Item 8. Financial Statements and Supplementary Data

	Page Number
Dominion Energy, Inc.
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)	81
Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019	83
Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019	84
Consolidated Balance Sheets at December 31, 2021 and 2020	85
Consolidated Statements of Equity at December 31, 2021, 2020 and 2019 and for the years then ended	87
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019	88
Virginia Electric and Power Company
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)	89
Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019	91
Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019	92
Consolidated Balance Sheets at December 31, 2021 and 2020	93
Consolidated Statements of Common Shareholder’s Equity at December 31, 2021, 2020 and 2019 and for the years then ended	95
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019	96
Combined Notes to Consolidated Financial Statements	97

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Dominion Energy, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Dominion Energy, Inc. and subsidiaries ("Dominion Energy") at December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Dominion Energy at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, 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 Energy's internal control over financial reporting at December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2022, expressed an unqualified opinion on Dominion Energy's internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of Dominion Energy's management. Our responsibility is to express an opinion on Dominion Energy's consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to Dominion Energy in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

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 audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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

Critical Audit Matter Description

Dominion Energy, through its regulated electric and gas subsidiaries, is subject to rate regulation by certain state public utility commissions and 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 companies. Management has determined its rate-regulated subsidiaries meet the requirements under accounting principles generally accepted in the United States of America to apply the specialized rules to account for the effects of cost-based rate regulation. 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; depreciation, depletion and amortization expense; and impairment of assets and other charges, collectively, the “financial statement impacts of rate regulation.”

Revenue provided by Dominion Energy’s electric transmission, distribution and generation operations and its gas distribution operations is based primarily on rates approved by the relevant commissions. 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 State Corporation Commission (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, and determination of Virginia Power’s

authorized ROE prospectively. Under certain circumstances, Virginia Power may be required to credit a portion of its earnings to customers.

When it is probable that regulators will permit the recovery of current costs through future rates charged to customers, these costs that otherwise would be expensed by nonregulated companies are deferred as regulatory assets. Likewise, regulatory liabilities are recognized when it is probable that regulators will require customer refunds or other benefits through future rates or when revenue is collected from customers for expenditures that have yet to be incurred. Dominion Energy evaluates whether recovery of its regulatory assets through future rates is probable as well as whether a regulatory liability due to customers is probable and makes various assumptions in its analyses. These analyses are generally based on orders issued by regulatory commissions, legislation and judicial actions; past experience; discussions with applicable regulatory authorities and legal counsel; forecasted earnings; and considerations around the likelihood of impacts from events such as unusual weather conditions, extreme weather events, and other natural disasters, and unplanned outages of facilities.

We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about the financial statement impacts of rate regulation. Management judgments include assessing the likelihood of (1) recovery of its regulatory assets through future rates and (2) whether a regulatory liability is due to customers. Given management’s accounting judgments are based on assumptions about the outcome of future decisions by the relevant commissions, auditing these judgments required specialized knowledge of the accounting for rate regulation and the rate setting process due to its inherent complexities.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the assessment of whether recovery of regulatory assets through future rates or a regulatory liability due to customers is probable included the following, among others:

	•	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 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 financial statement impacts of rate regulation.

	•	We read and evaluated orders issued by the relevant commissions, as well as relevant regulatory statutes, interpretations, procedural memorandums, filings made by interveners, existing laws and other publicly available information to assess whether this external information was properly considered by management in concluding upon the 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 precedents established by the relevant commissions’ previous orders and Dominion Energy’s past experience with the relevant commissions.

	•	For regulatory matters in process, we inspected associated documents and testimony filed with the relevant commissions for any evidence that might contradict management’s assertions.

	•	We read and analyzed the minutes of the Boards of Directors of Dominion Energy and Dominion Energy’s rate-regulated subsidiaries for discussions of changes in legal, regulatory, or business factors which could impact management’s conclusions with respect to the financial statement impacts of rate regulation.

/s/ Deloitte & Touche LLP

Richmond, Virginia

February 24, 2022

We have served as Dominion Energy’s auditor since 1988.

Dominion Energy, Inc.

Consolidated Statements of Income

Year Ended December 31,		2021				2020				2019
(millions, except per share amounts)
Operating Revenue		$	13,964			$	14,172			$	14,401
Operating Expenses
Electric fuel and other energy-related purchases			2,368				2,243				2,885
Purchased electric capacity			70				53				88
Purchased gas			1,083				889				1,560
Other operations and maintenance			3,734				3,685				3,790
Depreciation, depletion and amortization			2,478				2,332				2,283
Other taxes			909				871				883
Impairment of assets and other charges			195				2,105				1,520
Losses (gains) on sales of assets			108				(61	)			(152	)
Total operating expenses			10,945				12,117				12,857
Income from operations			3,019				2,055				1,544
Earnings from equity method investees			276				40				8
Other income			1,157				693				803
Interest and related charges			1,354				1,377				1,486
Income from continuing operations including noncontrolling interests before income tax expense			3,098				1,411				869
Income tax expense			425				83				209
Net Income From Continuing Operations Including Noncontrolling Interests			2,673				1,328				660
Net Income (Loss) From Discontinued Operations Including Noncontrolling Interests(1)(2)			641				(1,878	)			716
Net Income (Loss) Including Noncontrolling Interests			3,314				(550	)			1,376
Noncontrolling Interests			26				(149	)			18
Net Income (Loss) Attributable to Dominion Energy		$	3,288			$	(401	)		$	1,358
Amounts attributable to Dominion Energy
Net income from continuing operations		$	2,647			$	1,583			$	653
Net income (loss) from discontinued operations			641				(1,984	)			705
Net income (loss) attributable to Dominion Energy		$	3,288			$	(401	)		$	1,358
EPS - Basic
Net income from continuing operations		$	3.19			$	1.83			$	0.79
Net income (loss) discontinued operations			0.79				(2.39	)			0.87
Net income (loss) attributable to Dominion Energy		$	3.98			$	(0.56	)		$	1.66
EPS - Diluted
Net income from continuing operations		$	3.19			$	1.82			$	0.75
Net income (loss) discontinued operations			0.79				(2.39	)			0.87
Net income (loss) attributable to Dominion Energy		$	3.98			$	(0.57	)		$	1.62

(1)	See Note 9 for amounts attributable to related parties.

(2)	Includes income tax expense (benefit) of $188 million, $(204) million and $142 million for the years ended December 31, 2021, 2020 and 2019, respectively.

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

Dominion Energy, Inc.

Consolidated Statements of Comprehensive Income

Year Ended December 31,		2021				2020				2019
(millions)
Net income (loss) including noncontrolling interests		$	3,314			$	(550	)		$	1,376
Other comprehensive income (loss), net of taxes:
Net deferred gains (losses) on derivatives-hedging activities, net of $(6), $81 and $35 tax			15				(239	)			(110	)
Changes in unrealized net gains (losses) on investment securities, net of $7, $(14) and $(14) tax			(7	)			43				39
Changes in net unrecognized pension and other postretirement benefit costs, net of $(54), $(2) and $(4) tax			144				25				(22	)
Amounts reclassified to net income (loss):
Net derivative (gains) losses-hedging activities, net of $(15), $(75) and $21 tax			46				227				(62	)
Net realized (gains) losses on investment securities, net of $5, $6 and $1 tax			(18	)			(18	)			(4	)
Net pension and other postretirement benefit costs, net of $(29), $(13) and $(23) tax			82				37				66
Changes in other comprehensive income from equity method investees, net of $1, $(1) and $— tax			(3	)			1				—
Total other comprehensive income (loss)			259				76				(93	)
Comprehensive income (loss) including noncontrolling interests			3,573				(474	)			1,283
Comprehensive income (loss) attributable to noncontrolling interests			26				(149	)			18
Comprehensive income (loss) attributable to Dominion Energy		$	3,547			$	(325	)		$	1,265

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

Dominion Energy, Inc.

Consolidated Balance Sheets

At December 31,		2021				2020
(millions)
ASSETS
Current Assets
Cash and cash equivalents		$	283			$	172
Customer receivables (less allowance for doubtful accounts of $40 and $42)			2,219				2,295
Other receivables (less allowance for doubtful accounts of $4 and $3)			349				212
Inventories:
Materials and supplies			1,167				1,105
Fossil fuel			320				349
Gas stored			144				96
Margin deposit assets			678				19
Prepayments			328				309
Regulatory assets			1,492				699
Other			264				148
Current assets held for sale(1)			25				1,482
Total current assets			7,269				6,886
Investments
Nuclear decommissioning trust funds			7,950				6,900
Investment in equity method affiliates			2,932				2,934
Other			394				404
Total investments			11,276				10,238
Property, Plant and Equipment
Property, plant and equipment			86,503				82,959
Accumulated depreciation, depletion and amortization			(26,729	)			(25,111	)
Total property, plant and equipment, net			59,774				57,848
Deferred Charges and Other Assets
Goodwill			7,405				7,381
Pension and other postretirement benefit assets			2,310				1,704
Intangible assets, net			784				765
Regulatory assets			8,643				9,133
Other			2,129				1,950
Total deferred charges and other assets			21,271				20,933
Total assets		$	99,590			$	95,905

(1)	See Note 9 for amounts attributable to related parties.

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

At December 31,		2021				2020
(millions)
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
Current Liabilities
Securities due within one year		$	841			$	1,937
Supplemental 364-Day credit facility borrowings			—				225
Short-term debt			2,314				895
Accounts payable			1,197				944
Accrued interest, payroll and taxes			1,169				1,133
Regulatory liabilities			986				809
Liability to Atlantic Coast Pipeline			113				1,052
Q-Pipe Transaction deposit			—				1,290
Other(1)			2,053				1,933
Current liabilities held for sale			—				625
Total current liabilities			8,673				10,843
Long-Term Debt
Long-term debt			35,190				30,915
Junior subordinated notes			1,386				2,161
Other			850				881
Total long-term debt			37,426				33,957
Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits			6,658				5,953
Regulatory liabilities			10,713				10,187
Asset retirement obligations			5,275				5,404
Pension and other postretirement benefit liability			442				1,706
Other(1)			1,485				1,394
Total deferred credits and other liabilities			24,573				24,644
Total liabilities			70,672				69,444
Commitments and Contingencies (see Note 23)
Mezzanine Equity
Preferred stock (See Note 19)			1,610				—
Shareholders' Equity
Preferred stock (See Note 19)			1,783				2,387
Common stock – no par(2)			21,610				21,258
Retained earnings			5,373				4,189
Accumulated other comprehensive loss			(1,458	)			(1,717	)
Shareholders' equity			27,308				26,117
Noncontrolling interests			—				344
Total shareholders' equity			27,308				26,461
Total liabilities, mezzanine equity and shareholders' equity		$	99,590			$	95,905

(1) See Note 9 for amounts attributable to related parties.

(2) 1.8 billion shares authorized; 810 million shares and 806 million shares outstanding at December 31, 2021 and 2020, respectively.

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

Dominion Energy, Inc.

Consolidated Statements of Equity

		Preferred Stock								Common Stock								Dominion Energy Shareholders
		Shares				Amount				Shares				Amount				Retained Earnings				AOCI				Total Shareholders' Equity				Noncontrolling Interests				Total Equity
(millions except per share amounts)
December 31, 2018											681			$	12,588			$	9,219			$	(1,700	)		$	20,107			$	1,941			$	22,048
Net income including noncontrolling interests																			1,358								1,358				18				1,376
Issuance of stock			2				2,387				39				3,014												5,401								5,401
Stock purchase contract component of 2019 Equity Units															(264	)											(264	)							(264	)
Acquisition of SCANA											96				6,818												6,818								6,818
Acquisition of public interest in Dominion Energy Midstream											22				1,181												1,181				(1,221	)			(40	)
Sale of interest in Cove Point															476												476				1,386				1,862
Stock awards (net of change in unearned compensation)															24												24								24
Preferred stock dividends (See Note 19)																			(17	)							(17	)							(17	)
Common dividends ($3.67 per common share) and distributions																			(2,983	)							(2,983	)			(85	)			(3,068	)
Other comprehensive loss, net of tax																							(93	)			(93	)							(93	)
Other															(13	)			(1	)							(14	)							(14	)
December 31, 2019			2			$	2,387				838			$	23,824			$	7,576			$	(1,793	)		$	31,994			$	2,039			$	34,033
Cumulative-effect of changes in accounting principles																			(48	)							(48	)							(48	)
Net loss including noncontrolling interests																			(401	)							(401	)			(149	)			(550	)
Issuance of stock											7				481												481								481
Stock repurchases											(39	)			(3,080	)											(3,080	)							(3,080	)
Stock awards (net of change in unearned compensation)															29												29								29
Preferred stock dividends (See Note 19)																			(65	)							(65	)							(65	)
Common dividends ($3.45 per common share) and distributions																			(2,873	)							(2,873	)			(164	)			(3,037	)
Other comprehensive income, net of tax																							76				76								76
GT&S Transaction closing															17												17				(1,384	)			(1,367	)
Other															(13	)											(13	)			2				(11	)
December 31, 2020			2			$	2,387				806			$	21,258			$	4,189			$	(1,717	)		$	26,117			$	344			$	26,461
Net income including noncontrolling interests																			3,288								3,288				26				3,314
Issuance of stock			1				992				4				340												1,332								1,332
Stock awards (net of change in unearned compensation)															28												28								28
Preferred stock dividends (See Note 19)																			(68	)							(68	)							(68	)
Common dividends ($2.52 per common share) and distributions																			(2,036	)							(2,036	)			(47	)			(2,083	)
Other comprehensive income, net of tax																							259				259								259
Reclassification of Series A Preferred Stock to Mezzanine Equity			(1	)			(1,596	)							(14	)											(1,610	)							(1,610	)
Sale of non-wholly-owned nonregulated solar facilities																											—				(323	)			(323	)
Other															(2	)											(2	)							(2	)
December 31, 2021			2			$	1,783				810			$	21,610			$	5,373			$	(1,458	)		$	27,308			$	—			$	27,308

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

Dominion Energy, Inc.

Consolidated Statements of Cash Flows

Year Ended December 31,		2021				2020				2019
(millions)
Operating Activities
Net income (loss) including noncontrolling interests		$	3,314			$	(550	)		$	1,376
Adjustments to reconcile net income (loss) including noncontrolling interests to net cash provided by operating activities:
Depreciation, depletion and amortization (including nuclear fuel)			2,768				2,836				2,977
Deferred income taxes and investment tax credits			487				(324	)			216
Gain from sale of Q-Pipe Group and GT&S Transaction			(685	)			(134	)			—
Contribution to pension plan			—				(250	)			(21	)
Net loss on sale of interest in renewable generation facilities			211				—				—
Provision for refunds and rate credits to electric utility customers			356				—				800
Impairment of assets and other charges			182				2,345				1,333
Loss from investment in Atlantic Coast Pipeline			20				2,405				—
Charges related to a voluntary retirement program			—				—				320
Gains on sales of assets and equity method investments			(97	)			(63	)			(167	)
Net (gains) losses on nuclear decommissioning trusts funds and other investments			(639	)			(412	)			(626	)
Charge (revision) for future ash pond and landfill closure costs			—				11				(113	)
Other adjustments			294				213				29
Changes in:
Accounts receivable			(183	)			(292	)			(105	)
Inventories			(74	)			39				(90	)
Deferred fuel and purchased gas costs, net			(939	)			212				195
Prepayments			(20	)			7				(225	)
Accounts payable			156				35				(225	)
Accrued interest, payroll and taxes			41				(53	)			(78	)
Customer deposits			(24	)			(13	)			(101	)
Margin deposit assets and liabilities			(664	)			26				60
Net realized and unrealized changes related to derivative activities			435				(36	)			43
Pension and other postretirement benefits			(314	)			(319	)			(148	)
Other operating assets and liabilities			(588	)			(456	)			(246	)
Net cash provided by operating activities			4,037				5,227				5,204
Investing Activities
Plant construction and other property additions (including nuclear fuel)			(5,960	)			(6,020	)			(4,980	)
Cash and restricted cash acquired in the SCANA Combination			—				—				389
Acquisition of solar development projects			(101	)			(311	)			(341	)
Proceeds from GT&S Transaction and sale of Q-Pipe Group			1,522				3,687				—
Repayment of Q-Pipe Transaction deposit			(1,265	)			—				—
Proceeds from sale of non-wholly-owned nonregulated solar facilities			495				—				—
Proceeds from sales of securities			3,985				4,278				1,712
Purchases of securities			(3,939	)			(4,379	)			(1,749	)
Proceeds from sales of assets and equity method investments			159				143				447
Contributions to equity method affiliates			(1,021	)			(148	)			(209	)
Acquisition of equity method investments			—				(178	)			—
Other			(122	)			12				109
Net cash used in investing activities			(6,247	)			(2,916	)			(4,622	)
Financing Activities
Issuance (repayment) of short-term debt, net			1,419				(16	)			404
Issuance of short-term notes			1,265				1,125				3,000
Repayment and repurchase of short-term notes			(1,265	)			(1,125	)			(3,000	)
Supplemental 364-day credit facility borrowings			—				225				—
Supplemental 364-day credit facility repayments			(225	)			—				—
Credit facility borrowings (repayments)			—				—				(113	)
Issuance and remarketing of long-term debt			6,400				6,577				4,374
Repayment and repurchase of long-term debt (including redemption premiums)			(3,750	)			(2,879	)			(9,116	)
Proceeds from sale of interest in Cove Point			—				—				2,078
Issuance of 2019 Equity Units			—				—				1,582
Supplemental credit facility borrowings			900				—				—
Supplemental credit facility repayments			(900	)			—				—
Issuance of preferred stock			742				—				791
Issuance of common stock			192				159				2,515
Repurchase of common stock			—				(3,080	)			—
Common dividend payments			(2,036	)			(2,873	)			(2,983	)
Other			(371	)			(446	)			(236	)
Net cash provided by (used in) financing activities			2,371				(2,333	)			(704	)
Increase (decrease) in cash, restricted cash and equivalents			161				(22	)			(122	)
Cash, restricted cash and equivalents at beginning of period			247				269				391
Cash, restricted cash and equivalents at end of period		$	408			$	247			$	269

See Note 2 for disclosure of supplemental cash flow information.

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholder of Virginia Electric and Power Company

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Virginia Electric and Power Company (a wholly-owned subsidiary of Dominion Energy, Inc.) and subsidiaries ("Virginia Power") at December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, common shareholder's equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Virginia Power at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of Virginia Power's management. Our responsibility is to express an opinion on Virginia Power's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to Virginia Power in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Virginia Power is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of Virginia Power’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

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) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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

Critical Audit Matter Description

Virginia Power is subject to utility rate regulation by certain state public utility commissions and the Federal Energy Regulatory Commission (“FERC”) (collectively, the “relevant commissions”), which have jurisdiction with respect to the rates of electric utility companies in the territories Virginia Power serves. Management has determined Virginia Power meets the requirements under accounting principles generally accepted in the United States of America to apply the specialized rules to account for the effects of cost-based rate regulation. 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; depreciation and amortization expense; and impairment of assets and other charges, collectively, the “financial statement impacts of rate regulation”.

Revenue provided by Virginia Power’s electric transmission, distribution and generation operations is based on rates approved by the relevant commissions. Further, Virginia Power’s retail base rates, terms and conditions for generation and distribution services to

customers in Virginia are reviewed by the Virginia State Corporation Commission (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 and determination of Virginia Power’s authorized ROE prospectively. Under certain circumstances, Virginia Power may be required to credit a portion of its earnings to customers.

