Carolina and Virginia with one project expected to close in 2022.

Equity Method Investments

In November 2020, Dominion Energy completed the second contribution consisting of certain retail energy natural gas contracts, receiving $74 million in cash and maintaining its 20% noncontrolling interest in Wrangler.

HUMAN CAPITAL

One of Dominion Energy's greatest strengths is its employees and Dominion Energy is committed to providing them with a safe, diverse and inclusive workplace.

The ability to attract, develop and retain a diverse workforce is integral to the long-term success of Dominion Energy.

Safety is the highest priority of Dominion Energy’s five core values with the fundamental goal to send every employee home safe and sound every day.

In 2020, Dominion Energy experienced an OSHA Recordable Rate of 0.41 compared to 0.62 in 2019.

These rates reflect Dominion Energy’s dedication to safety when compared to a 2019 BLS Industry Average OSHA Recordable Rate of 2.05.

As evidence of Dominion Energy’s commitment to safety, annual incentive plans for all employees, except as restricted by any collective bargaining agreements, include a safety performance measure.

Furthermore, Dominion Energy has been proactive in protecting its workforce during the global COVID-19 pandemic by establishing safety protocols, including requirements to wear face coverings and maintain physical distancing as well as new procedures for enhanced cleaning and temperature screening.

Dominion Energy also facilitated telecommuting for many employees and expanded paid time off and other benefits to help employees cope with disruptions caused by the pandemic.

Dominion Energy works to recruit, retain and develop the careers of talented individuals who reflect the communities it serves.

To cultivate this diversified workforce, Dominion Energy focuses on workforce diversity and inclusion while fostering an environment where employees can utilize their unique strengths, skills, personalities and life experiences.

In October 2020, Dominion Energy announced its commitment to increase workforce diversity by 1% annually until it achieves at least 40% diverse representation.

During 2020, Dominion Energy increased diverse representation within its workforce from 33.2% to 34.6%.

For the purposes of measuring diversity, Dominion Energy includes non-minority female, minority male, minority female and undeclared female.

In 2020 and 2019, the percentage of new hires that are diverse was 50% and 45%, respectively.

Dominion Energy sponsors eight employee resource groups to support and reinforce its culture of inclusiveness by enabling employees with shared interests and backgrounds to work together to create community, provide networking opportunities and encourage professional development.

The employee resource groups are aligned to support various forms of diversity and inclusion, including gender, sexual orientation, gender identity and expression, race, veteran status, age, ability and cultural heritage.

To further advance these initiatives, annual incentive plans for all employees, except as restricted by any collective bargaining agreements, include a performance measure for participation in diversity and inclusion training.

Dominion Energy attracts and retains its employees by offering competitive compensation and benefits packages, including healthcare, retirement, paid time off, parental leave and other benefits.

Dominion Energy also offers a variety of training and development opportunities for all employees with the goal to provide a consistent and progressive approach to training that engages the workforce and fosters a culture of learning.

To this end, Dominion Energy offers continuous learning opportunities including tuition assistance programs, professional development resources, access to a career center and a self-guided training program for independent learning as well as leadership development programs.

Dominion Energy

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

stock-for-stock

merger valued at $13.4 billion.

However, its Form

10-K

Other drivers for the growth capital expenditure plan include agriculture-waste-to-energy initiatives, the 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

600-mile

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

Dominion Energy’s nonregulated operations include merchant generation and natural gas retail energy marketing operations.

Dominion Energy Gas,

a limited liability company formed in September 2013,

is a wholly-owned subsidiary of Dominion Energy and a holding company.

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.

In addition, Dominion Energy Gas holds a 50% noncontrolling partnership interest in Iroquois, a FERC-regulated interstate natural gas pipeline.

All of Dominion Energy Gas’ membership interests are owned by Dominion Energy.

Employees

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.

Acquisitions and Dispositions

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.

In addition, Dominion Energy Gas’ wholly-owned subsidiaries, East Ohio and DGP, were distributed to Dominion Energy.

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

Sale of Interest in Cove Point

Acquisition of Dominion Energy Questar

In September 2016, Dominion Energy completed the Dominion Energy Questar Combination for total consideration of $4.4 billion and Dominion Energy Questar became a wholly-owned subsidiary of Dominion Energy.

Acquisition of Wholly-Owned Merchant Solar Projects

[removed: MD&A,] [added: See Notes 13 and 23 to the Consolidated Financial Statements,] which information is incorporated herein by reference, for discussion of [removed: various] [added: certain] legal, environmental and other regulatory proceedings to which the Companies are a party.

From time to time, the Companies are parties to various legal, environmental or other regulatory proceedings, including in the ordinary course of business.

SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that the Companies reasonably believe will exceed a specified threshold.

Pursuant to the SEC regulations, the Companies use a threshold of $1 million for such proceedings.

From time to time, the Companies are alleged to be in violation or in default under orders, statutes, rules or regulations relating to the environment, compliance plans imposed upon or agreed to by the Companies, or permits issued by various local, state and/or federal agencies for the construction or operation of facilities.

Administrative proceedings may also be pending on these matters.

In addition, in the ordinary course of business, the Companies and their subsidiaries are involved in various legal proceedings.

See Notes 13 and 23 to the Consolidated Financial Statements and

Future Issues and Other Matters

in Item 7.

FORM [added: 10-K]

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

For the fiscal year ended December 31, [removed: 2019][added: 2020]

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

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

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

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

| | [removed: | VIRGINIA (State] [added: Virginia (S*tate] or other jurisdiction of incorporation or [removed: organization) |] [added: organization)*] | |

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

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

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

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

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

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

Dominion Energy, Inc. Yes [added: ☒ No ☐ Virginia Electric and Power Company Yes ☒ No ☐]

[added: Dominion Energy, Inc. Yes ☐ No ☒] Virginia Electric and Power Company Yes [added: ☐ No ☒]

Dominion Energy, Inc. Yes [added: ☒ No ☐ Virginia Electric and Power Company Yes ☒ No ☐]

[added: Dominion Energy, Inc. Yes ☒ No ☐] Virginia Electric and Power Company Yes [added: ☒ No ☐]

Dominion Energy, Inc. Yes [added: ☒ No ☐ Virginia Electric and Power Company Yes ☐ No ☒]

[added: Dominion Energy, Inc. Yes ☐ No ☒] Virginia Electric and Power Company Yes [added: ☐ No ☒]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation [added: 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).]

[added: Dominion Energy, Inc. and] Virginia Electric and Power Company [removed: Yes]

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

[removed: filer, smaller reporting company, or an emerging] [added: | Large accelerated filer | ☒ | Accelerated filer | ☐ | Emerging] growth [removed: company.][added: company | ☐ |]

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

| [removed: Large accelerated filer ☒ | | Accelerated filer ☐ | |] Non-accelerated filer [removed: ☐] | [added: ☐] | Smaller reporting company [added: |] ☐ | [added: | |]

| [removed: | |] [added: Large accelerated filer] | [added: ☐] | [added: Accelerated filer] | [added: ☐] | Emerging growth company [added: | |] ☐ |

| [removed: Large accelerated filer ☐ | | Accelerated filer ☐ | |] Non-accelerated filer [removed: ☒] | [added: ☒] | Smaller reporting company [added: |] ☐ | [added: | | |]

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

[added: The aggregate market value] of Dominion [added: Energy, Inc. common stock held by non-affiliates of Dominion] Energy was approximately [removed: $62.0] [added: $68.0] 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: 14, 2020,] [added: 12, 2021,] Dominion Energy had [removed: 838,000,325] [added: 805,648,140] shares of common stock outstanding and Virginia Power had 274,723 shares of common stock outstanding.

Portions of Dominion Energy’s [removed: 2020] [added: 2021] Proxy Statement are incorporated by reference in Part III.

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

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

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

[added: | Companies | |] Dominion [removed: Energy, Inc., Virginia Electric] [added: Energy] and [added: Virginia Power, collectively |]

[removed: Power Company and] [added: | Wrangler | | Wrangler Retail Gas Holdings, LLC, a partnership between] Dominion Energy [added: and Interstate] Gas [removed: Holdings, LLC][added: Supply, Inc. | |]

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

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

| [removed: Part I |] [added: [Part I](#PART_I)] | | | |

| | | | |

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

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

| | | | | | |

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

| | | | |

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

| | | | |

| 1. | [Business](#ITEM_1_BUSINESS) | | 10 |

| 2. | [Properties](#ITEM_2_PROPERTIES) | | 45 |

| | | | |

| | | | |

| | | | |

| 16. | [Form 10-K Summary](#ITEM_16_FORM_10K_SUMMARY) | | 236 |

| 2019 BLS Industry Average OSHA Recordable Rate | | An average of the OSHA Recordable Rate for 2019 published by the Bureau of Labor Statistics for electric power generation, transmission and distribution (NAICS code 2211) and natural gas distribution (NAICS code 2212) |

| 2021 Triennial Review | | Virginia Commission review of Virginia Power’s earned return on base rate generation and distribution services for the four successive 12-month test periods beginning January 1, 2017 and ending December 31, 2020 |

| Altavista | | Altavista biomass power station |

| BHE | | The legal entity, Berkshire Hathaway Energy Company, one or more of its consolidated subsidiaries (including Dominion Energy Gas, Dominion Energy Midstream and Cove Point effective November 1, 2020), or the entirety of Berkshire Hathaway Energy Company and its consolidated subsidiaries |

| CARES Act | | Coronavirus Aid, Relief and Economic Security Act, enacted on March 27, 2020 |

| CCRO | | Customer credit reinvestment offset |

| CH4 | | Methane |

| Fountain Creek Solar | | A proposed 80 MW utility-scale solar power station located in Greensville County, Virginia |

| Grassfield Solar | | A proposed 20 MW utility-scale solar power station in Chesapeake, Virginia |

| GT&S Transaction | | The sale by Dominion Energy to BHE of Dominion Energy Gas, DGP, DECGS, Eastern Energy Field Services, Inc. (formerly known as Dominion Energy Field Services, Inc.) and Modular LNG Holdings, Inc. (formerly known as Dominion Modular LNG Holdings, Inc.) (which holds a 50% noncontrolling interest in JAX LNG) pursuant to a purchase and sale agreement entered into on July 3, 2020, which was completed on November 1, 2020 |

| GW | | Gigawatt |

| Hopewell | | Polyester biomass power station |

| JAX LNG | | JAX LNG, LLC, an LNG supplier in Florida serving the marine and LNG markets |

| Jones Act | | The Coastwise Merchandise Statute (commonly known as the Jones Act) 46 U.S.C. §55102 regulating U.S. maritime commerce |

| N2O | | Nitrous oxide |

| Norge Solar | | A proposed 20 MW utility-scale solar power station located in James City County, Virginia |

| NWP 12 | | A nationwide permit from the Army Corps of Engineers authorizing activities required for the construction, maintenance, repair and removal of utility lines, including electric transmission, gas pipelines, water and communications conduit and associate facilities in waters of the U.S. |