When it is probable that regulators will permit the recovery of current costs through future rates charged to customers, these costs that otherwise would be expensed by nonregulated companies are deferred as regulatory assets. Likewise, regulatory liabilities are recognized when it is probable that regulators will require customer refunds or other benefits through future rates or when revenue is collected from customers for expenditures that have yet to be incurred. Virginia Power evaluates whether recovery of its regulatory assets through future rates is probable as well as whether a regulatory liability due to customers is probable and makes various assumptions in its analyses. These analyses are generally based on orders issued by regulatory commissions, legislation and judicial actions; past experience; discussions with applicable regulatory authorities and legal counsel; forecasted earnings; and considerations around the likelihood of impacts from events such as unusual weather conditions, extreme weather events, and other natural disasters, and unplanned outages of facilities.

We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about the financial statement impacts of rate regulation. Management judgments include assessing the likelihood of (1) recovery of its regulatory assets through future rates and (2) whether a regulatory liability is due to customers. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the Commission, auditing these judgments required specialized knowledge of the accounting for rate regulation and the rate setting process due its inherent complexities.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the assessment of whether recovery of regulatory assets through future rates or a regulatory liability due to customers is probable included the following, among others:

	•	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 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 Virginia Power’s disclosures related to the financial statement impacts of rate regulation.

	•	We read and evaluated orders issued by the relevant commissions, as well as relevant regulatory statutes, interpretations, procedural memorandums, filings made by interveners, existing laws and other publicly available information to assess whether this external information was properly considered by management in concluding upon the 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 precedents established by the relevant commissions’ previous orders and Virginia Power’s past experience with relevant commissions.

	•	For regulatory matters in process, we inspected associated documents and testimony filed with the relevant commissions for any evidence that might contradict management’s assertions.

	•	We read and analyzed the minutes of the Board of Directors of Dominion Energy, Inc. and the Board of Directors of Virginia Power, for discussions of changes in legal, regulatory, or business factors which could impact management’s conclusions with respect to the financial statement impacts of rate regulation.

/s/ Deloitte & Touche LLP

Richmond, Virginia

February 24, 2022

We have served as Virginia Power's auditor since 1988.

Virginia Electric and Power Company

Consolidated Statements of Income

Year Ended December 31,		2021				2020				2019
(millions)
Operating Revenue(1)		$	7,470			$	7,763			$	8,108
Operating Expenses
Electric fuel and other energy-related purchases(1)			1,735				1,636				2,178
Purchased (excess) capacity			24				(17	)			40
Other operations and maintenance:
Affiliated suppliers			333				314				367
Other			1,460				1,472				1,376
Depreciation and amortization			1,364				1,252				1,223
Other taxes			326				327				328
Impairment of assets and other charges (benefits)			(269	)			1,093				757
Total operating expenses			4,973				6,077				6,269
Income from operations			2,497				1,686				1,839
Other income			146				80				98
Interest and related charges(1)			534				516				524
Income before income tax expense			2,109				1,250				1,413
Income tax expense			397				229				264
Net Income		$	1,712			$	1,021			$	1,149

(1)	See Note 25 for amounts attributable to affiliates.

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

Virginia Electric and Power Company

Consolidated Statements of Comprehensive Income

Year Ended December 31,		2021				2020				2019
(millions)
Net income		$	1,712			$	1,021			$	1,149
Other comprehensive income (loss), net of taxes:
Net deferred gains (losses) on derivatives-hedging activities, net of $(4), $9 and $8 tax			13				(28	)			(22	)
Changes in unrealized net gains (losses) on nuclear decommissioning trust funds, net of $—, $(3) and $(2) tax			(2	)			6				5
Amounts reclassified to net income:
Net derivative (gains) losses-hedging activities, net of $(1), $— and $— tax			2				2				1
Net realized (gains) losses on nuclear decommissioning trust funds, net of $1, $1 and $1 tax			(2	)			(3	)			(1	)
Other comprehensive income (loss)			11				(23	)			(17	)
Comprehensive income		$	1,723			$	998			$	1,132

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

Virginia Electric and Power Company

Consolidated Balance Sheets

		2021				2020
(millions)
ASSETS
Current Assets
Cash and cash equivalents		$	26			$	35
Customer receivables (less allowance for doubtful accounts of $28 and $23)			1,172				1,315
Other receivables (less allowance for doubtful accounts of $2 at both dates)			112				91
Affiliated receivables			37				5
Inventories (average cost method):
Materials and supplies			610				581
Fossil fuel			261				281
Margin deposit assets			167				1
Prepayments			37				32
Regulatory assets			850				295
Other(1)			78				26
Total current assets			3,350				2,662
Investments
Nuclear decommissioning trust funds			3,734				3,197
Other			3				3
Total investments			3,737				3,200
Property, Plant and Equipment
Property, plant and equipment			49,890				46,736
Accumulated depreciation and amortization			(15,234	)			(14,167	)
Total property, plant and equipment, net			34,656				32,569
Deferred Charges and Other Assets
Pension and other postretirement benefit assets(1)			431				354
Intangible assets, net			395				334
Regulatory assets			4,130				3,509
Other(1)			1,233				1,026
Total deferred charges and other assets			6,189				5,223
Total assets		$	47,932			$	43,654

(1)	See Note 25 for amounts attributable to affiliates.

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

		2021				2020
(millions)
LIABILITIES AND COMMON SHAREHOLDER’S EQUITY
Current Liabilities
Securities due within one year		$	313			$	8
Short-term debt			745				45
Accounts payable			402				332
Payables to affiliates			121				266
Affiliated current borrowings			699				380
Accrued interest, payroll and taxes			274				253
Asset retirement obligations			191				166
Regulatory liabilities			647				425
Derivative liabilities (1)			134				390
Other current liabilities			567				562
Total current liabilities			4,093				2,827
Long-Term Debt
Long-term debt			13,453				13,207
Other			503				480
Total long-term debt			13,956				13,687
Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits			3,183				2,779
Asset retirement obligations			3,732				3,654
Regulatory liabilities			5,740				5,338
Other (1)			1,248				812
Total deferred credits and other liabilities			13,903				12,583
Total liabilities			31,952				29,097
Commitments and Contingencies (see Note 23)
Common Shareholder’s Equity
Common stock – no par(2)			5,738				5,738
Other paid-in capital			1,113				1,113
Retained earnings			9,170				7,758
Accumulated other comprehensive loss			(41	)			(52	)
Total common shareholder’s equity			15,980				14,557
Total liabilities and shareholder’s equity		$	47,932			$	43,654

(1)	See Note 25 for amounts attributable to affiliates.

(2)	500,000 shares authorized; 274,723 shares outstanding at December 31, 2021 and 2020.

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

Virginia Electric and Power Company

Consolidated Statements of Common Shareholder’s Equity

		Common Stock
		Shares				Amount						Other Paid-In Capital						Retained Earnings						AOCI						Total
(millions, except for shares)		(thousands)
December 31, 2018			275			$	5,738					$	1,113					$	6,208					$	(12	)				$	13,047
Net income																			1,149												1,149
Dividends																			(190	)											(190	)
Other comprehensive loss, net of tax																									(17	)					(17	)
December 31, 2019			275				5,738						1,113						7,167						(29	)					13,989
Net income																			1,021												1,021
Dividends																			(430	)											(430	)
Other comprehensive loss, net of tax																									(23	)					(23	)
December 31, 2020			275				5,738						1,113						7,758						(52	)					14,557
Net income																			1,712												1,712
Dividends																			(300	)											(300	)
Other comprehensive income, net of tax																									11						11
December 31, 2021			275			$	5,738					$	1,113					$	9,170					$	(41	)				$	15,980

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

Virginia Electric and Power Company

Consolidated Statements of Cash Flows

Year Ended December 31,		2021						2020						2019
(millions)
Operating Activities
Net income		$	1,712					$	1,021					$	1,149
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including nuclear fuel)			1,521						1,421						1,392
Deferred income taxes and investment tax credits			343						(206	)					(80	)
Charge (revision) for future ash pond and landfill closure costs			—						11						(113	)
Impairment of assets and other charges			(269	)					1,079						624
Charges related to a voluntary retirement program			—						—						116
Provision for refunds to customers			356						—						—
Other adjustments			19						(61	)					(63	)
Changes in:
Accounts receivable			(112	)					(266	)					(219	)
Affiliated receivables and payables			(175	)					78						75
Inventories			(10	)					10						(56	)
Prepayments			(4	)					(5	)					1
Deferred fuel expenses, net			(652	)					131						243
Accounts payable			19						6						(31	)
Accrued interest, payroll and taxes			21						(4	)					5
Margin deposit assets and liabilities			(166	)					(1	)					—
Net realized and unrealized changes related to derivative activities			—						(6	)					21
Other operating assets and liabilities			(106	)					(308	)					(280	)
Net cash provided by operating activities			2,497						2,900						2,784
Investing Activities
Plant construction and other property additions			(3,521	)					(3,138	)					(2,642	)
Purchases of nuclear fuel			(160	)					(199	)					(157	)
Acquisition of solar development projects			(75	)					(35	)					(182	)
Proceeds from sales of securities			1,791						884						858
Purchases of securities			(1,789	)					(936	)					(905	)
Other			—						21						(37	)
Net cash used in investing activities			(3,754	)					(3,403	)					(3,065	)
Financing Activities
Issuance (repayment) of short-term debt, net			700						(198	)					(71	)
Issuance (repayment) of affiliated current borrowings, net			319						273						(117	)
Issuance and remarketing of long-term debt			1,000						1,327						1,248
Repayment and repurchase of long-term debt			(450	)					(427	)					(591	)
Common dividend payments to parent			(300	)					(430	)					(190	)
Other			(21	)					(31	)					(12	)
Net cash provided by financing activities			1,248						514						267
Increase (decrease) in cash, restricted cash and equivalents			(9	)					11						(14	)
Cash, restricted cash and equivalents at beginning of year			35						24						38
Cash, restricted cash and equivalents at end of year		$	26					$	35					$	24

See Note 2 for disclosure of supplemental cash flow information.

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

Combined Notes to Consolidated Financial Statements

NOTE 1. NATURE OF OPERATIONS

Dominion Energy, headquartered in Richmond, Virginia, is one of the nation’s largest producers and distributors of energy. Dominion Energy’s operations are conducted through various subsidiaries, including Virginia Power. Dominion Energy’s operations also include DESC, regulated gas distribution operations primarily in the eastern and Rocky Mountain regions of the U.S., nonregulated electric generation and, following the completion of the GT&S Transaction in November 2020, a noncontrolling interest in Cove Point. See Note 3 for a description of the sale of substantially all of Dominion Energy’s gas transmission and storage operations through the GT&S Transaction completed in November 2020 and the sale of the Q-Pipe Group completed in December 2021.

Dominion Energy manages its daily operations through four primary operating segments: Dominion Energy Virginia, Gas Distribution, Dominion Energy South Carolina and Contracted Assets. Dominion Energy also reports a Corporate and Other segment, which includes its corporate, service company and other functions (including unallocated debt) as well as Dominion Energy’s noncontrolling interest in Wrangler. Corporate and Other includes specific items attributable to Dominion Energy’s operating segments that are not included in profit measures evaluated by executive management in assessing the operating segments’ performance or in allocating resources. In addition, Corporate and Other includes the net impact of discontinued operations consisting of Dominion Energy’s gas transmission and storage operations as discussed in Note 3 and its equity investment in Atlantic Coast Pipeline as discussed in Note 9.

Virginia Power is a regulated public utility that generates, transmits and distributes electricity for sale in Virginia and northeastern North Carolina. Virginia Power is a member of PJM, an RTO, and its electric transmission facilities are integrated into the PJM wholesale electricity markets. All of Virginia Power’s stock is owned by Dominion Energy.

Virginia Power manages its daily operations through one primary operating segment: Dominion Energy Virginia. It also reports a Corporate and Other segment that primarily includes specific items attributable to its operating segment that are not included in profit measures evaluated by executive management in assessing the segment’s performance or in allocating resources.

See Note 26 for further discussion of the Companies’ operating segments.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

General

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

The Companies’ Consolidated Financial Statements include, after eliminating intercompany transactions and balances, their accounts, those of their respective majority-owned subsidiaries and non-wholly-owned entities in which they have a controlling financial interest. For certain partnership structures, income is allocated based on the liquidation value of the underlying contractual arrangements. Clearway’s ownership interest in Four Brothers and Three Cedars (through December 2021), Terra Nova Renewable Partners’ 33% interest in certain Dominion Energy nonregulated solar projects (through December 2021), Brookfield’s 25% interest in Cove Point (effective December 2019 until November 2020) and the non-Dominion Energy held interest in Dominion Energy Midstream (through January 2019) are reflected as noncontrolling interest in Dominion Energy’s Consolidated Financial Statements.

The Companies report certain contracts, instruments and investments at fair value. See Note 6 for further information on fair value measurements.

The Companies consider acquisitions or dispositions in which substantially all of the fair value of the gross assets acquired or disposed of is concentrated into a single identifiable asset or group of similar identifiable assets to be an acquisition or a disposition of an asset, rather than a business. See Notes 3 and 10 for further information on such transactions.

Dominion Energy maintains pension and other postretirement benefit plans and Virginia Power participates in certain of these plans. See Note 22 for further information on these plans.

Certain amounts in the Companies’ 2020 and 2019 Consolidated Financial Statements and Notes have been reclassified to conform to the 2021 presentation for comparative purposes; however, such reclassifications did not affect the Companies’ net income, total assets, liabilities, equity or cash flows. Effective in the second quarter of 2021, the Companies updated their Statements of Cash Flows to present net charges for allowance for credit risk and write-offs of accounts receivables within other adjustments to reconcile net income to net cash provided by operating activities from the previous presentation within changes in accounts receivable. All prior period information has been conformed to this presentation, which does not result in a change to net cash provided by operating activities.

Amounts disclosed for Dominion Energy are inclusive of Virginia Power, where applicable.

Operating Revenue

Operating revenue is recorded on the basis of services rendered, commodities delivered, or contracts settled and includes amounts yet to be billed to customers. The Companies collect sales, consumption and consumer utility taxes; however, these amounts are excluded from revenue. Dominion Energy’s customer receivables at December 31, 2021 and 2020 included $779 million and $1.1 billion, respectively, of accrued unbilled revenue based on estimated amounts of electricity and natural gas delivered but not yet billed to its utility customers. Virginia Power’s customer receivables at December 31, 2021 and 2020 included $398 million and $740 million, respectively, of accrued unbilled revenue based on estimated amounts of electricity delivered but not yet billed to its customers. See Note 25 for amounts attributable to related parties.

The primary types of sales and service activities reported as operating revenue for Dominion Energy are as follows:

Revenue from Contracts with Customers

	•	Regulated electric sales consist primarily of state-regulated retail electric sales, and federally-regulated wholesale electric sales and electric transmission services;

	•	Nonregulated electric sales consist primarily of sales of electricity at market-based rates and contracted fixed rates and associated hedging activity and sales to Virginia Power customers from non-jurisdictional solar generation facilities;

	•	Regulated gas sales consist primarily of state-regulated natural gas sales and related distribution services;

	•	Nonregulated gas sales consist primarily of sales of natural gas production at market-based rates and contracted fixed prices, sales of gas purchased from third parties and associated hedging activity;

	•	Regulated gas transportation and storage sales consist of state-regulated gas distribution charges to retail distribution service customers opting for alternate suppliers, sales of gathering services and sales of transportation services to off-system customers;

	•	Other regulated revenue consists primarily of miscellaneous service revenue from electric and gas distribution operations and sales of excess electric capacity and other commodities; and

	•	Other nonregulated revenue consists primarily of sales of commodities related to nonregulated extraction activities and other miscellaneous products. Other nonregulated revenue also includes sales of energy-related products and services from Dominion Energy’s retail energy marketing operations (through December 2021), service concession arrangements and revenue associated with services provided to entities presented in discontinued operations under transition services agreements.

Other Revenue

	•	Other revenue consists primarily of alternative revenue programs, gains and losses from derivative instruments not subject to hedge accounting and lease revenues.

The primary types of sales and service activities reported as operating revenue for Virginia Power are as follows:

Revenue from Contracts with Customers

	•	Regulated electric sales consist primarily of state-regulated retail electric sales and federally-regulated wholesale electric sales and electric transmission services;

	•	Nonregulated electric sales consists of sales to customers from non-jurisdictional solar generation facilities;

	•	Other regulated revenue consists primarily of sales of excess capacity and other commodities and miscellaneous service revenue from electric distribution operations; and

	•	Other nonregulated revenue consists primarily of revenue from renting space on certain electric transmission poles and distribution towers and service concession arrangements.

Other Revenue

	•	Other revenue consists primarily of alternative revenue programs, gains and losses from derivative instruments not subject to hedge accounting and lease revenues.

The Companies record refunds to customers as required by state commissions as a reduction to regulated electric sales or regulated gas sales, as applicable. The Companies’ revenue accounted for under the alternative revenue program guidance primarily consists of the equity return for under-recovery of certain riders. Alternative revenue programs compensate the Companies for certain projects and initiatives. Revenues arising from these programs are presented separately from revenue arising from contracts with customers in the categories above.

Revenues from electric and gas sales are recognized over time, as the customers of the Companies consume gas and electricity as it is delivered. Fixed fees are recognized ratably over the life of the contract as the stand-ready performance obligation is satisfied, while variable usage fees are recognized when Dominion Energy has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the performance obligation completed to date. Sales of products and services typically transfer control and are recognized as revenue upon delivery of the product or service. The customer is able to direct the use of, and obtain substantially all of the benefits from, the product at the time the product is delivered. The contract with the customer states the final terms of the sale, including the description, quantity and price of each product or service purchased. Payment for most sales and services varies by contract type but is typically due within a month of billing.

Operating revenue for the gas transmission and storage operations sold to BHE as part of the GT&S Transaction and sold to Southwest Gas as part of the Q-Pipe Group sale primarily consisted of FERC-regulated sales of transmission and storage services, LNG terminalling services, sales of extracted products and associated hedging activities and NGL activities, including gathering and processing and sales of production and condensate as well as services performed for Atlantic Coast Pipeline. This revenue is included in discontinued operations in Dominion Energy’s Consolidated Statements of Income.

Transportation and storage contracts associated with the operations sold to BHE as part of the GT&S Transaction and sold to Southwest Gas as part of the Q-Pipe Group sale were primarily stand-ready service contracts that include fixed reservation and variable usage fees. LNG terminalling services, included in discontinued operations, are also stand-ready service contracts, primarily consisting of fixed fees, offset by service credits associated with the start-up phase of the Liquefaction Facility. NGLs received during natural gas processing are recorded in discontinued operations at fair value as service revenue recognized over time, and revenue continued to be recognized from the subsequent sale of the NGLs to customers upon delivery.

Credit Risk

Credit risk is the risk of financial loss if counterparties fail to perform their contractual obligations. In order to minimize overall credit risk, credit policies are maintained, including the evaluation of counterparty financial condition, collateral requirements and the use of standardized agreements that facilitate the netting of cash flows associated with a single counterparty. In addition, counterparties may make available collateral, including letters of credit or cash held as margin deposits, as a result of exceeding agreed-upon credit limits, or may be required to prepay the transaction.

The Companies maintain a provision for credit losses based on factors surrounding the credit risk of their customers, historical trends and other information. Effective January 2020, expected credit losses are estimated and recorded based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of financial assets held at amortized cost as well as expected credit losses on commitments with respect to financial guarantees.

Electric Fuel, Purchased Energy and Purchased Gas-Deferred Costs

Where permitted by regulatory authorities, the differences between the Companies’ actual electric fuel and purchased energy expenses and Dominion Energy’s purchased gas expenses and the related levels of recovery for these expenses in current rates are deferred and matched against recoveries in future periods. The deferral of costs in excess of current period fuel rate recovery is recognized as a regulatory asset, while rate recovery in excess of current period fuel expenses is recognized as a regulatory liability.