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

| OSHA Recordable Rate | | | Number of recordable cases, as defined by the Occupational Health and Safety Administration, a division of the U.S. Department of Labor, for every 100 employees over the course of a year |

| Otter Creek Solar | | | A proposed 60 MW utility-scale solar power station located in Mecklenburg County, Virginia |

| Q-Pipe Transaction | | | The proposed sale by Dominion Energy to BHE of Dominion Energy Questar Pipeline, DEQPS and QPC Holding Company, LLC (including its subsidiary Questar Southern Trails Pipeline Company), pursuant to a purchase and sale agreement entered into on October 5, 2020 |

| Rider CE | | A rate adjustment clause associated with the recovery of the costs related to certain renewable generation facilities in Virginia | |

| Rider RGGI | | A rate adjustment clause associated with the recovery of costs related to the purchase of allowances through the RGGI market-based trading program for CO2 | |

| Rider RPS | | A rate adjustment clause associated with the recovery of costs related to the mandatory renewable portfolio standard program established by the VCEA | |

| Abbreviation or Acronym | | | Definition |

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

10-K

| | | | | |

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

| | | | | |

| | | | | |

| | | | | |

| 001-37591 | | DOMINION ENERGY GAS HOLDINGS, LLC | | 46-3639580 |

| | | | | |

| | | | | |

| | | | | |

| | | | | | | |

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

DOMINION ENERGY GAS HOLDINGS, LLC

Limited Liability Company Membership Interests

No

No

Dominion Energy Gas Holdings, LLC Yes

No

No

No

Dominion Energy Gas Holdings, LLC Yes

No

No

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

No

Dominion Energy Gas Holdings, LLC Yes

No

non-accelerated

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

“non-accelerated

12b-2

of the Exchange Act.

| | | | | | | |

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

| | | | | | | | | |

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

| 36 | | | | | | | | |

As of December 31, [removed: 2019,] [added: 2020,] Dominion Energy owned its principal executive office in Richmond, Virginia and five other corporate offices.

Virginia Power [removed: and Dominion Energy Gas share] [added: shares] Dominion Energy’s principal [added: executive] office in Richmond, [removed: Virginia, which is owned by Dominion Energy.][added: Virginia.]

Dominion Energy’s assets consist primarily of its investments in its subsidiaries, the principal properties of which are described [removed: below.][added: below by operating segment.]

There were no bonds outstanding as of December 31, [removed: 2019;] [added: 2020;] however, by leaving the indenture open, Virginia Power [removed: expects to retain] [added: retains] the flexibility to issue mortgage bonds in the future.

Certain of Dominion Energy’s [removed: merchant] [added: nonregulated] generation facilities are also subject to liens.

In addition, Virginia Power’s electric distribution network includes approximately [removed: 58,400] [added: 58,900] miles of distribution lines, exclusive of service level lines, in Virginia and North Carolina.

[added: 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.

[added: 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: 471] [added: 473] substations.

The following tables list Virginia Power’s generating units and capability as of December 31, [removed: 2019.][added: 2020.]

| Plant | | Location | | [removed: | |] Net Summer Capability (MW) | | | | Percentage Net Summer Capability | | | [added: |]

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

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

| Brunswick County (CC) | | [removed: |] Brunswick County, VA | | | [removed: |] 1,376 | | | | | | [added: |]

| Warren County (CC) | | [removed: |] Warren County, VA | | | [removed: |] 1,370 | | | | | | [added: |]

| Ladysmith (CT) | | [removed: |] Ladysmith, VA | | | [removed: |] 783 | | | | | | [added: |]

| Bear Garden (CC) | | [removed: |] Buckingham County, VA | | | [removed: |] 622 | | | | | | [added: |]

| Remington (CT) | | [removed: |] Remington, VA | | | [removed: |] 622 | | | | | | [added: |]

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

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

| Elizabeth River (CT) | | [removed: |] Chesapeake, VA | | | [removed: |] 330 | | | | | | [added: |]

| Gordonsville Energy (CC) | | [removed: |] Gordonsville, VA | | | [removed: |] 218 | | | | | | [added: |]

| Gravel Neck (CT) | | [removed: |] Surry, VA | | | [removed: |] 170 | | | | | | [added: |]

| Darbytown (CT) | | [removed: |] Richmond, VA | | | [removed: |] 168 | | | | | | [added: |]

| Rosemary (CC) | | [removed: |] Roanoke Rapids, NC | | [added: 160] | | [removed: 160] | | | | | |

| Total Gas | | | | | [removed: |] [added: 8,253] | [removed: 8,413] | | | [added: 41] | [removed: 40] | % |

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

| Mt. Storm | | [removed: |] Mt. Storm, WV | | | [removed: |] 1,621 | | | | | | [added: |]

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

| Virginia City Hybrid Energy Center | | [removed: |] Wise County, VA | | | [removed: |] 610 | | | | | | [added: |]

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

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

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

| Surry | | [removed: |] Surry, VA | | | [removed: |] 1,676 | | | | | | [added: |]

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

| Total Nuclear | | | | | [removed: | |] 3,348 | | | | [removed: 16] [added: 17] | | [added: |]

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

| [removed: Yorktown |] [added: Yorktown(1)] | | Yorktown, VA | | [added: 790] | | [removed: 790] | | | | | |

| Possum Point [removed: |] [added: (CT)] | | Dumfries, VA | | [added: 72] | | [removed: 770] | | | | | |

| Gravel Neck (CT) | | [removed: |] Surry, VA | | [added: 198] | | [removed: 198] | | | | | |

Dominion Energy also owns various solar facilities, primarily at schools in Virginia, with an aggregate generation capacity of 9 MW.

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

| Spring Grove | | Surry County, VA | | | 98 | | | | | | |

| | | | | | 19,391 | | | | | | |

(1) Will be retired after it meets its capacity obligation in 2023.

(6) In accordance with the VCEA, these units will be retired no later than 2028.

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

| Grasshopper | | Mecklenburg County, VA | | | 80 | |

| Chestnut | | Halifax County, NC | | | 75 | |

| Total Non-Jurisdictional Generation | | | | | 440 | |

East Ohio’s integrated underground storage facilities have more than 60 bcf of working gas capacity to serve base and peak demand.

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

| | | | | | 5,291 | | | | | | |

CONTRACTED ASSETS

Contracted Assets includes Dominion Energy’s 50% noncontrolling interest in Cove Point.

In addition, Cove Point operates a 136-mile natural gas pipeline that connects the Cove Point LNG Facility to interstate natural gas pipelines.

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

| Hardin I | | Hardin County, OH | | | 97 | | | | | | |

| Greensville | | Greensville County, VA | | | 80 | | | | | | |

| Myrtle | | Suffolk, VA | | | 15 | | | | | | |

| *(2)* | All solar facilities are alternating current. |

The grants for most of its electric lines contain

rights-of-way

Where

rights-of-way

| |

| --- |

| 37 |

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

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

| Possum Point (CT) | | | Dumfries, VA | | | | 72 | | | | | |

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

| --- | --- |

| --- | --- |

| --- | --- |

| --- | --- |

| | | | | | | | | |

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

| 38 | | | | | | | | |

| | | | | | | | | |

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

| --- | --- |

Gas Transmission & Storage

Dominion Energy Gas has approximately 7,900 miles, excluding interests held by others, of gas transmission, gathering and storage pipelines located in the states of Colorado, Georgia, Maryland, New York, Ohio, Pennsylvania, South Carolina, Utah, Virginia, West Virginia and Wyoming.

send-out

capacity of approximately 1.8 million Dths and an aggregate LNG storage capacity of approximately 14.6 bcfe.

The total designed capacity of the underground storage fields operated by Dominion Energy Gas is approximately 900 bcf.

Certain storage fields are jointly-owned and operated by Dominion Energy Gas.

The capacity of those fields owned by Dominion Energy Gas’ partners totals approximately 240 bcf.

In total, Dominion Energy Gas has 111 compressor stations with approximately 1,200,000 installed compressor horsepower.

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.

The

right-of-way

estate, as underlying titles have been examined.

Where

rights-of-way

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

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

| Thomas F. Farrell, II [removed: (65)] [added: (66)] | | [added: Executive] Chairman of the Board of [removed: Directors,] [added: Directors from October 2020 to present;] President and CEO from April 2007 to [removed: date.] [added: September 2020.] |

| Robert M. Blue [removed: (52)] [added: (53)] | | [added: President and CEO from October 2020 to present; Director from November 2020 to present;] Executive Vice President and Co-COO from December 2019 to [removed: date;] [added: September 2020;] Executive Vice President and President & CEO—Power Delivery Group from May 2017 to November 2019; Senior Vice President and President & 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 [removed: 2016; President of Virginia Power from January 2014 to May 2015.] [added: 2016.] |

| James R. Chapman [removed: (50)] [added: (51)] | | Executive Vice President, CFO and Treasurer from January 2019 to [removed: date;] [added: present;] Senior Vice President, 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 [removed: 2016; Vice President—Corporate Finance and Mergers & Acquisitions from January 2015 to May 2015.] [added: 2016.] |

| Diane Leopold [removed: (53)] [added: (54)] | | Executive Vice President and [added: COO from October 2020 to present; Executive Vice President and] Co-COO from December 2019 to [removed: date;] [added: September 2020;] Executive Vice President and President & CEO—Gas Infrastructure Group from May 2017 to November 2019; Senior Vice President and President & CEO—Dominion Energy from January 2017 to May 2017; President of [removed: DETI,] East Ohio [removed: and DCP] from January 2014 to [removed: date.] [added: September 2020.] |

| P. Rodney Blevins [removed: (55)] [added: (56)] | | [removed: President— Dominion] [added: President—Dominion] Energy South Carolina from December 2019 to [removed: date;] [added: present;] President & Chief Executive Officer—Southeast Energy Group from January 2019 to November 2019; Senior Vice President and Chief Information Officer from January 2014 to December 2018. |

| Donald R. Raikes [removed: (57)] [added: (58)] | | President—Gas Distribution of Dominion Energy from December 2019 to [removed: date] [added: present] and of Hope, East Ohio, PSNC, and Questar Gas from October 2019 to [removed: date;] [added: September 2020; President of Hope, East Ohio, PSNC, and Questar Gas from October 2020 to present;] 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. |

| Daniel G. Stoddard [removed: (57)] [added: (58)] | | Senior Vice President, Chief Nuclear Officer and President—Contracted [added: Assets from September 2020 to present; Senior Vice President, Chief Nuclear Officer and President—Contracted] Generation from December 2019 to [removed: date;] [added: August 2020;] Senior Vice President and Chief Nuclear Officer of Virginia Power from October 2016 to [removed: date;] [added: present;] Senior Vice President—Nuclear Operations of Virginia Power from May 2011 to September 2016. |

| Carlos M. Brown [removed: (45)] [added: (46)] | | Senior Vice President, General Counsel and Chief Compliance Officer from December 2019 to [removed: date;] [added: present;] Senior Vice President and General Counsel from January 2019 to 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 [removed: 2016; Director—Alternative Energy Solutions Business Development & Commercialization of DES from January 2013 to June 2015.] [added: 2016.] |

| William L. Murray [removed: (52)] [added: (53)] | | Senior Vice President—Corporate Affairs & Communications from February 2019 to [removed: date;] [added: present;] 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: (52)] [added: (53)] | | [added: Senior] Vice President, Controller and CAO from [added: October 2020 to present; Vice President, Controller and CAO from] April 2014 to [removed: date.] [added: September 2020.] |

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

| Edward H. Baine (47) | | President—Dominion Energy Virginia from October 2020 to present; Senior Vice President—Power Delivery of Virginia Power from December 2019 to September 2020; Senior Vice President—Distribution of Virginia Power from February 2016 to November 2019; Senior Vice President—Transmission and Customer Service of Virginia Power from June 2015 to January 2016. |

| Name and Age | | Business Experience Past Five Years(1) |

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

| | | | | | | | | |

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

| 42 | | | | | | | | |

| | | |

| 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. |

| | | | | | | | | |

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

| | | | | | | 43 | | |

At February [removed: 14, 2020,] [added: 12, 2021,] there were approximately [removed: 134,000] [added: 130,000] 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 [added: *Liquidity and Capital Resources* in Item 7.]