Of the cost of fuel used in electric generation and energy purchases to serve Virginia utility customers, at December 31, 2021, approximately 86% is subject to Virginia Power’s deferred fuel accounting, while substantially all of the remaining amount is subject to recovery through similar mechanisms. Of the cost of fuel used in electric generation and energy purchases to serve South Carolina utility customers, at December 31, 2021, approximately 96% is subject to DESC’s deferred fuel accounting.

Virtually all of East Ohio, Questar Gas, Hope, DESC and PSNC’s natural gas purchases are either subject to deferral accounting or are recovered from the customer in the same accounting period as the sale.

Income Taxes

A consolidated federal income tax return is filed for Dominion Energy and its subsidiaries, including Virginia Power. In addition, where applicable, combined income tax returns for Dominion Energy and its subsidiaries are filed in various states; otherwise, separate state income tax returns are filed.

Virginia Power participates in intercompany tax sharing agreements with Dominion Energy and its subsidiaries. Current income taxes are based on taxable income or loss and credits determined on a separate company basis.

Under the agreements, if a subsidiary incurs a tax loss or earns a credit, recognition of current income tax benefits is limited to refunds of prior year taxes obtained by the carryback of the net operating loss or credit or to the extent the tax loss or credit is absorbed by the taxable income of other Dominion Energy consolidated group members. Otherwise, the net operating loss or credit is carried forward and is recognized as a deferred tax asset until realized.

Accounting for income taxes involves an asset and liability approach. Deferred income tax assets and liabilities are provided, representing future effects on income taxes for temporary differences between the bases of assets and liabilities for financial reporting and tax purposes. Accordingly, deferred taxes are recognized for the future consequences of different treatments used for the reporting of transactions in financial accounting and income tax returns. The Companies establish a valuation allowance when it is more-likely-than-not that all, or a portion, of a deferred tax asset will not be realized. Where the treatment of temporary differences is different for rate-regulated operations, a regulatory asset is recognized if it is probable that future revenues will be provided for the payment of deferred tax liabilities.

The Companies recognize positions taken, or expected to be taken, in income tax returns that are more-likely-than-not to be realized, assuming that the position will be examined by tax authorities with full knowledge of all relevant information.

If it is not more-likely-than-not that a tax position, or some portion thereof, will be sustained, the related tax benefits are not recognized in the financial statements. Unrecognized tax benefits may result in an increase in income taxes payable, a reduction of income tax refunds receivable or changes in deferred taxes. Also, when uncertainty about the deductibility of an amount is limited to the timing of such deductibility, the increase in income taxes payable (or reduction in tax refunds receivable) is accompanied by a decrease in deferred tax liabilities. Except when such amounts are presented net with amounts receivable from or amounts prepaid to tax authorities, noncurrent income taxes payable related to unrecognized tax benefits are classified in other deferred credits and other liabilities on the Consolidated Balance Sheets and current payables are included in accrued interest, payroll and taxes on the Consolidated Balance Sheets.

The Companies recognize interest on underpayments and overpayments of income taxes in interest expense and other income, respectively. Penalties are also recognized in other income.

In 2021, Dominion Energy reflected a $21 million benefit from the reversal of interest expense and a $7 million benefit from the reversal of penalty expense on uncertain tax positions that were effectively settled.

At December 31, 2021, Virginia Power had an income tax-related affiliated receivable of $35 million, comprised of $33 million of federal income taxes and $2 million of state income taxes receivable from Dominion Energy. These affiliated balances are expected to be received from Dominion Energy.

At December 31, 2020, Virginia Power had an income tax-related affiliated payable of $19 million, comprised of $17 million of federal income taxes and $2 million of state income taxes due to Dominion Energy. Virginia Power’s net affiliated balances were paid to Dominion Energy.

Investment tax credits are recognized by nonregulated operations in the year qualifying property is placed in service. For regulated operations, investment tax credits are deferred and amortized over the service lives of the properties giving rise to the credits. Production tax credits are recognized as energy is generated and sold.

Cash, Restricted Cash and Equivalents

Cash, restricted cash and equivalents include cash on hand, cash in banks and temporary investments purchased with an original maturity of three months or less.

Current banking arrangements generally do not require checks to be funded until they are presented for payment. The following table illustrates the checks outstanding but not yet presented for payment and recorded in accounts payable for the Companies:

At December 31,		2021				2020
(millions)
Dominion Energy		$	70			$	50
Virginia Power			15				30

Restricted Cash and Equivalents

The Companies hold restricted cash and equivalent balances that primarily consist of amounts held for litigation settlements, customer deposits, federal assistance funds and future debt payments on SBL Holdco and Dominion Solar Projects III, Inc.’s term loan agreements (through December 2021), on DECP Holdings’ term loan agreement and on Eagle Solar’s senior note agreement.

The following table provides a reconciliation of the total cash, restricted cash and equivalents reported within the Companies’ Consolidated Balance Sheets to the corresponding amounts reported within the Companies’ Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019:

		Cash, Restricted Cash and Equivalents at End/Beginning of Year
		December 31, 2021				December 31, 2020				December 31, 2019				December 31, 2018
(millions)
Dominion Energy
Cash and cash equivalents(1)		$	283			$	179			$	166			$	268
Restricted cash and equivalents(2)(3)			125				68				103				123
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows		$	408			$	247			$	269			$	391
Virginia Power
Cash and cash equivalents		$	26			$	35			$	17			$	29
Restricted cash and equivalents(3)			—				—				7				9
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows		$	26			$	35			$	24			$	38

	(1)	At December 31, 2020, December 31, 2019 and December 31, 2018, Dominion Energy had $7 million, $31 million and $110 million of cash and cash equivalents included in current assets held for sale, respectively. No amounts were included in current assets held for sale at December 31, 2021.

	(2)	At December 31, 2020, December 31, 2019 and December 31, 2018, Dominion Energy had $3 million, $12 million and $89 million of restricted cash included in current assets held for sale, respectively. No amounts were included in current assets held for sale at December 31, 2021.

	(3)	Restricted cash and equivalent balances are presented within other current assets in the Companies’ Consolidated Balance Sheets.

Supplemental Cash Flow Information

The following table provides supplemental disclosure of cash flow information related to Dominion Energy:

Year Ended December 31,		2021				2020				2019
Cash paid during the year for:
Interest and related charges, excluding capitalized amounts		$	1,340			$	1,519			$	1,643
Income taxes			160				292				106
Significant noncash investing and financing activities:(1)(2)(3)(4)(5)
Accrued capital expenditures			637				485				555
Leases(6)			96				173				157

	(1)	See the New Accounting Standards section below for noncash investing and financing activities related to the adoption of a new accounting standard for leasing arrangements.

	(2)	See Note 3 for noncash investing and financing activities related to the SCANA Combination.

	(3)	See Note 5 for noncash activities related to the sale of a noncontrolling interest in Cove Point.

	(4)	See Note 9 for noncash investing activities related to the acquisition of a noncontrolling interest in Wrangler.

	(5)	See Notes 18,19 and 20 for noncash financing activities related to the acquisition of the public interest in Dominion Energy Midstream, the remarketing of RSNs, the issuance of stock purchase contracts associated with the 2019 Equity Units, the contribution of stock to Dominion Energy’s qualified defined benefit pension plan, derivative restructuring and the issuance of common stock associated with the settlement of litigation. See Note 23 for non-cash investing activities related to property, plant and equipment conveyed to satisfy litigation.

	(6)	Includes $47 million of finance leases and $49 million of operating leases entered in 2021, $46 million of finance leases and $127 million of operating leases entered in 2020 and $113 million of finance leases and $44 million of operating leases entered in 2019.

The following table provides supplemental disclosure of cash flow information related to Virginia Power:

Year Ended December 31,		2021				2020				2019
Cash paid during the year for:
Interest and related charges, excluding capitalized amounts		$	501			$	491			$	495
Income taxes			109				452				272
Significant noncash investing activities:(1)(2)
Accrued capital expenditures			363				262				292
Leases (3)			79				32				55

(1)	See the New Accounting Standards section below for noncash investing and financing activities related to the adoption of a new accounting standard for leasing arrangements.

(2)	See Note 18 for non-cash financing activities related to derivative restructuring.

(3)	Includes $37 million of finance leases and $42 million of operating leases entered in 2021, $32 million of finance leases entered in, 2020 and $20 million of finance leases and $35 million of operating leases entered in 2019.

Distributions from Equity Method Investees

Dominion Energy holds investments that are accounted for under the equity method of accounting and classifies distributions from equity method investees as either cash flows from operating activities or cash flows from investing activities in the Consolidated Statements of Cash Flows according to the nature of the distribution. Distributions received are classified on the basis of the nature of the activity of the investee that generated the distribution as either a return on investment (classified as cash flows from operating activities) or a return of an investment (classified as cash flows from investing activities) when such information is available to Dominion Energy.

Derivative Instruments

The Companies are exposed to the impact of market fluctuations in the price of electricity, natural gas and other energy-related products they market and purchase, as well as interest rate and foreign currency exchange rate risks in their business operations. The Companies use derivative instruments such as physical and financial forwards, futures, swaps, options, foreign currency transactions and FTRs to manage the commodity, interest rate and/or foreign currency exchange rate risks of their business operations.

All derivatives, except those for which an exception applies, are required to be reported in the Consolidated Balance Sheets at fair value. Derivative contracts representing unrealized gain positions and purchased options are reported as derivative assets. Derivative contracts representing unrealized losses and options sold are reported as derivative liabilities. One of the exceptions to fair value accounting, normal purchases and normal sales, may be elected when the contract satisfies certain criteria, including a requirement that physical delivery of the underlying commodity is probable. Expenses and revenues resulting from deliveries under normal purchase contracts and normal sales contracts, respectively, are included in earnings at the time of contract performance. See Note 6 for further information about fair value measurements and associated valuation methods for derivatives.

The Companies do not offset amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral against amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement. Dominion Energy had margin assets of $678 million and $19 million associated with cash collateral at December 31, 2021 and 2020, respectively. Dominion Energy had margin liabilities of $5 million associated with cash collateral at December 31, 2020 and no amounts outstanding at December 31, 2021. Virginia Power had margin assets of $167 million and $1 million associated with cash collateral at December 31, 2021 and 2020, respectively. Virginia Power had no margin liabilities associated with cash collateral at December 31, 2021 and 2020. See Note 7 for further information about derivatives.

To manage price and interest rate risk, the Companies hold derivative instruments that are not designated as hedges for accounting purposes. However, to the extent the Companies do not hold offsetting positions for such derivatives, they believe these instruments

represent economic hedges that mitigate their exposure to fluctuations in commodity prices or interest rates. All income statement activity, including amounts realized upon settlement, is presented in operating revenue, operating expenses, interest and related charges or discontinued operations based on the nature of the underlying risk.

Changes in the fair value of derivative instruments result in the recognition of regulatory assets or regulatory liabilities for jurisdictions subject to cost-based rate regulation. Realized gains or losses on the derivative instruments are generally recognized when the related transactions impact earnings.

Derivative Instruments Designated as Hedging Instruments

In accordance with accounting guidance pertaining to derivatives and hedge accounting, the Companies designate a portion of their derivative instruments as either cash flow or fair value hedges for accounting purposes. For derivative instruments that are accounted for as cash flow hedges or fair value hedges, the cash flows from the derivatives and from the related hedged items are classified in operating cash flows.

Cash Flow Hedges

A majority of the Companies’ hedge strategies represents cash flow hedges of the variable price risk primarily associated with the use of interest rate swaps to hedge their exposure to variable interest rates on long-term debt. For transactions in which the Companies are hedging the variability of cash flows, changes in the fair value of the derivatives are reported in AOCI, to the extent they are effective at offsetting changes in the hedged item, or as appropriate to regulatory assets or regulatory liabilities. Any derivative gains or losses reported in AOCI are reclassified to earnings when the forecasted item is included in earnings, or earlier, if it becomes probable that the forecasted transaction will not occur. For cash flow hedge transactions, hedge accounting is discontinued if the occurrence of the forecasted transaction is no longer probable.

Fair Value Hedges

Dominion Energy has also designated interest rate swaps as fair value hedges on certain fixed rate long-term debt to manage interest rate exposure. For fair value hedge transactions, changes in the fair value of the derivative are generally offset currently in earnings by the recognition of changes in the hedged item’s fair value. Hedge accounting is discontinued if the hedged item no longer qualifies for hedge accounting.

Property, Plant and Equipment

Property, plant and equipment is recorded at lower of original cost or fair value, if impaired. Capitalized costs include labor, materials and other direct and indirect costs such as asset retirement costs, capitalized interest and, for certain operations subject to cost-of-service rate regulation, AFUDC and overhead costs. The cost of repairs and maintenance, including minor additions and replacements, is generally charged to expense as it is incurred.

In 2021, 2020 and 2019, Dominion Energy capitalized interest costs and AFUDC to property, plant and equipment of $117 million, $103 million and $78 million, respectively. In 2021, 2020 and 2019, Virginia Power capitalized AFUDC to property, plant and equipment of $78 million, $60 million and $34 million, respectively.

Under Virginia law, certain Virginia jurisdictional projects qualify for current recovery of AFUDC through rate adjustment clauses. AFUDC on these projects is calculated and recorded as a regulatory asset and is not capitalized to property, plant and equipment. In 2021, 2020 and 2019, Virginia Power recorded $35 million, $11 million and $11 million of AFUDC related to these projects, respectively.

For property subject to cost-of-service rate regulation, including the Companies’ electric distribution, electric transmission and generation property and Dominion Energy’s natural gas distribution property, the undepreciated cost of such property, less salvage value, is generally charged to accumulated depreciation at retirement. Cost of removal collections from utility customers not representing AROs are recorded as regulatory liabilities. For property subject to cost-of-service rate regulation that will be abandoned significantly before the end of its useful life, the net carrying value is reclassified from plant-in-service when it becomes probable it will be abandoned and recorded as a regulatory asset for amounts expected to be collected through future rates.

In 2020 and 2019, the Companies had the following charges, primarily recorded in impairment of assets and other charges in the Consolidated Statements of Income (reflected in the Corporate and Other segment), related to early retirements:

	•	In March 2020, Virginia Power committed to retire certain coal- and oil-fired generating units before the end of their useful lives based on economic and other factors, including but not limited to market power prices and the VCEA. These units will

		be retired after they meet their capacity obligations to PJM in 2023. As a result, Virginia Power recorded a charge of $751 million ($559 million after-tax). This charge is considered a component of Virginia Power’s base rates deemed recovered under the GTSA, subject to review as discussed in Note 13. In addition, see Note 13 for information on the settlement of the 2021 Triennial Review. Also in 2020, Virginia Power recorded charges of $54 million ($40 million after-tax) associated with dismantling certain of these electric generation facilities.

	•	In January 2019, Virginia Power committed to a plan to retire certain automated metering reading infrastructure associated with its electric operations before the end of its estimated useful life and replace such equipment with more current AMI technology. As a result, Virginia Power recorded a charge of $160 million ($119 million after-tax). This charge is considered a component of Virginia Power’s base rates deemed recovered under the GTSA, subject to review as discussed in Note 13.

	•	In March 2019, Virginia Power committed to retire certain electric generating units before the end of their useful lives and completed the retirement of certain units at six facilities representing 1,292 MW of electric generating capacity, which had previously been placed in cold reserve. An additional unit at Possum Point power station was retired after meeting its capacity obligation to PJM in December 2020. As a result, Virginia Power recorded a charge of $346 million ($257 million after-tax). This charge is considered a component of Virginia Power’s base rates deemed recovered under the GTSA, subject to review as discussed in Note 13. In addition, see Note 13 for information on the settlement of the 2021 Triennial Review.

	•	In May 2019, Virginia Power abandoned a coal rail project at its Mt. Storm generating facility. As a result, Virginia Power recorded a charge of $62 million ($46 million after-tax).

	•	In September 2019, the Companies abandoned certain property, plant and equipment before the end of its useful life. As a result, Dominion Energy recorded a charge of $26 million ($19 million after-tax) and Virginia Power recorded a charge of $17 million ($12 million after-tax).

For property that is not subject to cost-of-service rate regulation, including nonutility property, cost of removal not associated with AROs is charged to expense as incurred. The Companies also record gains and losses upon retirement based upon the difference between the proceeds received, if any, and the property’s net book value at the retirement date.

Depreciation of property, plant and equipment is computed on the straight-line method based on projected service lives. The Companies’ average composite depreciation rates on utility property, plant and equipment are as follows:

Year Ended December 31,		2021				2020				2019
(percent)
Dominion Energy(1)
Generation			2.63				2.51				2.84
Transmission			2.47				2.48				2.50
Distribution			2.76				2.76				2.80
Storage			1.79				1.59				1.49
General and other			3.85				4.35				3.99
Virginia Power
Generation			2.69				2.52				2.94
Transmission			2.51				2.52				2.54
Distribution			3.18				3.19				3.14
General and other			5.08				5.09				4.40

(1)	Excludes rates for depreciation reported as discontinued operations.

In 2020, Virginia Power updated depreciation rates for its nuclear plants to reflect lower depreciation rates as a result of expected approval of license extensions from the NRC. For the year ended December 31, 2020, this adjustment resulted in a decrease of $31 million ($23 million after-tax) in depreciation expense in Virginia Power’s Consolidated Statements of Income and an increase to Dominion Energy’s EPS of $0.03 per share.

In January 2022, Dominion Energy revised the estimated useful life of its non-jurisdictional and certain nonregulated solar generation facilities to 35 years. This revision is expected to result in an annual decrease of depreciation expense of approximately $20 million ($15 million after-tax), including approximately $8 million ($6 million after-tax) at Virginia Power, and increase Dominion Energy’s EPS by approximately $0.02.

Virginia Power’s non-jurisdictional property, plant and equipment is depreciated using the straight-line method over an estimated useful life of 35 years, effective January 2022.

Capitalized costs of development wells and leaseholds are amortized on a field-by-field basis using the unit-of-production method and the estimated proved developed or total proved gas and oil reserves, at a rate of $1.92 and $1.97 per mcfe in 2021 and 2020, respectively.

Dominion Energy’s nonutility property, plant and equipment is depreciated using the straight-line method over the following estimated useful lives:

Asset		Estimated Useful Lives
Nonregulated generation-nuclear		44 years
Nonregulated generation-solar		15-35 years
General and other		5-59 years

Nuclear fuel used in electric generation is amortized over its estimated service life on a units-of-production basis. The Companies report the amortization of nuclear fuel in electric fuel and other energy-related purchases expense in their Consolidated Statements of Income and in depreciation and amortization in their Consolidated Statements of Cash Flows.

Long-Lived and Intangible Assets

The Companies perform an evaluation for impairment whenever events or changes in circumstances indicate that the carrying amount of long-lived assets or intangible assets with finite lives may not be recoverable. A long-lived or intangible asset is written down to fair value if the sum of its expected future undiscounted cash flows is less than its carrying amount. Intangible assets with finite lives are amortized over their estimated useful lives. See Note 6 for further discussion on the impairment of long-lived assets.

Regulatory Assets and Liabilities

The accounting for the Companies’ regulated electric and gas operations differs from the accounting for nonregulated operations in that the Companies are required to reflect the effect of rate regulation in their Consolidated Financial Statements. For regulated businesses subject to federal or state cost-of-service rate regulation, regulatory practices that assign costs to accounting periods may differ from accounting methods generally applied by nonregulated companies. When it is probable that regulators will permit the recovery of current costs through future rates charged to customers, these costs that otherwise would be expensed by nonregulated companies are deferred as regulatory assets. Likewise, regulatory liabilities are recognized when it is probable that regulators will require customer refunds or other benefits through future rates or when revenue is collected from customers for expenditures that have yet to be incurred.

The Companies evaluate whether or not recovery of their regulatory assets through future rates is probable as well as whether a regulatory liability due to customers is probable and make various assumptions in their analyses. These analyses are generally based on:

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

	•	Past experience;

	•	Discussions with applicable regulatory authorities and legal counsel;

	•	Forecasted earnings; and

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

Generally, regulatory assets and liabilities are amortized into income over the period authorized by the regulator. If recovery of a regulatory asset is determined to be less than probable, it will be written off in the period such assessment is made. A regulatory liability, if considered probable, will be recorded in the period such assessment is made or reversed into earnings if no longer probable. See Notes 12 and 13 to the Consolidated Financial Statements for additional information.

Leases

The Companies lease certain assets including vehicles, real estate, office equipment and other operational assets under both operating and finance leases. For the Companies’ operating leases, rent expense is recognized on a straight-line basis over the term of the lease agreement, subject to regulatory framework. Rent expense associated with operating leases, short-term leases and variable leases is primarily recorded in other operations and maintenance expense in the Companies’ Consolidated Statements of Income. Rent expense associated with finance leases results in the separate presentation of interest expense on the lease liability and amortization expense of the related right-of-use asset in the Companies’ Consolidated Statements of Income or, subject to regulatory framework, is deferred within regulatory assets in the Consolidated Balance Sheets and amortized into the Consolidated Statements of Income.

Certain of the Companies’ leases include one or more options to renew, with renewal terms that can extend the lease from one to 70 years. The exercise of renewal options is solely at the Companies’ discretion and is included in the lease term if the option is reasonably certain to be exercised. A right-of-use asset and corresponding lease liability for leases with original lease terms of one year or less are not included in the Consolidated Balance Sheets, unless such leases contain renewal options that the Companies are reasonably certain will be exercised. Additionally, certain of the Companies’ leases contain escalation clauses whereby payments are adjusted for consumer price or other indices or contain fixed dollar or percentage increases. The Companies also have leases with variable payments based upon usage of, or revenues associated with, the leased assets.

The determination of the discount rate utilized has a significant impact on the calculation of the present value of the lease liability included in the Companies’ Consolidated Balance Sheets. For the Companies’ fleet of leased vehicles, the discount rate is equal to the prevailing borrowing rate earned by the lessor. For the Companies’ remaining leased assets, the discount rate implicit in the lease is generally unable to be determined from a lessee perspective. As such, the Companies use internally-developed incremental borrowing rates as a discount rate in the calculation of the present value of the lease liability. The incremental borrowing rates are determined based on an analysis of the Companies’ publicly available unsecured borrowing rates, adjusted for a collateral discount, over various lengths of time that most closely correspond to the Companies’ lease maturities.

In addition, Dominion Energy acts as lessor under certain power purchase agreements in which the counterparty or counterparties purchase substantially all of the output of certain solar facilities. These leases are considered operating in nature. For such leasing arrangements, rental revenue and an associated accounts receivable are recorded when the monthly output of the solar facility is determined. Depreciation on these solar facilities is computed on a straight-line basis over an estimated useful life of 35 years, effective January 2022.

Asset Retirement Obligations

The Companies recognize AROs at fair value as incurred or when sufficient information becomes available to determine a reasonable estimate of the fair value of future retirement activities to be performed, for which a legal obligation exists. These amounts are generally capitalized as costs of the related tangible long-lived assets. Since relevant market information is not available, fair value is estimated using discounted cash flow analyses. Quarterly, the Companies assess their AROs to determine if circumstances indicate that estimates of the amounts or timing of future cash flows associated with retirement activities have changed. AROs are adjusted when significant changes in the amounts or timing of future cash flows are identified. Dominion Energy reports accretion of AROs and depreciation on asset retirement costs associated with its natural gas pipelines of its distribution business as an adjustment to the related regulatory assets or liabilities when revenue is recoverable from customers for AROs. The Companies report accretion of AROs and depreciation on asset retirement costs associated with decommissioning its nuclear power stations as an adjustment to the regulatory asset or liability for certain jurisdictions. Additionally, the Companies report accretion of AROs and depreciation on asset retirement costs associated with certain rider and prospective rider projects and other electric generation and distribution facilities as an adjustment to the regulatory asset for certain jurisdictions. Accretion of all other AROs and depreciation of all other asset retirement costs are reported in other operations and maintenance expense and depreciation expense, respectively, in the Consolidated Statements of Income.

Debt Issuance Costs

The Companies defer and amortize debt issuance costs and debt premiums or discounts over the expected lives of the respective debt issues, considering maturity dates and, if applicable, redemption rights held by others. Deferred debt issuance costs are recorded as a reduction in long-term debt in the Consolidated Balance Sheets. Amortization of the issuance costs is reported as interest expense. Unamortized costs associated with redemptions of debt securities prior to stated maturity dates are generally recognized and recorded in interest expense immediately. As permitted by regulatory authorities, gains or losses resulting from the refinancing or redemption of debt allocable to utility operations subject to cost-based rate regulation are deferred and amortized.

Investments

Debt Securities

Dominion Energy accounts for and classifies investments in debt securities as trading or available-for-sale securities. Virginia Power classifies investments in debt securities as available-for-sale securities.

•	Debt securities classified as trading securities include securities held by Dominion Energy in rabbi trusts associated with certain deferred compensation plans. These securities are reported in other investments in the Consolidated Balance Sheets at fair value with net realized and unrealized gains and losses included in other income in the Consolidated Statements of Income.

•

Debt securities classified as available-for-sale securities include all other debt securities, primarily comprised of securities held in the nuclear decommissioning trusts. These investments are reported at fair value in nuclear decommissioning trust funds in the Consolidated Balance Sheets. Net realized and unrealized gains and losses (including any credit-related impairments) on investments held in nuclear decommissioning trusts are deferred to a regulatory asset or liability, as applicable, for certain jurisdictions subject to cost-based regulation. For all other available-for-sale debt securities, including those held in Dominion Energy’s nonregulated generation nuclear decommissioning trusts, net realized gains and losses (including any credit-related impairments) are included in other income and unrealized gains and losses are reported as a component of AOCI, after-tax.

In determining realized gains and losses for debt securities, the cost basis of the security is based on the specific identification method.

Credit Impairment

The Companies periodically review their available-for-sale debt securities to determine whether a decline in fair value should be considered credit related. If a decline in the fair value of any available-for-sale debt security is determined to be credit related, the credit-related impairment is recorded to an allowance included in nuclear decommissioning trust funds in the Companies’ Consolidated Balance Sheets at the end of the reporting period, with such allowance for credit losses subject to reversal in subsequent evaluations.

Using information obtained from their nuclear decommissioning trust fixed-income investment managers, the Companies record in earnings, or defer as applicable for certain jurisdictions subject to cost-based regulation, any unrealized loss for a debt security when the manager intends to sell the debt security or it is more-likely-than-not that the manager will have to sell the debt security before recovery of its fair value up to its cost basis. If that is not the case, but the debt security is deemed to have experienced a credit loss, the Companies record the credit loss in earnings or defer as applicable for certain jurisdictions subject to cost-based regulation, with the remaining non-credit portion of the unrealized loss recorded in AOCI. Credit losses are evaluated primarily by considering the credit ratings of the issuer, prior instances of non-performance by the issuer and other factors

Equity Securities with Readily Determinable Fair Values

Equity securities with readily determinable fair values include securities held by Dominion Energy in rabbi trusts associated with certain deferred compensation plans and securities held by the Companies in the nuclear decommissioning trusts. The Companies record all equity securities with a readily determinable fair value, or for which they are permitted to estimate fair value using NAV (or its equivalent), at fair value in nuclear decommissioning trust funds and other investments in the Consolidated Balance Sheets. Net realized and unrealized gains and losses on equity securities held in the nuclear decommissioning trusts are deferred to a regulatory asset or liability, as applicable, for certain jurisdictions subject to cost-based regulation. For all other equity securities, including those held in Dominion Energy’s nonregulated generation nuclear decommissioning trusts and rabbi trusts, net realized and unrealized gains and losses are included in other income in the Consolidated Statements of Income.

Equity Securities without Readily Determinable Fair Values

The Companies account for illiquid and privately held securities without readily determinable fair values under either the equity method or cost method. Equity securities without readily determinable fair values include:

•

Equity method investments when the Companies have the ability to exercise significant influence, but not control, over the investee. Dominion Energy’s investments are included in investments in equity method affiliates in its Consolidated Balance Sheets, except for the liability to Atlantic Coast Pipeline or where such investments are classified as held for sale. Dominion Energy records equity method adjustments in other income in its Consolidated Statements of Income, including its proportionate share of investee income or loss, gains or losses resulting from investee capital transactions, amortization of certain differences between the carrying value and the equity in the net assets of the investee at the date of investment and other adjustments required by the equity method.

•	Cost method investments when the Companies do not have the ability to exercise significant influence over the investee. The Companies’ investments are included in other investments and nuclear decommissioning trust funds. Cost method investments

	are reported at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer.

Other-Than-Temporary Impairment

The Companies periodically review their equity method investments to determine whether a decline in fair value should be considered other-than-temporary. If a decline in the fair value of any security is determined to be other-than-temporary, the investment is written down to its fair value at the end of the reporting period.

Inventories

Materials and supplies and fossil fuel inventories are valued primarily using the weighted-average cost method. Stored gas inventory is valued using the weighted-average cost method, except for East Ohio gas distribution operations, which are valued using the LIFO method. Under the LIFO method, current stored gas inventory was valued at $26 million and $2 million at December 31, 2021 and December 31, 2020, respectively. Based on the average price of gas purchased during 2021 and 2020, the cost of replacing the current portion of stored gas inventory exceeded the amount stated on a LIFO basis by $74 million and $52 million, respectively.

Gas Imbalances

Natural gas imbalances occur when the physical amount of natural gas delivered from, or received by, a pipeline system or storage facility differs from the contractual amount of natural gas delivered or received. Dominion Energy values these imbalances due to, or from, shippers and operators at an appropriate index price at period end, subject to the terms of its tariff for regulated entities. Imbalances are primarily settled in-kind. Imbalances due to Dominion Energy from other parties are reported in other current assets and imbalances that Dominion Energy owes to other parties are reported in other current liabilities in the Consolidated Balance Sheets.

Goodwill

Dominion Energy evaluates goodwill for impairment annually as of April 1 and whenever an event occurs or circumstances change in the interim that would more-likely-than-not reduce the fair value of a reporting unit below its carrying amount.

New Accounting Standards

Debt with Conversion Options and Contracts in an Entity’s Own Equity

In August 2020, the FASB issued revised accounting guidance for debt with conversion options and contracts in an entity’s own equity. The revised guidance eliminates the ability to assert cash settlement and exclude potential shares from the diluted EPS calculation for a contract that may be settled in stock or cash. The guidance became effective for Dominion Energy’s interim and annual reporting periods beginning January 1, 2022. Upon adoption, Dominion Energy will apply the guidance using a modified retrospective approach and will continue to apply the if-converted method to calculate diluted EPS in connection with any potentially dilutive instruments, or components of instruments, that may be settled in stock or cash.

Leases

In February 2016, the FASB issued revised accounting guidance for the recognition, measurement, presentation and disclosure of leasing arrangements. The update requires that a liability and corresponding right-of-use asset are recorded on the balance sheet for all leases, including those leases classified as operating leases, while also refining the definition of a lease. In addition, lessees are required to disclose key information about the amount, timing and uncertainty of cash flows arising from leasing arrangements. Lessor accounting remains largely unchanged.

The guidance became effective for the Companies’ interim and annual reporting periods beginning January 1, 2019. The Companies adopted this revised accounting guidance using a modified retrospective approach, which requires lessees and lessors to recognize and measure leases at the date of adoption. The Companies applied the practical expedients, which required no reassessment of whether existing contracts are or contain leases, no reassessment of lease classification for existing leases and no reassessment of existing or expired land easements that were not previously accounted for as leases. In connection with the adoption of this revised accounting guidance, Dominion Energy and Virginia Power recorded $504 million and $209 million, respectively, of offsetting right-of-use assets and liabilities for operating leases in effect at the adoption date. Upon entering an agreement to sell substantially all of Dominion Energy’s gas transmission and storage operations in 2020, $43 million of the initially recorded right-of-use assets and liabilities for operating leases were considered activity associated with discontinued operations. See Note 15 for additional information.

NOTE 3. ACQUISITIONS AND DISPOSITIONS

Dominion Energy

Disposition of Gas Transmission & Storage Operations

In July 2020, Dominion Energy entered into an agreement with BHE with a total value of approximately $10 billion, comprised of approximately $4.0 billion of cash consideration (subject to customary closing adjustments) plus the assumption of long-term debt, to sell substantially all of its gas transmission and storage operations, including processing assets, as well as noncontrolling partnership interests in Iroquois, JAX LNG and White River Hub and a controlling interest in Cove Point (consisting of 100% of the general partner interest and 25% of the total limited partner interests). The agreement provides that Dominion Energy retains the assets and obligations of the pension and other postretirement employee benefit plans associated with the operations included in the transaction and relating to services provided through closing. In October 2020, pursuant to a provision in the agreement with BHE, Dominion Energy elected to exclude the Q-Pipe Group and certain other affiliated entities from the transaction as approval under the Hart-Scott-Rodino Act had not been obtained by mid-September 2020. Concurrently in October 2020, Dominion Energy and BHE entered into a separate agreement under which Dominion Energy would sell the Q-Pipe Group and certain other affiliated entities to BHE for cash consideration of $1.3 billion and the assumption of related long-term debt.

In November 2020, Dominion Energy completed the GT&S Transaction and received cash proceeds of $2.7 billion. This transaction was structured as an asset sale for tax purposes. Dominion Energy retained a 50% noncontrolling interest in Cove Point that is accounted for as an equity method investment upon closing of the GT&S Transaction as Dominion Energy has the ability to exercise significant influence over, but not control, Cove Point. The retained 50% noncontrolling interest in Cove Point was recognized at its initial fair value of $2.8 billion on the date of close estimated using an income approach and a market approach. The valuation is considered a Level 3 fair value measurement due to the use of significant judgment and unobservable inputs, including projected timing and amount of future cash flows and a discount rate reflecting risks inherent in the future cash flows and market prices. Upon closing the GT&S Transaction, Dominion Energy recognized a gain of $127 million (net of a $1.4 billion write-off of goodwill and a $222 million closing adjustment paid to BHE in December 2020) and an associated tax expense of $336 million, presented in net income (loss) from discontinued operations including noncontrolling interest in Dominion Energy’s Consolidated Statements of Income.

In connection with closing of the GT&S Transaction, Dominion Energy and BHE entered into a transition services agreement under which Dominion Energy will continue to provide specified administrative services to support the operations of the disposed business for up to 24 months after closing, subsequently extended through June 2023 for certain services. In addition, BHE will provide certain administrative services to Dominion Energy. Dominion Energy recorded revenue of $21 million and $4 million associated with the transition service agreement in operating revenue in the Consolidated Statements of Income for the years ended December 31, 2021 and 2020, respectively.

Also in November 2020, BHE provided a $1.3 billion deposit to Dominion Energy on the Q-Pipe Transaction. In July 2021, Dominion Energy and BHE mutually agreed to terminate the Q-Pipe Transaction as a result of uncertainty associated with receiving approval under the Hart-Scott-Rodino Act. Also in July 2021, Dominion Energy entered into an approximately $1.3 billion term loan credit agreement and borrowed the full amount available thereunder. The agreement matured in December 2021 and bore interest at a variable rate. The proceeds were utilized to repay the deposit received from BHE on the Q-Pipe Transaction. Upon completion of a sale of the Q-Pipe Group, Dominion Energy was required to utilize the net proceeds to repay any outstanding balances under the term loan agreement.

In October 2021, Dominion Energy entered into an agreement with Southwest Gas to sell the Q-Pipe Group. The total value of this transaction is approximately $2 billion, comprised of approximately $1.5 billion of cash consideration (subject to customary closing adjustments) plus the assumption of long-term debt. The agreement provides that Dominion Energy retains the assets and obligations of the pension and other postretirement employee benefit plans associated with the operations included in the transaction and relating to services provided through closing.

In December 2021, Dominion Energy completed the sale of the Q-Pipe Group and received cash proceeds of $1.5 billion. This transaction is structured as an asset sale for tax purposes. Upon closing, Dominion Energy recognized a gain of $666 million (net of a $191 million write-off of goodwill) and an associated tax expense of $173 million, presented in net income (loss) from discontinued operations including noncontrolling interest in Dominion Energy’s Consolidated Statements of Income. Also in December 2021, Dominion Energy used the net proceeds from the sale to repay all outstanding balances under the July 2021 term loan agreement and terminated the term loan agreement.

In connection with the closing of the sale of the Q-Pipe Group, Dominion Energy and Southwest Gas entered into a transition services agreement under which Dominion Energy will continue to provide specified administrative services to support the operations of the disposed businesses for up to 12 months after closing, subject to extension.

The operations included in both the GT&S Transaction and the Q-Pipe Group are presented in held-for-sale and discontinued operations effective July 2020. As a result, the previously reported amounts have been recast to reflect this presentation and depreciation and amortization ceased on the applicable assets. As Cove Point had previously been consolidated within Dominion Energy’s financial statements, balances associated with Cove Point prior to the closing of the GT&S Transaction are presented within held-for-sale and discontinued operations. See Note 9 for further information regarding Dominion Energy’s equity method investment in Cove Point.

The following table represents selected information regarding the results of operations, which are reported within discontinued operations in Dominion Energy’s Consolidated Statements of Income:

		Year Ended December 31, 2021				Year Ended December 31, 2020								Year Ended December 31, 2019
		Q-Pipe Group(1)				GT&S Transaction(1)				Q-Pipe Group				GT&S Transaction				Q-Pipe Group
(millions)
Operating revenue		$	254			$	1,710			$	246			$	2,213			$	251
Operating expense(2)			76				1,289				96				1,367				131
Other income (loss)(3)			28				88				1				58				4
Interest and related charges(4)			25				372				20				267				20
Income before income taxes			181				137				131				637				104
Income tax expense (benefit)(5)			36				334				(9	)			120				23
Net income (loss) including noncontrolling interests			145				(197	)			140				517				81
Noncontrolling interests			—				106				—				11				—
Net income (loss) attributable to Dominion Energy		$	145			$	(303	)		$	140			$	506			$	81

(1)	Operations associated with the Q-Pipe Group are through the December 31, 2021 closing date. Operations associated with the GT&S Transaction are through the November 1, 2020 closing date.

(2)	GT&S Transaction includes a charge of $482 million ($359 million after-tax) recorded in the second quarter of 2020 associated with the probable abandonment of a significant portion of the Supply Header Project as well as the establishment of a $75 million ARO as a result of the cancellation of the Atlantic Coast Pipeline Project.

(3)	Q-Pipe Group includes a $25 million benefit associated with the termination of the Q-Pipe Transaction in the third quarter of 2021.

(4)	GT&S Transaction includes a loss of $237 million ($178 million after-tax) recorded in the third quarter of 2020 associated with cash flow hedges of debt-related items that were determined to be probable of not occurring.

(5)	Excludes $17 million income tax benefit recorded in 2021 associated with the GT&S Transaction.