[removed: | Dominion Energy] Purchases [removed: Of] [added: of] Equity Securities [removed: | | | | | | | | | | | | | | | | |]

| Period | | Total Number of Shares (or Units) Purchased [removed: (1)] | | | | [added: | |] Average Price Paid per Share (or [removed: Unit) (2)] [added: Unit)(4)] | | | | [added: | | |] Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | | | | [added: | | |] Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased under the Plans or [removed: Programs (3) |] [added: Programs(5)] | |

| [removed: (1)] [added: *(1)*] | Represents shares [added: of common stock] that were tendered by employees to satisfy tax withholding obligations on vested restricted stock. |

| [removed: (2)] [added: *(4)*] | Represents the weighted-average price paid per share. |

Virginia Power intends to pay quarterly cash dividends in [removed: 2020] [added: 2021] but is neither required to nor restricted, except as described in Note 21 to the Consolidated Financial Statements, from making such payments.

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| 10/1/20-10/31/20 | | | 52,079 | | (1) | | $ | | 78.59 | | | | | | | — | | | | | $ 0.62 billion | | |

| 11/1/20-11/30/20 | | | 3,049,613 | | (2) | | | | 80.36 | | | | | | | 3,029,827 | | | | | 1.48 billion | | |

| 12/1/20-12/31/20 | | | 7,387,403 | | (3) | | | | 76.22 | | | | | | | 7,387,403 | | | | | 0.92 billion | | |

| Total | | | 10,489,095 | | | | $ | | 77.44 | | | | | | | 10,417,230 | | | | | $ 0.92 billion | | |

| *(2)* | Includes (i) 19,786 shares of common stock that were tendered by employees to satisfy tax withholding obligations on vested restricted stock;(ii) 1,647,192 shares of common stock purchased in open market transactions for an aggregate of approximately $132 million; and (iii) 1,382,635 shares of common stock delivered upon the completion of the purchase periods under two prepaid accelerated share repurchase agreements entered into by Dominion Energy in September 2020. |

| *(3)* | Includes (i) 2,045,345 shares of common stock purchased in open market transactions for an aggregate of approximately $163 million and (ii) 5,342,058 shares of common stock delivered to Dominion Energy under an accelerated share repurchase program. Dominion Energy entered into a prepaid accelerated share repurchase agreement with a financial institution in December 2020 to purchase $400 million in shares of common stock. No additional shares will be delivered under this agreement as the repurchase period ended in December 2020. |

| --- | --- |

| *(5)* | In July 2020, the Dominion Energy Board of Directors authorized the repurchase of up to $3.0 billion in shares of common stock and rescinded its prior repurchase authorization approved in February 2005 and modified in June 2007. Dominion Energy completed repurchases under this authorization in December 2020. In November 2020, the Dominion Energy Board of Directors authorized the repurchase of up to $1.0 billion of shares of common stock in addition to the repurchase program authorized in July 2020. This repurchase program has no expiration date or price or volume targets and may be modified suspended or terminated at any time. Shares may be purchased through open market or privately negotiated transactions or otherwise at the discretion of management subject to prevailing market conditions, applicable securities laws and other factors. |

| --- | --- |

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 2019:

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

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| 10/1/19-10/31/19 | | | 31,435 | | | | $81.22 | | | | — | | | 19,629,059 shares/$ | 1.18 billion | |

| 11/1/19-11/30/19 | | | 401 | | | | 83.08 | | | | — | | | 19,629,059 shares/$ | 1.18 billion | |

| 12/1/19-12/31/19 | | | 2,429 | | | | 83.11 | | | | — | | | 19,629,059 shares/$ | 1.18 billion | |

| Total | | | 34,265 | | | | $81.38 | | | | — | | | 19,629,059 shares/$ | 1.18 billion | |

| (3) | The remaining repurchase authorization is pursuant to repurchase authority granted by the Dominion Energy Board of Directors in February 2005, as modified in June 2007. The aggregate authorization granted by the Dominion Energy Board of Directors was 86 million shares (as adjusted to reflect a two-for-one stock split distributed in November 2007) not to exceed $4 billion. |

Dominion Energy Gas

All of Dominion Energy Gas’ membership interests are owned by Dominion Energy.

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

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| 44 | | | | | | | | |

| Year Ended December [removed: 31,] [added: 31,(1)] | | [removed: 2019 (1)] [added: 2020(2)] | | | | [removed: 2018 (2)] [added: 2019(3)] | | | | [removed: 2017 (3)] [added: 2018(4)] | | | | [removed: 2016 (4)] [added: 2017(5)] | | | | [removed: 2015] [added: 2016(6)] | | |

| Dividends declared per common share | | | [removed: 3.67] [added: 3.45] | | | | [removed: 3.34] [added: 3.67] | | | | [removed: 3.035] [added: 3.34] | | | | [removed: 2.80] [added: 3.035] | | | | [removed: 2.59] [added: 2.80] | |

| Total assets | | | [removed: 103,823] [added: 95,905] | | | | [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: (1)] | [added: *(3)* |] 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 [removed: $319] [added: $286] 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. |

| [removed: (2)] | [added: *(4)* |] Includes $568 million after-tax gains on sales of certain [removed: merchant] [added: nonregulated] 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 customers. |

| [removed: (3)] | [added: *(5)* |] 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 facilities. |

| [removed: (4)] | [added: *(6)* |] Includes a $122 million after-tax charge related to future ash pond and landfill closure costs at certain utility generation facilities. |

| [removed: (5)] | [added: *(7)* |] Includes finance leases. |

| Operating revenue | | $ | 14,172 | | | $ | 14,401 | | | $ | 11,199 | | | $ | 11,004 | | | $ | 10,320 | |

| Net income from continuing operations attributable | | | | | | | | | | | | | | | | | | | | |

| to Dominion Energy | | | 1,583 | | | | 653 | | | | 2,087 | | | | 2,707 | | | | 1,809 | |

| Net income from continuing operations attributable | | | | | | | | | | | | | | | | | | | | |

| to Dominion Energy per common share-basic | | | 1.83 | | | | 0.79 | | | | 3.19 | | | | 4.26 | | | | 2.93 | |

| Net income from continuing operations attributable | | | | | | | | | | | | | | | | | | | | |

| to Dominion Energy per common share-diluted | | | 1.82 | | | | 0.75 | | | | 3.19 | | | | 4.26 | | | | 2.93 | |

| Long-term debt(7) | | | 33,957 | | | | 28,998 | | | | 27,075 | | | | 26,951 | | | | 26,271 | |

| | *(1)* | Operating revenue, net income and earnings per share exclude amounts presented in discontinued operations related to the gas transmission and storage operations sold to, or under contract to be sold to, BHE as well as Dominion Energy’s investment in Atlantic Coast Pipeline. Long-term debt excludes amounts reflected as held-for-sale. See Note 3 to Dominion Energy’s Consolidated Financial Statements for more information regarding the amounts presented as discontinued operations or held-for-sale. |

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

| | *(2)* | Includes $559 million after-tax charge associated primarily with the planned early retirement of certain electric generation facilities, $496 million of after-tax charges for an impairment attributable to Dominion Energy’s interests in certain nonregulated solar generation facilities and a contract termination in connection with the sale of Fowler Ridge, $191 million of after-tax charges for expected CCRO and customer arrears forgiveness for Virginia utility customers and $93 million of after-tax charges associated with litigation acquired in the SCANA Combination, partially offset by a $264 million after-tax net gain related to nuclear decommissioning trust funds. |

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| Operating revenue | | $ | 16,572 | | | $ | 13,366 | | | $ | 12,586 | | | $ | 11,737 | | | $ | 11,683 | |

| Net income attributable to Dominion Energy | | | 1,358 | | | | 2,447 | | | | 2,999 | | | | 2,123 | | | | 1,899 | |

| Net income attributable to Dominion Energy per common share-basic | | | 1.66 | | | | 3.74 | | | | 4.72 | | | | 3.44 | | | | 3.21 | |

| Net income attributable to Dominion Energy per common share-diluted | | | 1.62 | | | | 3.74 | | | | 4.72 | | | | 3.44 | | | | 3.20 | |

| Long-term debt (5) | | | 33,824 | | | | 31,144 | | | | 30,948 | | | | 30,231 | | | | 23,468 | |

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| | | | | | | 45 | | |

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

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

| [Report of Independent Registered Public Accounting [removed: Firm](#tx854390_24) | | | 71] [added: Firm](#REPORT_INDEPENDENT_REGISTERED_PUBLIC_1)] | [added: 86] |

| [Consolidated Statements of Income for the years ended [removed: December] [added: December](#CONSOLIDATED_STATEMENTS_INCOME_1)] 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#tx854390_25) | | | 74] [added: 2018] | [added: 90] |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#tx854390_26) | | | 75] [added: 2018](#CONSOLIDATED_STATEMENTS_COMPREHENSIVE_IN)] | [added: 91] |

| [Consolidated Balance Sheets at December 31, [removed: 2019] [added: 2020] and [removed: 2018](#tx854390_27) | | | 76] [added: 2019](#D_BS)] | [added: 92] |

| [Consolidated Statements of Equity at December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] and for the years then [removed: ended](#tx854390_28) | | | 78] [added: ended](#D_SOE)] | [added: 94] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#tx854390_29) | | | 79] [added: 2018](#D_SOCF)] | [added: 95] |

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

| [Report of Independent Registered Public Accounting [removed: Firm](#tx854390_30) | | | 81] [added: Firm](#REPORT_INDEPENDENT_RETERED_PUBLIC_ACC_2)] | [added: 97] |

| [Consolidated Statements of Income for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#tx854390_31) | | | 82] [added: 2018](#VP_IS_Consolidated_Statements_of_Income)] | [added: 100] |

| [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#tx854390_32) | | | 83] [added: 2018](#VP_Consolidated_Statements_of_Compr)] | [added: 101] |

| [Consolidated Balance Sheets at December 31, [removed: 2019] [added: 2020] and [removed: 2018](#tx854390_33) | | | 84] [added: 2019](#VP_Consolidated_Balance_Sheets)] | [added: 102] |

| [Consolidated Statements of Common Shareholder’s Equity at December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017] [added: 2018] and for the years then [removed: ended](#tx854390_34) | | | 86] [added: ended](#VP_Consolidated_Statements_ShareEqu)] | [added: 104] |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2019, 2018] [added: 2020, 2019] and [removed: 2017](#tx854390_35) | | | 87] [added: 2018](#VP_Consolidated_Statements_of_Cash_Flows)] | [added: 105] |

[removed: | [Consolidated Statements of Cash Flows for] [added: For] the years ended December 31, [removed: 2019, 2018] [added: 2020] and [removed: 2017](#tx854390_41) | | | 95 | |][added: 2019, cash paid for amounts included in the measurement of the lease liabilities consisted of the following amounts, included in the Companies’ Consolidated Statements of Cash Flows:]

| [Combined Notes to Consolidated Financial [removed: Statements](#tx854390_42) | | | 97] [added: Statements](#COMBINED_NOTES_TO_CONSOLIDATED_FINANCIAL)] | [added: 106] |

To the Shareholders and the Board of Directors of [added: Dominion Energy, Inc.]