The carrying amounts of major classes of assets and liabilities relating to the Q-Pipe Group, all of which was classified as current and reported as held for sale in Dominion Energy’s Consolidated Balance Sheets at December 31, 2020, were as follows:

(millions)
Current assets(1)				$	47
Equity method investments(2)					35
Property, plant and equipment, net					1,113
Other deferred charges and other assets, including goodwill(3) and intangible assets					224
Current liabilities					30
Long-term debt					426
Other deferred credits and liabilities					154

(1)	Includes cash and cash equivalents of $7 million.

(2)	Comprised of equity method investment in White River Hub.

(3)	Includes goodwill of $191 million.

Capital expenditures and significant noncash items relating to the disposal groups included the following:

		Year Ended December 31, 2021				Year Ended December 31, 2020								Year Ended December 31, 2019
		Q-Pipe Group(1)				GT&S Transaction(1)				Q-Pipe Group				GT&S Transaction				Q-Pipe Group
(millions)
Capital expenditures		$	34			$	292			$	38			$	386			$	42
Significant noncash items
Impairment of assets and other charges			—				469				—				13				1
Charge related to a voluntary retirement program			—				—				—				19				3
Depreciation, depletion and amortization			—				177				27				322				51
Accrued capital expenditures			—				—				1				25				2

(1)	Operations associated with the Q-Pipe Group are through the December 31, 2021 closing date. Operations associated with the GT&S Transaction are through the November 1, 2020 closing date.

In October 2020, Dominion Energy settled various derivatives related to, but not included in, the GT&S Transaction for a payment of $165 million.

Acquisition of SCANA

In January 2019, Dominion Energy issued 95.6 million shares of Dominion Energy common stock, valued at $6.8 billion, representing 0.6690 of a share of Dominion Energy common stock for each share of SCANA common stock, in connection with the completion of the SCANA Combination. SCANA, through its regulated subsidiaries, is primarily engaged in the generation, transmission and distribution of electricity in the central, southern and southwestern portions of South Carolina and in the distribution of natural gas in North Carolina and South Carolina. In addition, at the closing of the SCANA Combination, SCANA marketed natural gas to retail customers in the southeast U.S. Following completion of the SCANA Combination, SCANA operates as a wholly-owned subsidiary of Dominion Energy. In addition, SCANA’s debt totaled $6.9 billion at closing. The SCANA Combination expanded Dominion Energy’s portfolio of regulated electric generation, transmission and distribution and regulated natural gas distribution infrastructure operations.

Merger Conditions

Refunds to Customers

As a condition to the SCANA Merger Approval Order, DESC will provide refunds and restitution of $2.0 billion over 20 years with capital support from Dominion Energy.

In September and October 2017, DESC received proceeds totaling $1.1 billion in full satisfaction of its share of a settlement agreement among DESC, Santee Cooper and Toshiba Corporation in connection with Westinghouse and WECTEC, both wholly-owned subsidiaries of Toshiba Corporation and responsible for the engineering and construction of the NND Project, filing for bankruptcy. The purchase price allocation below includes a previously established regulatory liability at DESC totaling $1.1 billion, of which $67 million was considered current, associated with the monetization of the bankruptcy settlement with Toshiba Corporation. In accordance with the terms of the SCANA Merger Approval Order, this regulatory liability, net of amounts that may be required to satisfy any liens against NND Project property, totaling $1.0 billion will be refunded to DESC electric service customers over a 20-year period ending in 2039.

Additionally, in the first quarter of 2019, DESC recorded a reduction in operating revenue and a corresponding regulatory liability of $1.0 billion, of which $137 million was considered current, representing a refund of amounts previously collected from retail electric customers of DESC for the NND Project to be credited over an estimated 11-year period, effective February 2019. As a result, Dominion Energy’s Consolidated Statements of Income for the year ended December 31, 2019 includes a $756 million after-tax charge which is reflected in the Corporate and Other segment.

NND Project

As a condition to the SCANA Merger Approval Order, DESC committed to excluding from rate recovery $2.4 billion of costs related to the NND Project and $180 million of costs associated with the purchase of the Columbia Energy Center power station. The remaining regulatory asset associated with the NND Project of $2.8 billion, of which $138 million was considered current, will be collected over a 20-year period, including a return on investment. In January 2019, DESC filed the capital cost rider in accordance with the terms of the SCANA Merger Approval Order for rates effective in February 2019 for DESC’s retail electric customers. The South Carolina Commission approved this filing in January 2019.

Other Terms and Conditions

	•	DESC agreed not to file an application for a general rate case with the South Carolina Commission with a requested effective date earlier than January 2021. See Note 13 for information on the status of DESC’s base rate case;

	•	PSNC agreed not to file an application for a general rate case with the North Carolina Commission any earlier than April 2021. See Note 13 for information on the status of PSNC’s general rate case;

	•	Dominion Energy committed to increasing SCANA’s historical level of corporate contributions to charities by $1 million per year over five years beginning in 2019;

	•	Dominion Energy will maintain DESC and PSNC’s headquarters in Cayce, South Carolina and Gastonia, North Carolina, respectively; and

	•	Dominion Energy will seek to minimize reductions in local employment by allowing some DES employees supporting shared and common services functions and activities to be located in Cayce, South Carolina where it makes economic and practical sense to do so.

Purchase Price Allocation

SCANA’s assets acquired and liabilities assumed have been measured at estimated fair value at closing and are included in Dominion Energy South Carolina and Gas Distribution. The majority of the operations acquired are subject to the rate setting authority of FERC and the North and South Carolina Commissions and are therefore accounted for pursuant to ASC 980, Regulated Operations. The fair values of SCANA’s assets and liabilities subject to rate-setting and cost recovery provisions provide revenues derived from costs, including a return on investment of assets and liabilities included in rate base. As such, the fair values of these assets and liabilities equal their carrying values. Accordingly, neither the assets and liabilities acquired, nor the unaudited pro forma financial information, reflect any adjustments related to these amounts.

The fair value of SCANA’s assets acquired and liabilities assumed that are not subject to the rate-setting provisions discussed above and the fair values of SCANA’s investments accounted for under the equity method were determined using the income approach and the market approach. The valuation of SCANA’s long-term debt is considered a Level 2 fair value measurement. All other valuations are considered Level 3 fair value measurements due to the use of significant judgmental and unobservable inputs, including projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future market prices.

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed was reflected as goodwill. The goodwill reflects the value associated with enhancing Dominion Energy’s portfolio of regulated operations in the growing southeast region of the U.S. The goodwill recognized is not deductible for income tax purposes, and as such, no deferred taxes have been recorded related to goodwill.

The table below shows the allocation of the purchase price to the assets acquired and liabilities assumed at closing, which reflects certain adjustments related to income taxes, as discussed in Note 5, from the preliminary valuation recognized during the measurement period.

	Amount
(millions)
Total current assets(1)		$	1,782
Investments(2)			224
Property, plant and equipment(3)(4)			11,006
Goodwill			2,609
Regulatory assets(5)			3,940
Other deferred charges and other assets, including intangible assets(6)			430
Total Assets			19,991
Total current liabilities(7)			1,556
Long-term debt			6,707
Deferred income taxes			1,068
Regulatory liabilities			2,706
Other deferred credits and other liabilities(8)			1,115
Total Liabilities			13,152
Total purchase price(9)		$	6,839

(1)	Includes $389 million of cash, restricted cash and equivalents, of which $115 million is considered restricted.

(2)	Includes $31 million for equity method investments. The fair value adjustment on the equity method investments is considered to be equity method goodwill and is not amortized.

(3)

Includes $105 million of certain property, plant and equipment associated with the NND Project for which Dominion Energy committed to forgo recovery in accordance with the SCANA Merger Approval Order. As a result, Dominion Energy’s Consolidated Statements of Income for the year ended December 31, 2019 include a charge of $105 million ($79 million after-tax), included in impairment of assets and other charges (reflected in the Corporate and Other segment).

(4)	Nonregulated property, plant and equipment, excluding land, will be depreciated on a straight-line basis over the remaining useful lives of such property, primarily ranging from 5 to 78 years.

(5)	Includes $258 million of certain income tax-related regulatory assets associated with the NND Project for which Dominion Energy committed to forgo recovery in accordance with the SCANA Merger Approval Order. See Note 5 for additional information.

(6)	Intangible assets have an estimated weighted-average amortization period of approximately five years.

(7)	Includes $40 million outstanding under letters of credit advances, which were repaid in January 2019, as well as $173 million outstanding commercial paper under various credit facilities. All such credit facilities were terminated in 2019.

(8)	Includes a $379 million pension and other postretirement benefit liability.

(9)	Includes stock-based compensation awards with a fair value of $21 million.

Results of Operations and Unaudited Pro Forma Information

The impact of the SCANA Combination on Dominion Energy’s operating revenue was an increase of $3.6 billion, $3.3 billion and $3.1 billion for the years ended December 31, 2021, 2020 and 2019, respectively, in the Consolidated Statements of Income. The impact of the SCANA Combination on Dominion Energy’s net income attributable to Dominion Energy was an increase of $287 million and $277 million for the years ended December 31, 2021 and 2020, respectively, and a decrease of $1.1 billion for the year ended December 31, 2019 in the Consolidated Statements of Income.

Dominion Energy incurred merger and integration-related costs of $31 million and $97 million for the years ended December 31, 2021 and 2020, respectively, all of which is recorded in other operations and maintenance expense in the Consolidated Statements of Income. Dominion Energy incurred merger and integration-related costs of $646 million for the year ended December 31, 2019. The amount for the year ended December 31, 2019 includes $427 million for a charge related to a voluntary retirement program. See Note 22 for additional information. Of the remaining merger and integration-related costs, $210 million is recorded in other operations and maintenance expense and $9 million was recorded in interest and related charges in the Consolidated Statements of Income for the year ended December 31, 2019. These costs consist of professional fees, the charitable contribution commitment described above, employee-related expenses, certain financing costs and other miscellaneous costs.

The following unaudited pro forma financial information reflects the consolidated results of operations of Dominion Energy assuming the SCANA Combination had taken place on January 1, 2018. The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of the consolidated results of operations that would have been achieved or the future consolidated results of operations of the combined company.

		Twelve Months Ended
		December 31, 2019(1)
(millions, except EPS)
Operating revenue		$	15,408
Net income attributable to Dominion Energy			3,266
Earnings Per Common Share – Basic		$	4.04
Earnings Per Common Share – Diluted		$	4.00

(1)	Amounts include adjustments for non-recurring costs directly related to the SCANA Combination.

Sale of Interest in Cove Point

In October 2019, Dominion Energy signed an agreement to sell its 25% noncontrolling limited partnership interests in Cove Point to Brookfield. In December 2019, the sale was completed and Dominion Energy received cash consideration of $2.1 billion, subject to working capital adjustments. The sale was accounted for by Dominion Energy following the guidance for a change in a parent company’s ownership interest in a consolidated subsidiary. Because Dominion Energy controlled Cove Point both before and after the sale of the noncontrolling interest, the change in Dominion Energy’s ownership interest in Cove Point was accounted for as an equity transaction and no gain or loss was recognized.

Sale of Hope

In February 2022, Dominion Energy entered into an agreement to sell 100% of the equity interests in Hope to Ullico for $690 million of cash consideration, subject to customary closing adjustments. The sale will be treated as a stock sale for tax purposes and is expected to close by the end of 2022, contingent on clearance or approval under the Hart-Scott-Rodino Act and from the West Virginia Commission, and other customary closing and regulatory conditions. While Dominion Energy is still completing its evaluation, it does not expect to record a significant gain or loss associated with the sale. Dominion Energy will reclassify the assets and liabilities to be disposed of, currently reflected in Gas Distribution, as held for sale starting in the first quarter of 2022.

Sale of Kewaunee

In May 2021, Dominion Energy entered into an agreement to sell 100% of the equity interests in Dominion Energy Kewaunee, Inc. to EnergySolutions, including the transfer of all decommissioning obligations associated with Kewaunee, which ceased operations in 2013. The agreement provides that Dominion Energy retains the assets and obligations of the pension and other postretirement employee benefit plans. In addition, Dominion Energy may continue to withdraw funds prior to closing from the nuclear decommissioning trust to recover certain spent nuclear fuel and other permitted costs, subject to certain conditions. The sale will be treated as an asset sale for tax purposes and is subject to termination by either party if not completed by December 2022. Closing is contingent on approval from the Wisconsin Commission as well as the NRC for the transfer of control of applicable licenses. The purchase agreement requires that EnergySolutions be subject to the Wisconsin regulatory conditions agreed to by Dominion Energy upon its acquisition of Kewaunee, including the return of any excess decommissioning funds to WPSC and WP&L customers following completion of all decommissioning activities.

In May 2021, Dominion Energy and EnergySolutions submitted a license transfer application to the NRC. Also in May 2021, Dominion Energy submitted an application to the Wisconsin Commission for approval. In July 2021, WPSC and WP&L submitted a joint request to the Wisconsin Commission for the waiver of both of their rights of first refusal to purchase Kewaunee, such rights having been granted as the former owners of Kewaunee. At December 31, 2021, Dominion Energy determined that the assets and liabilities associated with the Kewaunee sale, included in Contracted Assets, did not meet the criteria to be classified as held for sale due to the significant uncertainty surrounding the timing of or ability to obtain necessary regulatory approvals.

Dominion Energy expects to record a loss if and when it determines that criteria for the classification as held for sale have been met. If such classification had been made at December 31, 2021, Dominion Energy would have recognized a loss of approximately $725 million ($570 million after-tax). If the sale is ultimately completed, the final net loss will primarily depend on the value of the nuclear decommissioning trust and AROs at closing.

Acquisition of Birdseye

In May 2021, Dominion Energy acquired 100% of the ownership interest in Birdseye from BRE Holdings, LLC for total consideration of $46 million, consisting of $28 million in cash and $18 million, measured at fair value at closing, of consideration contingent on the achievement of certain revenue targets and future development project sales. Birdseye is primarily engaged in the development of solar energy projects in southeastern states in the U.S. with 2.5 GW of solar generation projects under development. The allocation of

the purchase price resulted in $25 million of development project assets, primarily reflected in other deferred charges and other assets in Dominion Energy’s Consolidated Balance Sheets, and $24 million of goodwill, which is not deductible for tax purposes. The goodwill reflects the value associated with enhancing Dominion Energy's development of regulated and long-term contracted solar generating and electric storage projects. The fair value measurements, including of the assets acquired, were determined using the income approach and are considered Level 3 fair value measurements due to the use of significant judgmental and unobservable inputs, including projected timing and amount of future cash flows. Birdseye is included in Contracted Assets.

NOTE 4. OPERATING REVENUE

The Companies’ operating revenue consists of the following:

Year Ended December 31,		2021				2020				2019
(millions)
Dominion Energy
Regulated electric sales:
Residential		$	4,509			$	4,833			$	4,325
Commercial			3,194				3,102				3,219
Industrial			748				730				683
Government and other retail			921				868				873
Wholesale			175				128				176
Nonregulated electric sales			1,005				823				941
Regulated gas sales:
Residential			1,455				1,283				1,343
Commercial			527				457				457
Other			135				88				109
Nonregulated gas sales			96				174				495
Regulated gas transportation and storage			945				801				742
Other regulated revenues			265				327				252
Other nonregulated revenues(1)(2)			195				138				130
Total operating revenue from contracts with customers			14,170				13,752				13,745
Other revenues(3)(4)			(206	)			420				656
Total operating revenue		$	13,964			$	14,172			$	14,401
Virginia Power
Regulated electric sales:
Residential		$	3,366			$	3,677			$	3,657
Commercial			2,417				2,342				2,712
Industrial			367				380				455
Government and other retail			862				804				823
Wholesale			107				90				128
Nonregulated electric sales			44				19				15
Other regulated revenues			234				299				190
Other nonregulated revenues(1)(2)			73				50				56
Total operating revenue from contracts with customers			7,470				7,661				8,036
Other revenues(1)(3)			—				102				72
Total operating revenue		$	7,470			$	7,763			$	8,108

(1)	See Notes 9 and 25 for amounts attributable to related parties and affiliates.

(2)

Includes sales which are considered to be goods transferred at a point in time of $34 million, $22 million and $37 million for the years ended December 31, 2021, 2020 and 2019, respectively, at Dominion Energy, primarily consisting of sales of commodities related to nonregulated extraction activities and other miscellaneous products. Additionally, sales of renewable energy credits were $33 million, $20 million and $24 million for the years ended December 31, 2021, 2020 and 2019, respectively, at Dominion Energy and $21 million, $11 million and $17 million for the years ended December 31, 2021, 2020 and 2019, respectively, at Virginia Power.

(3)	Includes alternative revenue of $56 million, $119 million and $66 million at Dominion Energy and $44 million, $82 million and $52 million at Virginia Power for years ended December 31, 2021, 2020 and 2019, respectively.

(4)	Includes revenue associated with services provided to discontinued operations of $5 million, $4 million and $6 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The table below discloses the aggregate amount of the transaction price allocated to fixed-price performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period and when Dominion Energy expects to recognize this revenue. These revenues relate to contracts containing fixed prices where Dominion Energy will earn the associated revenue over time as it stands ready to perform services provided. This disclosure does not include revenue related to performance obligations that are part of a contract with original durations of one year or less. In addition, this disclosure does not include expected consideration related to performance obligations for which Dominion Energy elects to recognize revenue in the amount it has a right to invoice.

Revenue expected to be recognized on multi-year contracts in place at December 31, 2021		2022				2023				2024				2025				2026				Thereafter				Total
(millions)
Dominion Energy(1)		$	68			$	66			$	59			$	51			$	45			$	448			$	737

(1)	Includes no amounts for Virginia Power.

Contract liabilities represent an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration, or the amount that is due, from the customer. At December 31, 2021 and 2020, Dominion Energy’s contract liability balances were $124 million and $130 million, respectively. At December 31, 2021 and 2020, Virginia Power’s contract liability balances were $33 million and $36 million, respectively. The Companies’ contract liabilities are recorded in other current liabilities and other deferred credits and other liabilities in the Consolidated Balance Sheets. The Companies recognize revenue as they fulfill their obligations to provide service to their customers. During the years ended December 31, 2021 and 2020, Dominion Energy recognized revenue of $124 million and $97 million from the beginning contract liability balance. During the years ended December 31, 2021 and 2020, Virginia Power recognized revenue of $36 million and $24 million, respectively, from the beginning contract liability balance.

NOTE 5. INCOME TAXES

Judgment and the use of estimates are required in developing the provision for income taxes and reporting of tax-related assets and liabilities. The interpretation of tax laws and associated regulations involves uncertainty, since tax authorities may interpret the laws differently. The Companies are routinely audited by federal and state tax authorities. Ultimate resolution of income tax matters may result in favorable or unfavorable impacts to net income and cash flows, and adjustments to tax-related assets and liabilities could be material.

The Companies have accounted for the effects of the 2017 Tax Reform Act, although additional changes could occur as guidance is issued and finalized as described below.

In July 2020, the U.S. Department of Treasury issued final regulations providing guidance about the limitation on the deduction for business interest expenses under the 2017 Tax Reform Act. Under the 2017 Tax Reform Act, deductions for net interest expense are limited to 30% of adjusted taxable income, which has, until this point, been defined similarly to EBITDA (earnings before interest, taxes, depreciation and amortization). For tax years beginning after December 31, 2021, the calculation of adjusted taxable income is defined similarly to EBIT (earnings before interest and taxes). For consolidated groups such as Dominion Energy that have both regulated and nonregulated operations, these rules may result in a temporary disallowance of a portion of Dominion Energy’s interest deductions in the future, although any interest disallowed has an indefinite carryforward period.