[added: |] Dominion Energy, Inc. [added: total principal(10) | | | | | | $ | 35,496 | | | $ | 31,557 | |]

We have audited the accompanying consolidated balance sheets of Dominion Energy, Inc. and subsidiaries [removed: (“Dominion Energy”)] [added: ("Dominion Energy")] at December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of income, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] and the related notes (collectively referred to as the [removed: “consolidated] [added: "consolidated] financial [removed: statements”).][added: statements").]

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Dominion Energy at December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), Dominion [removed: Energy’s] [added: Energy's] internal control over financial reporting at December 31, [removed: 2019,] [added: 2020,] based on criteria established in [added: *Internal Control — Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2021, expressed an unqualified opinion on Dominion Energy's internal control over financial reporting.]

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit [added: committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments.]

[removed: committee] [added: The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the Board of Directors] and that (1) [removed: relate] [added: relates] to accounts or disclosures that are material to the financial statements and (2) involved [removed: our] especially challenging, subjective, or complex judgments.

The Atlantic Coast Pipeline [removed: project is] [added: Project had been] the subject of challenges in federal [removed: courts,] [added: courts] including, among others, challenges of the Atlantic Coast Pipeline [removed: project’s] [added: Project’s] biological opinion and incidental take statement, permits providing right of way crossings of certain federal lands, the [removed: U.S.] Army Corps of Engineers 404 permit, the air permit for a compressor station at Buckingham, Virginia, and the [removed: Federal Energy Regulatory Commission (“FERC”)] [added: FERC] order approving the [removed: Certificate of Public Convenience and Necessity.][added: CPCN.]

Our audit procedures related to [removed: this critical audit matter] [added: the impairment of the solar generation assets held in partnerships] included the following, among others:

| | • | We tested the effectiveness of controls over management’s technical accounting assessment of the [removed: balance sheet classification of the components] [added: presentation] of the [removed: 2019 Equity Units.] [added: equity method earnings (loss) from Atlantic Coast Pipeline.] |

| | • | With the assistance of professionals in our firm having expertise in [removed: accounting for debt and equity instruments,] [added: discontinued operations,] we evaluated management’s conclusions regarding the [removed: balance sheet classification of the components of the 2019 Equity Units through evaluation] [added: presentation] of the [removed: terms within the applicable agreements and] [added: equity method earnings (loss) from Atlantic Coast Pipeline by] considering the applicable generally accepted accounting standards. |

| | • | We evaluated Dominion Energy’s disclosures related to the financial statement impacts of the [removed: transaction.] [added: impairment.] |

Regulatory Assets and [removed: Liabilities—Impact] [added: Liabilities - Impact] of Rate Regulation on the Consolidated Financial [removed: Statements—Refer] [added: Statements — Refer] to Notes 2, 12 and 13 to the Consolidated Financial Statements

Dominion Energy, through its regulated electric and gas subsidiaries, is subject to rate regulation by certain state public utility commissions and [removed: FERC] [added: the Federal Energy Regulatory Commission (“FERC”)] (collectively, the “relevant commissions”) which have jurisdiction with respect to the rates of electric utility and natural gas distribution and transmission companies.

Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant and equipment, net; regulatory assets; regulatory liabilities; operating revenues; other operations and maintenance expense; [removed: and] depreciation, depletion and amortization [removed: expense,] [added: expense; and impairment of assets and other charges,] collectively, the “financial statement impacts of rate regulation.”

Further, Virginia Electric and Power Company’s (“Virginia Power”) retail base rates, terms and conditions for generation and distribution services to customers in Virginia are reviewed by the Virginia [added: State Corporation] Commission [added: (the “Virginia Commission”)] in a proceeding that involves the determination of Virginia Power’s actual earned return on equity (“ROE”) during a historic test period, [removed: and the determination of Virginia Power’s authorized]

| | • | We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) recovery of regulatory assets through future rates, and (2) whether a regulatory liability is due to customers. We also tested the effectiveness of management’s controls over the initial recognition of amounts as regulatory assets or liabilities; and the monitoring and evaluation of regulatory [added: and legislative] developments that may impact the assessment of whether recovery of regulatory assets through future rates or a regulatory liability due to customers is probable. |

| | • | We evaluated Dominion Energy’s disclosures related to the [removed: consolidated] financial statement impacts of rate regulation. |

| | • | We considered the likelihood of (1) recovery of regulatory assets through future rates and (2) whether a regulatory liability is due to customers based on [removed: precedence] [added: precedents] established by the relevant commissions’ previous orders and Dominion Energy’s past experience with the relevant commissions. |

| Year Ended December 31, | | [removed: 2019] [added: 2020] | | | | [removed: 2018] [added: 2019] | | | | [removed: 2017] [added: 2018] | | |

| Operating Revenue [removed: (1)] | | [removed: $] | [removed: 16,572] [added: —] | | | [removed: $] | [removed: 13,366] [added: (1] | [added: )] | | [removed: $] | [removed: 12,586] [added: (2] | [added: )] |

| Electric fuel and other energy-related purchases | | | [removed: 2,938] [added: (33] | [added: )] | | | [removed: 2,814] [added: (22] | [added: )] | | | [removed: 2,301] [added: (15] | [added: )] |

| Purchased electric capacity | | | [removed: 88] [added: 53] | | | | [removed: 122] [added: 88] | | | | [removed: 6] [added: 122] | |

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| | |

| | |

and determination of Virginia Power’s authorized ROE prospectively.