In December 2020, federal legislation was enacted that, among other things, provides a two-year extension of the beginning construction deadline for, and delays the phase-down of, the solar energy investment tax credit as well as extending the deadlines and phase-down rules for certain other renewable tax credits. The legislation provides that offshore wind facilities are eligible for the investment tax credit if construction on those facilities begins before 2026 with no phase-out. In addition, the U.S. Department of Treasury and the IRS issued guidance for offshore wind that extended the continuity of construction safe harbor to 10 years, which significantly enhances the ability for these projects to qualify for renewable energy tax credits.

As indicated in Note 2, certain of the Companies’ operations, including accounting for income taxes, are subject to regulatory accounting treatment. For regulated operations, many of the changes in deferred taxes from the 2017 Tax Reform Act represent amounts probable of collection from or return to customers, and were recorded as either an increase to a regulatory asset or liability. See Note 13 for more information and current year developments.

Continuing Operations

Details of income tax expense for continuing operations including noncontrolling interests were as follows:

		Dominion Energy												Virginia Power
Year Ended December 31,		2021				2020				2019				2021				2020				2019
(millions)
Current:
Federal		$	(162	)		$	(314	)		$	(94	)		$	67			$	364			$	286
State			45				(81	)			58				(13	)			71				58
Total current expense (benefit)			(117	)			(395	)			(36	)			54				435				344
Deferred:
Federal
Taxes before operating loss carryforwards, investment tax credits and tax reform			151				12				168				145				(226	)			(128	)
Tax utilization expense of operating loss carryforwards			43				44				119				—				—				—
Investment tax credits			250				311				(51	)			(39	)			(27	)			(34	)
State			(19	)			72				(50	)			118				7				22
Total deferred expense (benefit)			425				439				186				224				(246	)			(140	)
Investment tax credit-gross deferral			121				42				62				121				42				62
Investment tax credit-amortization			(4	)			(3	)			(3	)			(2	)			(2	)			(2	)
Total income tax expense		$	425			$	83			$	209			$	397			$	229			$	264

In 2021, Dominion Energy’s current income taxes reflect a benefit from continuing operations as the income tax expense associated with the QPipe Group’s operations, including taxes on the gain, is reflected in discontinued operations. Dominion Energy’s income tax expense reflects the utilization of investment tax credit carryforwards to offset a portion of the federal tax gain on the sale.

In 2020, Dominion Energy’s current income taxes reflect a benefit from continuing operations as the income tax expense associated with gas transmission and storage operations, including taxes on the gain, is reflected in discontinued operations. Dominion Energy’s income tax expense reflects the utilization of investment tax credit carryforwards to offset a portion of the federal tax gain on the sale. In addition, an $18 million income tax benefit is reflected in common shareholders’ equity associated with state deferred taxes on assets and liabilities retained in connection with the GT&S Transaction.

In 2019, the Dominion Energy Gas Restructuring caused changes in tax status at certain of its subsidiaries. The impacts of the changes in tax status decreased deferred income tax expense from continuing operations by $48 million at Dominion Energy. In addition, Dominion Energy recognized a taxable gain resulting from the sale of a 25% noncontrolling interest in Cove Point. The direct tax effects of the transactions included a provision for current income taxes ($362 million) and an offsetting benefit for deferred income taxes ($147 million) and were charged to common shareholders’ equity. The utilization of $208 million federal tax credit carryforwards offsetting a portion of the federal tax liability from the transaction were also charged to common shareholders’ equity. In total, the taxes recorded in common shareholders’ equity resulting from this transaction were $215 million.

Discontinued Operations

Income tax expense (benefit) reflected in discontinued operations is $188 million, $(204) million and $142 million for the years ended December 31, 2021, 2020 and 2019, respectively. 2021 income taxes include a $14 million benefit related to finalizing income tax returns on the GT&S Transaction and the absence of a $36 million benefit on non-deductible goodwill written off in connection with the sale of the Q-Pipe Group. The 2020 income tax expense reflects a charge of $81 million for the write-off of tax-related regulatory assets associated with the Atlantic Coast Pipeline Project and the absence of a $236 million benefit on non-deductible goodwill written off in connection with the GT&S Transaction.

Continuing Operations

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

		Dominion Energy												Virginia Power
Year Ended December 31,		2021				2020				2019				2021				2020				2019
U.S. statutory rate			21.0		%		21.0		%		21.0		%		21.0		%		21.0		%		21.0		%
Increases (reductions) resulting from:
State taxes, net of federal benefit			2.6				2.0				1.5				4.6				4.8				4.5
Investment tax credits			(3.2	)			(9.6	)			(11.4	)			(3.0	)			(4.5	)			(2.9	)
Production tax credits			(0.4	)			(0.7	)			(2.1	)			(0.6	)			(0.7	)			(0.7	)
Valuation allowances			0.1				0.9				0.5				—				—				—
Reversal of excess deferred income taxes			(3.2	)			(5.4	)			(3.2	)			(2.1	)			(2.2	)			(3.1	)
State legislative change			(0.7	)			—				—				(0.7	)			—				—
Write-off of regulatory assets			—				—				21.7				—				—				—
Change in tax status			—				(1.7	)			(5.5	)			—				—				—
AFUDC—equity			(0.4	)			(0.2	)			(0.2	)			(0.5	)			—				—
Changes in state deferred taxes associated with assets held for sale			(0.3	)			(3.2	)			—				—				—				—
Absence of tax on noncontrolling interest			(0.1	)			3.8				(0.2	)			—				—				—
Settlements of uncertain tax positions			(1.2	)			—				—				—				—				—
Employee stock ownership plan deduction			(0.3	)			(0.9	)			(1.4	)			—				—				—
Nondeductible goodwill			—				—				1.8				—				—				—
Other, net			(0.2	)			(0.1	)			1.5				0.1				(0.1	)			(0.2	)
Effective tax rate			13.7		%		5.9		%		24.0		%		18.8		%		18.3		%		18.6		%

For the Companies’ rate-regulated entities, deferred taxes will reverse at the weighted average rate used to originate the deferred tax liability, which in some cases will be 35%. The Companies have recorded an estimate of excess deferred income tax amortization in 2021, and changes in estimates of amounts probable of collection from or return to customers. The reversal of these excess deferred income taxes will impact the effective tax rate, and rates charged to customers. See Note 13 for current year developments.

In December 2021, unrecognized tax benefits related to several state uncertain tax positions acquired in the SCANA Combination were effectively settled through negotiations with the taxing authority. Management believed it was reasonably possible these unrecognized tax benefits could decrease through settlement negotiations or payments during 2021, however no income tax benefits could be recognized unless or until the positions were effectively settled. Resolution of these uncertain tax positions decreased income tax expense by $38 million. In addition, the Companies’ effective tax rates reflect the benefit of a state legislative change enacted in April 2021 for tax years beginning January 1, 2022. Dominion Energy’s effective tax rate reflects a $21 million deferred tax benefit, inclusive of a $16 million deferred tax benefit at Virginia Power.

Dominion Energy’s 2020 effective tax rate reflects an income tax benefit of $45 million associated with the remeasurement of consolidated state deferred taxes with the classification of gas transmission and storage operations as held for sale. In addition, Dominion Energy’s effective tax rate reflects an income tax expense of $55 million attributable to the noncontrolling interest primarily associated with the impairment of non-wholly-owned nonregulated solar facilities held in partnerships discussed in Note 10.

In connection with the SCANA Combination, Dominion Energy committed to forgo, or limit, the recovery of certain income tax-related regulatory assets associated with the NND Project. Dominion Energy’s effective tax rate reflects deferred income tax expense of $194 million in satisfaction of this commitment. Dominion Energy’s effective tax rate also reflects the changes in consolidated state income taxes resulting from the SCANA Combination.

The Companies’ deferred income taxes consist of the following:

		Dominion Energy								Virginia Power
At December 31,		2021				2020				2021				2020
(millions)
Deferred income taxes:
Total deferred income tax assets		$	3,025			$	3,285			$	1,373			$	1,204
Total deferred income tax liabilities			9,397				9,069				4,286				3,832
Total net deferred income tax liabilities		$	6,372			$	5,784			$	2,913			$	2,628
Total deferred income taxes:
Plant and equipment, primarily depreciation method and basis differences		$	6,017			$	5,824			$	3,327			$	3,227
Excess deferred income taxes			(1,107	)			(1,142	)			(629	)			(656	)
Unrecovered NND Project costs			508				529				—				—
DESC rate refund			(113	)			(140	)			—				—
Toshiba Settlement			(189	)			(204	)			—				—
Nuclear decommissioning			1,114				991				324				303
Deferred state income taxes			857				702				420				305
Federal benefit of deferred state income taxes			(179	)			(147	)			(88	)			(64	)
Deferred fuel, purchased energy and gas costs			189				(28	)			126				(34	)
Pension benefits			362				239				(119	)			(105	)
Other postretirement benefits			73				(14	)			93				76
Loss and credit carryforwards			(1,571	)			(1,534	)			(537	)			(354	)
Valuation allowances			140				155				6				6
Partnership basis differences			398				593				—				—
Other			(127	)			(40	)			(10	)			(76	)
Total net deferred income tax liabilities		$	6,372			$	5,784			$	2,913			$	2,628
Deferred Investment Tax Credits – Regulated Operations			286				169				270				151
Total Deferred Taxes and Deferred Investment Tax Credits		$	6,658			$	5,953			$	3,183			$	2,779

At December 31, 2021, Dominion Energy had the following deductible loss and credit carryforwards:

		Deductible				Deferred				Valuation				Expiration
		Amount				Tax Asset				Allowance				Period
(millions)
Federal losses		$	965			$	203			$	—			2037
Federal investment credits		—					752			—				2036-2041
Federal production and other credits		—					63			—				2036-2041
State losses			4,583				243				(50	)		2022-2041
State minimum tax credits		—					214			—				No expiration
State investment and other credits		—					129				(90	)		2022-2031
Total		$	5,548			$	1,604			$	(140	)

At December 31, 2021, Virginia Power had the following deductible loss and credit carryforwards:

		Deductible				Deferred				Valuation				Expiration
		Amount				Tax Asset				Allowance				Period
(millions)
Federal losses		$	—			$	—			$	—
Federal investment credits		—					467			—				2036-2041
Federal production and other credits		—					62			—				2036-2041
State investment and other credits		—					8				(6	)		2024
Total		$	—			$	537			$	(6	)

A reconciliation of changes in the Companies’ unrecognized tax benefits follows:

		Dominion Energy														Virginia Power
		2021				2020				2019						2021				2020				2019
(millions)
Balance at January 1		$	167			$	175			$	44					$	—			$	—			$	2
Acquired unrecognized tax benefits			—				—				129			(1	)		—				—				—
Increases-prior period positions			48				18				—						—				—				—
Decreases-prior period positions			(59	)			(19	)			—						—				—				—
Increases-current period positions			2				1				9						—				—				—
Settlements with tax authorities			(26	)			—				(7	)					—				—				(2	)
Expiration of statutes of limitations			(4	)			(8	)			—						—				—				—
Balance at December 31		$	128			$	167			$	175					$	-			$	—			$	-

(1)	Acquired unrecognized tax benefits reflect $106 million plus increases in prior period positions of $76 million and decreases in prior period positions of $53 million that were recorded through purchase accounting.

Certain unrecognized tax benefits, or portions thereof, if recognized, would affect the effective tax rate. Changes in these unrecognized tax benefits may result from remeasurement of amounts expected to be realized, settlements with tax authorities and expiration of statutes of limitations. For Dominion Energy and its subsidiaries, these unrecognized tax benefits were $72 million, $140 million and $141 million at December 31, 2021, 2020 and 2019, respectively. In discontinued operations, these unrecognized tax benefits were $33 million at December 31, 2021. For Dominion Energy, the change in these unrecognized tax benefits decreased income tax expense by $34 million and $6 million in 2021 and 2020, respectively, and increased income tax expense by $3 million in 2019. For discontinued operations, the change in these unrecognized tax benefits increased income tax expense by $5 million in 2020 and decreased income tax expense by less than $1 million 2019. For Virginia Power, these unrecognized tax benefits were less than $1 million at December 31, 2019. For Virginia Power, the change in these unrecognized tax benefits decreased income tax expense by $2 million in 2019.

Dominion Energy participates in the IRS Compliance Assurance Process which provides the opportunity to resolve complex tax matters with the IRS before filing its federal income tax returns, thus achieving certainty for such tax return filing positions agreed to by the IRS. The IRS has completed its audit of tax years through 2019. The statute of limitations has not yet expired for years after 2017. Although Dominion Energy has not received a final letter indicating no changes to its taxable income for tax year 2020, no material adjustments are expected. The IRS examination of tax year 2021 is ongoing.

It is reasonably possible that settlement negotiations and expiration of statutes of limitations could result in a decrease in unrecognized tax benefits in 2022 by up to $23 million for Dominion Energy. If such changes were to occur, other than revisions of the accrual for interest on tax underpayments and overpayments, earnings could increase by up to $9 million for Dominion Energy. Otherwise, with regard to 2021 and prior years, the Companies cannot estimate the range of reasonably possible changes to unrecognized tax benefits that may occur in 2022.

For each of the major states in which Dominion Energy operates, the earliest tax year remaining open for examination is as follows:

		Earliest
		Open Tax
State		Year
Pennsylvania(1)		2012
Connecticut		2018
Virginia(2)		2018
Utah		2018
South Carolina		2018

	(1)	Considered a major state for entities presented in discontinued operations.

	(2)	Considered a major state for Virginia Power’s operations

The Companies are also obligated to report adjustments resulting from IRS settlements to state tax authorities. In addition, if Dominion Energy utilizes operating losses or tax credits generated in years for which the statute of limitations has expired, such amounts are generally subject to examination.

NOTE 6. FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. However, the use of a mid-market pricing convention (the mid-point between bid and ask prices) is permitted. Fair values are based on assumptions that market participants would use when pricing an asset or liability, including assumptions about risk and the risks inherent in valuation techniques and the inputs to valuations. This includes not only the credit standing of counterparties involved and the impact of credit enhancements but also the impact of the Companies’ own nonperformance risk on their liabilities. Fair value measurements assume that the transaction occurs in the principal market for the asset or liability (the market with the most volume and activity for the asset or liability from the perspective of the reporting entity), or in the absence of a principal market, the most advantageous market for the asset or liability (the market in which the reporting entity would be able to maximize the amount received or minimize the amount paid). Dominion Energy applies fair value measurements to certain assets and liabilities including commodity, interest rate and/or foreign currency exchange rate derivative instruments, and other investments including those held in nuclear decommissioning, rabbi, and pension and other postretirement benefit plan trusts, in accordance with the requirements discussed above. Virginia Power applies fair value measurements to certain assets and liabilities including commodity, interest rate and/or foreign currency exchange rate derivative instruments and other investments including those held in the nuclear decommissioning trust, in accordance with the requirements discussed above. The Companies apply credit adjustments to their derivative fair values in accordance with the requirements described above.

Inputs and Assumptions

Fair value is based on actively-quoted market prices, if available. In the absence of actively-quoted market prices, price information is sought from external sources, including industry publications, and to a lesser extent, broker quotes. When evaluating pricing information provided by Designated Contract Market settlement pricing, other pricing services, or brokers, the Companies consider the ability to transact at the quoted price, i.e. if the quotes are based on an active market or an inactive market and to the extent which pricing models are used, if pricing is not readily available. If pricing information from external sources is not available, or if the Companies believe that observable pricing is not indicative of fair value, judgment is required to develop the estimates of fair value. In those cases the unobservable inputs are developed and substantiated using historical information, available market data, third-party data and statistical analysis. Periodically, inputs to valuation models are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships and changes in third-party sources.

For options and contracts with option-like characteristics where observable pricing information is not available from external sources, the Companies generally use a modified Black-Scholes Model that considers time value, the volatility of the underlying commodities and other relevant assumptions when estimating fair value. The Companies use other option models under special circumstances, including but not limited to Spread Approximation Model and a Swing Option Model. For contracts with unique characteristics, the Companies may estimate fair value using a discounted cash flow approach deemed appropriate in the circumstances and applied consistently from period to period. For individual contracts, the use of different valuation models or assumptions could have a significant effect on the contract’s estimated fair value.

The inputs and assumptions used in measuring fair value include the following:

For commodity derivative contracts:

	•	Forward commodity prices

	•	Transaction prices

	•	Price volatility

	•	Price correlation

	•	Volumes

	•	Commodity location

	•	Interest rates

	•	Credit quality of counterparties and the Companies

	•	Credit enhancements

	•	Time value

For interest rate derivative contracts:

	•	Interest rate curves

	•	Credit quality of counterparties and the Companies

	•	Notional value

	•	Credit enhancements

	•	Time value

For foreign currency exchange rate derivative contracts:

	•	Foreign currency forward exchange rates

	•	Interest rates

	•	Credit quality of counterparties and the Companies

	•	Notional value

	•	Time value

For investments:

	•	Quoted securities prices and indices

	•	Securities trading information including volume and restrictions

	•	Maturity

	•	Interest rates

	•	Credit quality of counterparties and the Companies

Levels

The Companies also utilize the following fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three broad levels:

	•	Level 1—Quoted prices (unadjusted) in active markets for identical assets and liabilities that they have the ability to access at the measurement date. Instruments categorized in Level 1 primarily consist of financial instruments such as certain exchange-traded derivatives, and exchange-listed equities, U.S. and international equity securities, mutual funds and certain Treasury securities held in nuclear decommissioning trust funds for the Companies and benefit plan trust funds and rabbi trust funds for Dominion Energy.

	•	Level 2—Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable for the asset or liability, including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived from observable market data by correlation or other means. Instruments categorized in Level 2 primarily include commodity forwards and swaps, interest rate swaps, foreign currency exchange rate instruments and cash and cash equivalents, corporate debt instruments, government securities and other fixed income investments held in nuclear decommissioning trust funds for the Companies and benefit plan trust funds and rabbi trust funds for Dominion Energy.

	•	Level 3—Unobservable inputs for the asset or liability, including situations where there is little, if any, market activity for the asset or liability. Instruments categorized in Level 3 for the Companies consist of long-dated commodity derivatives, FTRs, certain natural gas options and other modeled commodity derivatives.

The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. In these cases, the lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability. Alternative investments, consisting of investments in partnerships, joint ventures and other alternative investments held in nuclear decommissioning and benefit plan trust funds, are generally valued using NAV based on the proportionate share of the fair value as determined by reference to the most recent audited fair value financial statements or fair value statements provided by the investment manager adjusted for any significant events occurring between the investment manager’s and the Companies’ measurement date. Alternative investments recorded at NAV are not classified in the fair value hierarchy.

Transfers out of Level 3 represent assets and liabilities that were previously classified as Level 3 for which the inputs became observable for classification in either Level 1 or Level 2. Because the activity and liquidity of commodity markets vary substantially between regions and time periods, the availability of observable inputs for substantially the full term and value of the Companies’ over-the-counter derivative contracts is subject to change.

Level 3 Valuations

The Companies enter into certain physical and financial forwards, futures, options and swaps, which are considered Level 3 as they have one or more inputs that are not observable and are significant to the valuation. The discounted cash flow method is used to value Level 3 physical and financial forwards and futures contracts. An option model is used to value Level 3 physical options. The discounted cash flow model for forwards and futures calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return, and credit spreads. The option model calculates mark-to-market valuations using variations of the Black-Scholes option model. The inputs into the models are the forward market prices, implied price volatilities, risk-free rate of return, the option expiration dates, the option strike prices, the original sales prices and volumes. For Level 3 fair value measurements, certain forward market prices and implied price volatilities are considered unobservable.

The following table presents Dominion Energy’s quantitative information about Level 3 fair value measurements at December 31, 2021. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.

		Fair Value (millions)				Valuation Techniques		Unobservable Input			Range		Weighted Average(1)
Assets
Physical and financial forwards:
Natural gas(2)		$	54			Discounted cash flow		Market price (per Dth)	(3)		(2)-8			(1	)
FTRs			51			Discounted cash flow		Market price (per MWh)	(3)		(2)-11			2
Electricity			120			Discounted cash flow		Market price (per MWh)	(3)		28-72			43
Physical options:
Natural gas			5			Option model		Market price (per Dth)	(3)		3-9			6
								Price volatility	(4)		19% - 27%			24	%
Total assets		$	230
Liabilities
Physical and financial forwards:
Natural gas(2)		$	3			Discounted cash flow		Market price (per Dth)	(3)		(2)-4			(1	)
FTRs			5			Discounted cash flow		Market price (per MWh)	(3)		(3)-7			1
Total liabilities		$	8

(1)	Averages weighted by volume.

(2)	Includes basis.

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

(4)	Represents volatilities unrepresented in published markets.

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

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

Nonrecurring Fair Value Measurements

Dominion Energy

See Note 3 for information on the nonrecurring fair value measurement associated with the acquisition of Birdseye. See Note 9 for information regarding nonrecurring fair value measurements associated with Dominion Energy’s retained noncontrolling interest in Cove Point, charges related to Fowler Ridge and Dominion Energy’s retained noncontrolling interest in businesses and assets contributed to Wrangler. See Note 10 for information regarding an impairment charge recorded associated with non-wholly-owned nonregulated solar facilities in partnerships.

In 2021, Dominion Energy recorded a charge of $20 million ($15 million after-tax) in impairment of assets and other charges in its Consolidated Statements of Income (reflected in the Corporate and Other segment) to write off substantially all of the long-lived assets of its nonregulated retail software development operations to their estimated fair value, using a market approach, of less than $1 million. The valuation is considered a Level 2 fair value measurement given that it is based on bids received.

In 2021, Dominion Energy recorded a charge of $16 million ($12 million after-tax) in impairment of assets and other charges in its Consolidated Statements of Income to adjust a corporate office building down to its estimated fair value, using both an income and market approach, of $26 million. The valuation is considered a Level 3 measurement due to the use of significant judgmental and unobservable inputs, including projected timing and amount of future cash flows and discount rates inherent in the future cash flows and market prices. The corporate office building is reflected in the Corporate and Other segment and presented as held for sale in Dominion Energy’s Consolidated Balance Sheets at December 31, 2021.

Recurring Fair Value Measurements

Fair value measurements are separately disclosed by level within the fair value hierarchy with a separate reconciliation of fair value measurements categorized as Level 3. Fair value disclosures for assets held in Dominion Energy’s pension and other postretirement benefit plans are presented in Note 22.

Dominion Energy

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

		Level 1				Level 2				Level 3				Total
(millions)
December 31, 2021
Assets
Derivatives:
Commodity		$	—			$	52			$	230			$	282
Interest rate			—				323				—				323
Foreign currency exchange rate			—				8				—				8
Investments(1):
Equity securities:
U.S.			5,241				—				—				5,241
Fixed income:
Corporate debt instruments			—				881				—				881
Government securities			199				1,256				—				1,455
Cash equivalents and other			(29	)			—				—				(29	)
Total assets		$	5,411			$	2,520			$	230			$	8,161
Liabilities
Derivatives:
Commodity		$	—			$	461			$	8			$	469
Interest rate			—				399				—				399
Total liabilities		$	—			$	860			$	8			$	868
December 31, 2020
Assets
Derivatives:
Commodity		$	—			$	57			$	110			$	167
Interest rate			—				230				—				230
Investments(1):
Equity securities:
U.S.			4,648				—				—				4,648
Fixed income:
Corporate debt instruments			—				629				—				629
Government securities			508				730				—				1,238
Cash equivalents and other			32				15				—				47
Total assets		$	5,188			$	1,661			$	110			$	6,959
Liabilities
Derivatives:
Commodity		$	—			$	48			$	7			$	55
Interest rate			—				431				—				431
Total liabilities		$	—			$	479			$	7			$	486

(1)	Includes investments held in the nuclear decommissioning trusts and rabbi trusts. Excludes $366 million and $340 million of assets at December 31, 2021 and 2020, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

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

		2021				2020				2019
(millions)
Balance at January 1,		$	103			$	(37	)		$	64
Total realized and unrealized gains (losses):
Included in earnings:
Operating Revenue			(9	)			—				(1	)
Electric fuel and other energy-related purchases			10				(33	)			(22	)
Purchased gas			—				—				2
Discontinued operations			—				1				—
Included in regulatory assets/liabilities			119				140				(90	)
Settlements			(10	)			33				17
Purchases			—				—				(10	)
Sales			—				(1	)			6
Transfers out of Level 3			9				—				(3	)
Balance at December 31,		$	222			$	103			$	(37	)

There were no unrealized gains and losses included in earnings in the Level 3 fair value category relating to assets/liabilities still held at the reporting date for the years ended December 31, 2021, 2020 and 2019.

Virginia Power

The following table presents Virginia Power’s quantitative information about Level 3 fair value measurements at December 31, 2021. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.

		Fair Value (millions)				Valuation Techniques		Unobservable Input			Range		Weighted Average(1)
Assets
Physical and financial forwards:
Natural gas(2)		$	54			Discounted cash flow		Market price (per Dth)	(3)		(2)-6			(1	)
FTRs			51			Discounted cash flow		Market price (per MWh)	(3)		(2)-11			2
Physical options:
Natural gas			5			Option model		Market price (per Dth)	(3)		3-9			6
								Price volatility	(4)		19% - 27%			24	%
Total assets		$	110
Liabilities
Physical and financial forwards:
Natural gas(2)		$	3			Discounted cash flow		Market price (per Dth)	(3)		(2)-4			(1	)
FTRs			5			Discounted cash flow		Market price (per MWh)	(3)		(3)-7			1
Total liabilities		$	8

(1)	Averages weighted by volume.

(2)	Includes basis.

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

(4)	Represents volatilities unrepresented in published markets.

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

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

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

		Level 1				Level 2				Level 3				Total
(millions)
December 31, 2021
Assets
Derivatives:
Commodity		$	—			$	36			$	110			$	146
Interest rate			—				146				—				146
Foreign currency exchange rate			—				8				—				8
Investments(1):
Equity securities:
U.S.			2,420				—				—				2,420
Fixed income:
Corporate debt instruments			—				531				—				531
Government securities			93				506				—				599
Cash equivalents and other			(3	)			—				—				(3	)
Total assets		$	2,510			$	1,227			$	110			$	3,847
Liabilities
Derivatives:
Commodity		$	—			$	125			$	8			$	133
Interest rate			—				337				—				337
Total liabilities		$	—			$	462			$	8			$	470
December 31, 2020
Assets
Derivatives:
Commodity		$	—			$	5			$	110			$	115
Interest rate			—				66				—				66
Investments(1):
Equity securities:
U.S.			2,171				—				—				2,171
Fixed income:
Corporate debt instruments			—				348				—				348
Government securities			201				309				—				510
Cash equivalents and other			13				—				—				13
Total assets		$	2,385			$	728			$	110			$	3,223
Liabilities
Derivatives:
Commodity		$	—			$	22			$	7			$	29
Interest rate			—				376				—				376
Total liabilities		$	—			$	398			$	7			$	405

(1)	Includes investments held in the nuclear decommissioning trusts. Excludes $185 million and $167 million of assets at December 31, 2021 and 2020, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

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

		2021				2020				2019
(millions)
Balance at January 1,		$	103			$	(37	)		$	60
Total realized and unrealized gains (losses):
Included in earnings:
Electric fuel and other energy-related purchases			4				(33	)			(22	)
Included in regulatory assets/liabilities			(1	)			140				(88	)
Settlements			(4	)			33				13
Balance at December 31,		$	102			$	103			$	(37	)

There were no unrealized gains and losses included in earnings in the Level 3 fair value category relating to assets/liabilities still held at the reporting date for the years ended December 31, 2021, 2020 and 2019.

Fair Value of Financial Instruments

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

December 31,		2021								2020
		Carrying Amount				Estimated Fair Value(1)				Carrying Amount				Estimated Fair Value(1)
(millions)
Dominion Energy
Long-term debt(2)(3)		$	35,996			$	40,947			$	31,996			$	38,773
Supplemental 364-Day credit facility borrowings			—				—				225				225
Junior subordinated notes(4)			1,386				1,470				3,411				3,633
Virginia Power
Long-term debt(4)		$	13,753			$	16,021			$	13,207			$	16,455

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

(2)	Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs and discount or premium. At December 31, 2021 and December 31, 2020, the carrying amount includes the valuation of certain fair value hedges associated with fixed rate debt of $2 million and $3 million, respectively.

(3)	Includes amounts classified as held for sale at December 31, 2020, see Note 3.

(4)	Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium.

NOTE 7. DERIVATIVES AND HEDGE ACCOUNTING ACTIVITIES

See Note 2 for the Companies’ accounting policies, objectives, and strategies for using derivative instruments. See Note 6 for further information about fair value measurements and associated valuation methods for derivatives.

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

In general, most over-the-counter transactions and all exchange contracts are subject to collateral requirements. Types of collateral for over-the-counter and exchange contracts include cash, letters of credit, and in some cases, other forms of security, none of which are subject to restrictions. Cash collateral is used in the table below to offset derivative assets and liabilities. In February 2022, Dominion Energy entered into contracts representing offsetting positions to certain existing exchange contracts with collateral requirements as

well as new over-the-counter transactions that are not subject to collateral requirements. These contracts resulted in positions which limit the risk of increased cash collateral requirements. Certain accounts receivable and accounts payable recognized on the Companies’ Consolidated Balance Sheets, letters of credit and other forms of securities, as well as certain other long-term debt, all of which are not included in the tables below, are subject to offset under master netting or similar arrangements and would reduce the net exposure. See Note 18 for further information regarding other long-term debt, in the form of restructured derivatives, subject to offset under master netting or similar agreements. See Note 24 for further information regarding credit-related contingent features for the Companies derivative instruments.

Dominion Energy

Balance Sheet Presentation

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

		December 31, 2021																December 31, 2020
		Gross Amounts Not Offset in the Consolidated Balance Sheet																Gross Amounts Not Offset in the Consolidated Balance Sheet
		Gross Assets Presented in the Consolidated Balance Sheet(1)				Financial Instruments				Cash Collateral Received				Net Amounts				Gross Assets Presented in the Consolidated Balance Sheet(1)				Financial Instruments				Cash Collateral Received				Net Amounts
(millions)
Commodity contracts:
Over-the-counter		$	153			$	13			$	—			$	140			$	117			$	9			$	—			$	108
Exchange			9				7				—				2				49				24				—				25
Interest rate contracts:
Over-the-counter			323				49				—				274				230				13				—				217
Foreign currency exchange rate contracts:
Over-the-counter			8				—				—				8				—				—				—				—
Total derivatives, subject to a master netting or similar arrangement		$	493			$	69			$	—			$	424			$	396			$	46			$	—			$	350

(1)	Excludes $120 million and $1 million of derivative assets at December 31, 2021 and 2020, respectively, which are not subject to master netting or similar arrangements.

		December 31, 2021																December 31, 2020
		Gross Amounts Not Offset in the Consolidated Balance Sheet																Gross Amounts Not Offset in the Consolidated Balance Sheet
		Gross Liabilities Presented in the Consolidated Balance Sheet				Financial Instruments				Cash Collateral Paid				Net Amounts				Gross Liabilities Presented in the Consolidated Balance Sheet(1)				Financial Instruments				Cash Collateral Paid				Net Amounts
(millions)
Commodity contracts:
Over-the-counter		$	95			$	13			$	54			$	28			$	30			$	9			$	—			$	21
Exchange			374				7				367				—				24				24				—				—
Interest rate contracts:
Over-the-counter			399				49				11				339				431				13				17				401
Total derivatives, subject to a master netting or similar arrangement		$	868			$	69			$	432			$	367			$	485			$	46			$	17			$	422

(1)	Excludes $1 million of derivative liabilities at December 31, 2020 which are not subject to master netting or similar arrangements.

Volumes

The following table presents the volume of Dominion Energy’s derivative activity as of December 31, 2021. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of their long and short positions.

		Current				Noncurrent
Natural Gas (bcf):
Fixed price(1)			34				5
Basis			156				446
Electricity (MWh in millions):
Fixed price			15				31
FTRs			44				—
Interest rate(2) (in millions)		$	1,537			$	9,859
Foreign currency exchange rate(2) (in millions)		501 kr.				4,581 kr.

(1) Includes options.

(2)	Maturity is determined based on final settlement period.

AOCI

The following table presents selected information related to losses on cash flow hedges included in AOCI in Dominion Energy’s Consolidated Balance Sheets at December 31, 2021:

		AOCI After-Tax				Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax				Maximum Term
(millions)
Interest rate		$	(358	)		$	(40	)		396 months
Total		$	(358	)		$	(40	)

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

Fair Value Hedges

For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in current earnings and presented in the same line item. There were no derivative instruments designated as fair value hedges during the twelve months ended December 31, 2021 and 2020. Gains and losses on derivative fair value hedge relationships were immaterial for the year ended December 31, 2019.

The following table presents the amounts recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges all of which related to discontinued hedging relationships at both December 31, 2021 and 2020, respectively:

		Carrying Amount of the Hedged Asset (Liability)								Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Assets (Liabilities)
		December 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
(millions)
Long-term debt		$	(352	)		$	(1,153	)		$	(2	)		$	(3	)

Fair Value and Gains and Losses on Derivative Instruments

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

		Fair Value – Derivatives under Hedge Accounting				Fair Value – Derivatives not under Hedge Accounting				Total Fair Value
(millions)
At December 31, 2021
ASSETS
Current Assets
Commodity		$	—			$	103			$	103
Interest rate			1				17				18
Foreign currency exchange rate			—				1				1
Total current derivative assets(1)			1				121				122
Noncurrent Assets
Commodity			—				179				179
Interest rate			145				160				305
Foreign currency exchange rate			—				7				7
Total noncurrent derivative assets(2)			145				346				491
Total derivative assets		$	146			$	467			$	613
LIABILITIES
Current Liabilities
Commodity		$	—			$	304			$	304
Interest rate			42				13				55
Total current derivative liabilities(3)			42				317				359
Noncurrent Liabilities
Commodity			—				165				165
Interest rate			295				49				344
Total noncurrent derivative liabilities(4)			295				214				509
Total derivative liabilities		$	337			$	531			$	868
At December 31, 2020
ASSETS
Current Assets
Commodity		$	—			$	58			$	58
Interest rate			—				9				9
Total current derivative assets(1)			—				67				67
Noncurrent Assets
Commodity			—				109				109
Interest rate			66				155				221
Total noncurrent derivative assets(2)			66				264				330
Total derivative assets		$	66			$	331			$	397
LIABILITIES
Current Liabilities
Commodity		$	—			$	42			$	42
Interest rate			363				10				373
Total current derivative liabilities(3)			363				52				415
Noncurrent Liabilities
Commodity			—				13				13
Interest rate			19				39				58
Total noncurrent derivative liabilities(4)			19				52				71
Total derivative liabilities		$	382			$	104			$	486

(1)	At December 31, 2021, all current derivative assets are presented in other current assets in Dominion Energy’s Consolidated Balance Sheets. At December 31, 2020, $63 million is included in other current assets and the remainder is recorded in current assets held for sale.

(2)	A**t December 31, 2021, all noncurrent derivative assets are presented in other deferred charges and other assets in Dominion Energy’s Consolidated Balance Sheets*.* At *December 31, 2020, $*330 million is included in other deferred charges and other assets and the remainder is recorded in noncurrent assets held for sale.

(3)	At December 31, 2021, all current derivative liabilities are presented in other current liabilities in Dominion Energy’s Consolidated Balance Sheets. At December 31, 2020, $412 million is included in other current liabilities and the remainder is recorded in current liabilities held for sale.

(4)	At December 31, 2021, all noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Dominion Energy’s Consolidated Balance Sheets. At December 31, 2020, $71 million is included in other deferred credits and other liabilities and the remainder is recorded in noncurrent liabilities held for sale.

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

Derivatives in cash flow hedging relationships		Amount of Gain (Loss) Recognized in AOCI on Derivatives(1)				Amount of Gain (Loss) Reclassified From AOCI to Income				Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2)
(millions)
Year Ended December 31, 2021
Derivative type and location of gains (losses):
Commodity(3):						$	(1	)
Interest rate(4)		$	21				(60	)		$	135
Total		$	21			$	(61	)		$	135
Year Ended December 31, 2020
Derivative type and location of gains (losses):
Commodity:
Operating revenue						$	25
Purchased gas							(4	)
Discontinued operations							2
Total commodity		$	—			$	23			$	—
Interest rate:
Interest and related charges						$	(83	)
Discontinued operations							(236	)
Total interest rate		$	(309	)		$	(319	)		$	(332	)
Foreign currency exchange rate(5)			(11	)			(6	)			—
Total		$	(320	)		$	(302	)		$	(332	)
Year Ended December 31, 2019
Derivative type and location of gains (losses):
Commodity:
Operating revenue						$	142
Purchased gas							(3	)
Discontinued operations							4
Total commodity		$	125			$	143			$	—
Interest rate:
Interest and related charges						$	(49	)
Discontinued operations							(5	)
Total interest rate		$	(252	)		$	(54	)		$	(255	)
Foreign currency exchange rate(5)			(18	)			(6	)			—
Total		$	(145	)		$	83			$	(255	)

(1)	Amounts deferred into AOCI have no associated effect in Dominion Energy’s Consolidated Statements of Income.

(2)	Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion Energy’s Consolidated Statements of Income.

(3)	Amounts recorded in Dominion Energy’s Consolidated Statements of Income are classified in purchased gas.

(4)	Amounts recorded in Dominion Energy’s Consolidated Statements of Income are classified in interest and related charges.

(5)	Amounts recorded in Dominion Energy’s Consolidated Statements of Income are classified in discontinued operations.

Derivatives not designated as hedging instruments		Amount of Gain (Loss) Recognized in Income on Derivatives(1)
Year Ended December 31,		2021				2020				2019
(millions)
Derivative type and location of gains (losses):
Commodity:
Operating revenue		$	(487	)		$	73			$	41
Purchased gas			(1	)			(20	)			(22	)
Electric fuel and other energy-related purchases			16				(104	)			(46	)
Discontinued operations			—				(11	)			(2	)
Interest rate:
Interest and related charges			97				87				3
Discontinued operations			—				5				—
Foreign currency exchange rate:
Discontinued operations			—				12				—
Total		$	(375	)		$	42			$	(26	)

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

Virginia Power

Balance Sheet Presentation

The tables below present Virginia Power’s derivative asset and liability balances by type of financial instrument, if the gross amounts recognized in its Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid:

		December 31, 2021																December 31, 2020
		Gross Amounts Not Offset in the Consolidated Balance Sheet																Gross Amounts Not Offset in the Consolidated Balance Sheet
		Gross Assets Presented in the Consolidated Balance Sheet(1)				Financial Instruments				Cash Collateral Received				Net Amounts				Gross Assets Presented in the Consolidated Balance Sheet(1)				Financial Instruments				Cash Collateral Received				Net Amounts
(millions)
Commodity contracts:
Over-the-counter		$	110			$	8			$	—			$	102			$	111			$	6			$	—			$	105
Exchange			7				7				—				—				1				1				—				—
Interest rate contracts:
Over-the-counter			146				20				—				126				66				7				—				59
Foreign currency exchange rate contracts:
Over-the-counter			8				—				—				8				—				—				—				—
Total derivatives, subject to a master netting or similar arrangement		$	271			$	35			$	—			$	236			$	178			$	14			$	—			$	164

(1)	Excludes $29 million and $3 million of derivative assets at December 31, 2021 and 2020, respectively, which are not subject to master netting or similar arrangements.