In connection with the evaluation of Virginia Power’s earnings for the four-year test period ended December 31, 2020, Virginia Power recorded a charge of $130 million for the year ended December 31, 2020 for benefits it expects to provide to its customers through the use of a customer credit reinvestment offset in accordance with the Virginia Grid Transformation and Security Act of 2018 (“GTSA”).

This evaluation included consideration of the regulatory treatment of a charge of $754 million ($561 million after-tax) recorded in the first quarter of 2020, associated with Virginia Power’s commitment to retire certain coal- and oil-fired generating units before the end of their useful lives.

Virginia Power determined it was appropriate to consider this charge to be recovered as a component of Virginia Power’s base rates under the GTSA.

This determination required management judgment.

| | • | We assessed the regulatory treatment of significant non-recurring charges, including the $754 million charge recorded by Virginia Power in the first quarter of 2020 in connection with the early retirement decision impacting certain coal- and oil-fired generating units by considering existing precedent for the treatment of such charges, relevant legislation and regulatory orders. |

Impairment of Non-Wholly-Owned Nonregulated Solar Facilities— Refer to Note 10 to the Consolidated Financial Statements

Dominion Energy performs an evaluation for impairment whenever events or changes in circumstances indicate that the carrying amount of long-lived assets with finite lives may not be recoverable.

A long-lived asset is written down to fair value if the sum of its expected future undiscounted cash flows is less than its carrying amount.

In the third quarter of 2020, Dominion Energy performed a strategic review of its long-term intentions for its contracted nonregulated solar generation assets in partnerships outside of its core electric service territories in consideration of the impact of the Virginia Clean Economy Act and Dominion Energy’s decision to sell substantially all of its gas transmission and storage operations.

As a result, Dominion Energy recorded a charge of $665 million ($293 million after-tax attributable to Dominion Energy and $267 million attributable to noncontrolling interest) in impairment of assets and other charges in its Consolidated Statements of Income for year ended December 31, 2020 to adjust the property, plant and equipment down to its estimated fair value of $1.4 billion.

We identified the impairment of the contracted nonregulated solar generation assets held in partnerships as a critical audit matter due to the high degree of auditor judgment and an increased level of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate (1) the timing of management’s identification of the triggering event requiring the recoverability test, (2) the reasonableness of the probabilities assigned by management to the scenarios utilized within the recoverability model (3) the estimates underlying the future cash flows in scenarios utilized and, (4) the selection of a discount rate in deriving the fair value of the assets.

| | • | We tested the effectiveness of management’s controls over the impairment evaluation, including those over the identification of triggering events requiring recoverability tests, and those addressing the appropriateness of the key assumptions used in the recoverability test, including those addressing the probabilities assigned to the scenarios utilized and those addressing key assumptions utilized in estimation of the fair value of the assets, including selection of a discount rate. |

| | • | We evaluated whether the timing of the identification of the triggering event was appropriate, as well as the reasonableness of probabilities management assigned to scenarios utilized in the recoverability test by: |

| | o | Reading and analyzing the minutes of the Boards of Directors of Dominion Energy for discussions of changes in legal, regulatory, or business factors which could impact management’s conclusions with respect to the probabilities assigned to the scenarios utilized. |

| | o | Making inquiries of executive management, and |

| | o | Obtaining and considering the timing and content of business unit presentations concerning management’s future plans with respect to the solar partnerships. |

| | • | We evaluated the reasonableness of the fair value model by: |

| | o | Testing the mathematical accuracy of the model, |

| | o | Evaluating the reasonableness of the forecasted cash flows by comparing cash flow projections to current executed contracts, historical revenues and gross margins, and industry trends, and |

| | o | With the assistance of our fair value specialists, evaluating the reasonableness of the discount rate utilized in the model by developing a range of independent estimates and comparing those to the discount rate selected by management. |

Earnings (loss) from equity method investees– Presentation of Loss from Atlantic Coast Pipeline in Discontinued Operations — Refer to Note 9 to the Consolidated Financial Statements

Dominion Energy holds a 53% noncontrolling interest in Atlantic Coast Pipeline, LLC (“Atlantic Coast Pipeline”) which since its formation in September 2014 had been focused on the construction of an approximately 600-mile natural gas pipeline.

Atlantic Coast Pipeline determined that the pipeline was probable of abandonment in June 2020, and it fully impaired the related asset under construction which resulted in an equity method loss to Dominion Energy of $2.3 billion.

In connection with Dominion Energy’s decision to sell substantially all of its gas transmission and storage operations, which it determined to be a strategic shift, Dominion Energy has reflected the results of its equity method investment in Atlantic Coast Pipeline as discontinued operations in its Consolidated Statements of Income.

Auditing the conclusion that the equity method earnings (loss) associated with Dominion Energy’s investment in Atlantic Coast Pipeline was appropriately presented in discontinued operations involved significant judgment in applying the accounting standards as to when an equity method investee can be considered abandoned.

Our audit procedures related to the assessment of whether the equity method loss associated with Dominion Energy’s investment in Atlantic Coast Pipeline was appropriately presented in discontinued operations included the following, among others:

| | • | We evaluated Dominion Energy’s disclosures related to the presentation of equity method earnings (loss) on Atlantic Coast Pipeline as discontinued operations. |

| Other taxes | | | 871 | | | | 883 | | | | 580 | |

| Total operating expenses | | | 12,117 | | | | 12,857 | | | | 8,186 | |

| Income from operations | | | 2,055 | | | | 1,544 | | | | 3,013 | |