		December 31, 2021																December 31, 2020
		Gross Amounts Not Offset in the Consolidated Balance Sheet																Gross Amounts Not Offset in the Consolidated Balance Sheet
		Gross Liabilities Presented in the Consolidated Balance Sheet(1)				Financial Instruments				Cash Collateral Paid				Net Amounts				Gross Liabilities Presented in the Consolidated Balance Sheet(1)				Financial Instruments				Cash Collateral Paid				Net Amounts
(millions)
Commodity contracts:
Over-the-counter		$	84			$	8			$	54			$	22			$	6			$	6			$	—			$	—
Exchange			43				7				36				—				1				1				—				—
Interest rate contracts:
Over-the-counter			337				20				—				317				376				7				—				369
Total derivatives, subject to a master netting or similar arrangement		$	464			$	35			$	90			$	339			$	383			$	14			$	—			$	369

(1)	Excludes $6 million and $22 million of derivative liabilities at December 31, 2021 and 2020, respectively, which are not subject to master netting or similar arrangements.

Volumes

The following table presents the volume of Virginia Power’s derivative activity at December 31, 2021. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of their long and short positions.

		Current				Noncurrent
Natural Gas (bcf):
Fixed price(1)			24				5
Basis			139				440
Electricity (MWh in millions):
Fixed price			6				7
FTRs			44				—
Interest rate(2) (in millions)		$	1,000			$	1,750
Foreign currency exchange rate(2) (in millions)		501 kr.				4,581 kr.

(1)	Includes options.

(2)	Maturity is determined based on final settlement period.

AOCI

The following table presents selected information related to losses on cash flow hedges included in AOCI in Virginia Power’s Consolidated Balance Sheets at December 31, 2021:

		AOCI After-Tax				Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax				Maximum Term
(millions)
Interest rate		$	(45	)		$	(2	)		396 months
Total		$	(45	)		$	(2	)

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

Fair Value and Gains and Losses on Derivative Instruments

The following tables present the fair values of Virginia Power’s derivatives and where they are presented in its Consolidated Balance Sheets:

		Fair Value – Derivatives under Hedge Accounting				Fair Value – Derivatives not under Hedge Accounting				Total Fair Value
(millions)
At December 31, 2021
ASSETS
Current Assets
Commodity		$	—			$	74			$	74
Interest rate			1				—				1
Foreign currency exchange rate			—				1				1
Total current derivative assets(1)			1				75				76
Noncurrent Assets
Commodity			—				72				72
Interest rate			145				—				145
Foreign currency exchange rate			—				7				7
Total noncurrent derivative assets(2)			145				79				224
Total derivative assets		$	146			$	154			$	300
LIABILITIES
Current Liabilities
Commodity		$	—			$	92			$	92
Interest rate			42				—				42
Total current derivative liabilities			42				92				134
Noncurrent Liabilities
Commodity			—				41				41
Interest rate			295				—				295
Total noncurrent derivatives liabilities(3)			295				41				336
Total derivative liabilities		$	337			$	133			$	470
At December 31, 2020
ASSETS
Current Assets
Commodity		$	—			$	22			$	22
Total current derivative assets(1)			—				22				22
Noncurrent Assets
Commodity			—				93				93
Interest rate			66				—				66
Total noncurrent derivative assets(2)			66				93				159
Total derivative assets		$	66			$	115			$	181
LIABILITIES
Current Liabilities
Commodity		$	—			$	28			$	28
Interest rate			362				—				362
Total current derivative liabilities			362				28				390
Noncurrent Liabilities
Commodity			—				1				1
Interest rate			14				—				14
Total noncurrent derivatives liabilities(3)			14				1				15
Total derivative liabilities		$	376			$	29			$	405

(1)	Current derivative assets are presented in other current assets in Virginia Power’s Consolidated Balance Sheets.

(2)	Noncurrent derivative assets are presented in other deferred charges and other assets in Virginia Power’s Consolidated Balance Sheets.

(3)	Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Virginia Power’s Consolidated Balance Sheets.

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

Derivatives in cash flow hedging relationships		Amount of Gain (Loss) Recognized in AOCI on Derivatives(1)				Amount of Gain (Loss) Reclassified From AOCI to Income				Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2)
(millions)
Year Ended December 31, 2021
Derivative type and location of gains (losses):
Interest rate(3)		$	17			$	(3	)		$	130
Total		$	17			$	(3	)		$	130
Year Ended December 31, 2020
Derivative type and location of gains (losses):
Interest rate(3)		$	(37	)		$	(2	)		$	(338	)
Total		$	(37	)		$	(2	)		$	(338	)
Year Ended December 31, 2019
Derivative type and location of gains (losses):
Interest rate(3)		$	(30	)		$	(1	)		$	(259	)
Total		$	(30	)		$	(1	)		$	(259	)

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

(2)	Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income.

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

Derivatives not designated as hedging instruments		Amount of Gain (Loss) Recognized in Income on Derivatives(1)
Year Ended December 31,		2021				2020				2019
(millions)
Derivative type and location of gains (losses):
Commodity:
Operating revenue		$	(62	)		$	(104	)		$	(45	)
Electric fuel and other energy-related purchases			9				—				—
Total		$	(53	)		$	(104	)		$	(45	)

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

NOTE 8. EARNINGS PER SHARE

The following table presents the calculation of Dominion Energy’s basic and diluted EPS:

		2021				2020				2019
(millions, except EPS)
Net income attributable to Dominion Energy from continuing operations		$	2,647			$	1,583			$	653
Preferred stock dividends (see Note 19)			(68	)			(65	)			(17	)
Net income attributable to Dominion Energy from continuing operations - Basic			2,579				1,518				636
Dilutive effect of Series A Preferred Stock			—				(11	)			(28	)
Net income attributable to Dominion Energy from continuing operations - Diluted			2,579			$	1,507			$	608
Net income (loss) attributable to Dominion Energy from discontinued operations - Basic & Diluted			641			$	(1,984	)		$	705
Average shares of common stock outstanding – Basic			807.8				831.0				808.8
Net effect of dilutive securities(1)			0.7				—				0.1
Average shares of common stock outstanding – Diluted			808.5				831.0				808.9
EPS from continuing operations - Basic		$	3.19			$	1.83			$	0.79
EPS from discontinued operations - Basic			0.79				(2.39	)			0.87
EPS attributable to Dominion Energy - Basic		$	3.98			$	(0.56	)		$	1.66
EPS from continuing operations - Diluted			3.19			$	1.82			$	0.75
EPS from discontinued operations - Diluted			0.79				(2.39	)			0.87
EPS attributable to Dominion Energy - Diluted		$	3.98			$	(0.57	)		$	1.62

	(1)	Dilutive securities for 2021 consist primarily of stock expected to be issued to satisfy the obligation under a settlement agreement with the SCDOR (applying the if converted method) as well as forward sales agreements entered into in November 2021 (applying the treasury stock method). See Notes 20 and 23 for additional information.

The 2019 Equity Units, the Q-Pipe Transaction deposit, prior to being settled in cash in July 2021 and the 2016 Equity Units, prior to being settled via stock issuances in August 2019, are potentially dilutive instruments. See Notes 3, 18 and 19 for additional information.

The forward stock purchase contracts included within the 2019 Equity Units were excluded from the calculation of diluted EPS from continuing operations for the years ended December 31, 2021, 2020 and 2019 as the dilutive stock price threshold was not met. The Series A Preferred Stock included within the 2019 Equity Units is excluded from the effect of dilutive securities within diluted EPS from continuing operations, but a fair value adjustment is reflected within net income attributable to Dominion Energy from continuing operations for the calculation of diluted EPS from continuing operations for the years ended December 31, 2020 and 2019, based upon the expectation that the conversion will be settled in cash rather than through the issuance of Dominion Energy common stock. As described in Note 19, effective November 2021 any settlement of the conversion up to $1,000 per share is payable in cash, and any amount in excess of $1,000 per share may be settled in cash, common stock or a combination thereof. For the year ended December 31, 2021, a fair value adjustment related to the Series A Preferred Stock included within the 2019 Equity Units is excluded from the calculation of diluted EPS from continuing operations, as such fair value adjustment was not dilutive during the period.

The impact of settling the deposit associated with the Q-Pipe Transaction in shares is excluded from the calculation for the years ending December 31, 2021 and 2020 based upon the expectation Dominion Energy would settle in cash, which occurred in July 2021, rather than through the issuance of shares of Dominion Energy common stock.

The 2016 Equity Units were potentially dilutive securities but were excluded from the calculation of diluted EPS from continuing operations for year ended December 31, 2019 as the dilutive stock price threshold was not met.

NOTE 9. INVESTMENTS

Dominion Energy

Equity and Debt Securities

Rabbi Trust Securities

Equity and fixed income securities and cash equivalents in Dominion Energy’s rabbi trusts and classified as trading totaled $122 million and $134 million at December 31, 2021 and 2020, respectively.

Decommissioning Trust Securities

Dominion Energy holds equity and fixed income securities, insurance contracts and cash equivalents in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Dominion Energy’s decommissioning trust funds are summarized below:

		Amortized Cost				Total Unrealized Gains				Total Unrealized Losses				Allowance for Credit Losses				Fair Value
(millions)
December 31, 2021
Equity securities:(1)
U.S.		$	1,567			$	3,734			$	(13	)						$	5,288
Fixed income securities:(2)
Corporate debt instruments			854				32				(5	)		$	—				881
Government securities			1,382				43				(7	)			—				1,418
Common/collective trust funds			168				4				—				—				172
Insurance contracts			255				—				—								255
Cash equivalents and other(3)			9				2				(75	)			—				(64	)
Total		$	4,235			$	3,815			$	(100	)	(4)	$	—			$	7,950
December 31, 2020
Equity securities:(1)
U.S.		$	1,756			$	2,948			$	(24	)						$	4,680
Fixed income securities:(2)
Corporate debt instruments			572				58				(1	)		$	—				629
Government securities			1,119				66				(1	)			—				1,184
Common/collective trust funds			170				5				—				—				175
Insurance contracts			237				—				—								237
Cash equivalents and other(3)			(8	)			4				(1	)			—				(5	)
Total		$	3,846			$	3,081			$	(27	)	(4)	$	—			$	6,900

(1)	Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.

(2)	Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability as discussed in Note 2. Changes in allowance for credit losses are included in other income.

(3)	Includes pending purchases of securities of $35 million and $49 million at December 31, 2021 and 2020, respectively.

(4)	The fair value of securities in an unrealized loss position was $883 million and $293 million at December 31, 2021 and 2020, respectively.

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

Year Ended December 31,		2021				2020				2019
(millions)
Net gains (losses) recognized during the period		$	1,072			$	512			$	919
Less: Net gains recognized during the period on securities sold during the period			(346	)			(16	)			(80	)
Unrealized gains (losses) recognized during the period on securities still held at period end(1)		$	726			$	496			$	839

(1)	Included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.

The fair value of Dominion Energy’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at December 31, 2021 by contractual maturity is as follows:

		Amount
(millions)
Due in one year or less		$	331
Due after one year through five years			642
Due after five years through ten years			630
Due after ten years			868
Total		$	2,471

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

Year Ended December 31,		2021				2020				2019
(millions)
Proceeds from sales		$	3,985			$	4,278			$	1,712
Realized gains(1)			441				340				195
Realized losses(1)			91				297				96

(1)	Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability as discussed in Note 2.

Virginia Power

Virginia Power holds equity and fixed income securities and cash equivalents in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power’s decommissioning trust funds are summarized below:

		Amortized Cost				Total Unrealized Gains				Total Unrealized Losses				Allowance for Credit Losses				Fair Value
(millions)
December 31, 2021
Equity securities:(1)
U.S.		$	841			$	1,720			$	(11	)						$	2,550
Fixed income securities:(2)
Corporate debt instruments			517				17				(3	)		$	—				531
Government securities			584				16				(2	)			—				598
Common/collective trust funds			53				—				—				—				53
Cash equivalents and other(3)			2				—				—				—				2
Total		$	1,997			$	1,753			$	(16	)	(4)	$	—			$	3,734
December 31, 2020
Equity securities:(1)
U.S.		$	929			$	1,371			$	(21	)						$	2,279
Fixed income securities:(2)
Corporate debt instruments			315				33				—			$	—				348
Government securities			484				25				—				—				509
Common/collective trust funds			58				—				—				—				58
Cash equivalents and other(3)			3				—				—				—				3
Total		$	1,789			$	1,429			$	(21	)	(4)	$	—			$	3,197

(1)	Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2

(2)	Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability as discussed in Note 2. Changes in allowance for credit losses are included in other income.

(3)	Includes pending sales of securities of $5 million at December 31, 2021, and pending purchases of securities of $10 million at December 31, 2020.

(4)	The fair value of securities in an unrealized loss position was $425 million and $142 million at December 31, 2021 and 2020, respectively.

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

Year Ended December 31,		2021				2020				2019
(millions)
Net gains (losses) recognized during the period		$	552			$	224			$	423
Less: Net gains recognized during the period on securities sold during the period			(190	)			(6	)			(20	)
Unrealized gains (losses) recognized during the period on securities still held at end of period (1)		$	362			$	218			$	403

(1)	Included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.

The fair value of Virginia Power’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at December 31, 2021, by contractual maturity is as follows:

		Amount
(millions)
Due in one year or less		$	78
Due after one year through five years			335
Due after five years through ten years			361
Due after ten years			408
Total		$	1,182

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

Year Ended December 31,		2021				2020				2019
(millions)
Proceeds from sales		$	1,791			$	884			$	858
Realized gains(1)			228				88				58
Realized losses(1)			35				68				22

(1)	Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability as discussed in Note 2.

EQUITY METHOD INVESTMENTS

Investments that Dominion Energy accounts for under the equity method of accounting are as follows:

						Investment
Company		Ownership%				Balance								Description
As of December 31,						2021				2020
(millions)
Cove Point			50	%		$	2,738			$	2,784			LNG import/export and storage facility
Atlantic Coast Pipeline			53	%			—		(3)		—		(3)	Gas transmission system
Wrangler			15	%	(2)		68				74			Nonregulated retail energy marketing
Align RNG(1)			50	%			74				25			Renewable natural gas
Other		various					52				51
Total						$	2,932			$	2,934

(1)	Dominion Energy’s unfunded commitment to be made to Align RNG by the end of 2022 was $8 million and $59 million at December 31, 2021 and 2020, respectively. The commitment was fully paid in January 2022.

(2)	Dominion Energy’s ownership interest became 15% in December 2021, following the sale of 5% of its ownership interest. See discussion below.

(3)	Dominion Energy’s Consolidated Balance Sheets include a liability associated with its investment in Atlantic Coast Pipeline of $113 million and $1.1 billion at December 31, 2021 and 2020, respectively. See discussion below for additional information.

Dominion Energy recorded equity earnings on its investments of $276 million, $40 million and $8 million in 2021, 2020 and 2019, respectively, in its Consolidated Statements of Income. In addition, Dominion Energy recorded equity earnings (losses) of $(20) million, $(2.3) billion and $117 million in 2021, 2020 and 2019, respectively, in discontinued operations related to its investment in Atlantic Coast Pipeline. Dominion Energy received distributions from these investments of $328 million, $102 million and $38 million in 2021, 2020 and 2019, respectively. As of December 31, 2021 and 2020, the net difference between the carrying amount of Dominion Energy’s investments and its share of underlying equity in net assets was $244 million and $213 million, respectively. At December 31, 2021, these differences are comprised of $27 million of equity method goodwill that is not being amortized, $221 million basis difference from Dominion Energy’s investment in Cove Point, which is being amortized over the useful lives of the underlying assets and a net $(4) million basis difference primarily attributable to an unfunded commitment made to Align RNG. At December 31, 2020, these differences are comprised of $27 million of equity method goodwill that is not being amortized, $227 million basis difference from Dominion Energy’s investment in Cove Point, which is being amortized over the useful lives of the underlying assets and a net $(41) million basis difference primarily attributable to an unfunded commitment made to Align RNG.

Cove Point

Prior to January 2019, Dominion Energy owned all of the common equity interest in Cove Point except for a preferred equity interest held by Dominion Energy Midstream (entitled to the first $50 million of annual cash distributions by Cove Point), in which Dominion Energy owned a controlling financial interest and consolidated. As discussed in Note 20, Dominion Energy acquired all of the outstanding partnership interests of Dominion Energy Midstream not owned by Dominion Energy in January 2019. In December 2019, Dominion Energy closed on an agreement to sell a 25% noncontrolling limited partnership interest in Cove Point. In November 2020, in conjunction with the GT&S Transaction, Dominion Energy sold 100% of its general partner interest and 25% of the total limited partner interest in Cove Point. Dominion Energy retained a 50% noncontrolling limited partnership interest in Cove Point which is accounted for as an equity method investment as Dominion Energy has the ability to exercise significant influence over, but not control, Cove Point. See Note 3 for further information regarding the sales of interests in Cove Point.

Income before income taxes recorded by Cove Point for 2021, 2020 and 2019 was $528 million, $511 million and $471 million, respectively. For the periods prior to closing of the GT&S Transaction, earnings attributable to Dominion Energy are presented in discontinued operations. Subsequent to the closing of the GT&S Transaction, earnings attributable to Dominion Energy are presented within earnings from equity method investees in its Consolidated Statements of Income. In 2020, earnings attributable to Dominion Energy of $40 million are presented within earnings from equity method investees in its Consolidated Statements of Income.

Dominion Energy recorded distributions from Cove Point of $300 million and $70 million in 2021 and 2020 (after the date of disposal), respectively. Dominion Energy made no contributions to Cove Point in 2021 or 2020 (after the date of disposal).

All activity relating to Dominion Energy’s noncontrolling interest in Cove Point is recorded within Contracted Assets. See Note 3 for further information regarding the GT&S Transaction.

Atlantic Coast Pipeline

In September 2014, Dominion Energy, along with Duke Energy and Southern, announced the formation of Atlantic Coast Pipeline for the purpose of constructing an approximately 600-mile natural gas pipeline running from West Virginia through Virginia to North Carolina. Subsidiaries and affiliates of Dominion Energy, Duke Energy and Southern had planned to be customers of the pipeline under 20-year contracts.

In March 2020, Dominion Energy completed the acquisition from Southern of its 5% membership interest in Atlantic Coast Pipeline and its 100% ownership interest in Pivotal LNG, Inc., for $184 million in aggregate, subject to certain purchase price adjustments. Pivotal LNG, Inc. includes a 50% noncontrolling interest in JAX LNG. Following completion of the acquisition, Dominion Energy owns a 53% noncontrolling membership interest in Atlantic Coast Pipeline with Duke Energy owning the remaining interest.

Atlantic Coast Pipeline continues to be accounted for as an equity method investment as the power to direct the activities most significant to Atlantic Coast Pipeline is shared with Duke Energy. As a result, Dominion Energy has the ability to exercise significant influence, but not control, over the investee.

The Atlantic Coast Pipeline Project had been the subject of challenges in federal courts including, among others, challenges of the Atlantic Coast Pipeline Project’s biological opinion and incidental take statement, permits providing right of way crossings of certain federal lands, the Army Corps of Engineers 404 permit, the air permit for a compressor station at Buckingham, Virginia, and the FERC order approving the CPCN. Each of these challenges alleged non-compliance on the part of federal and state permitting authorities and adverse ecological consequences if the Atlantic Coast Pipeline Project was permitted to proceed. Since December 2018, notable developments in these challenges included a stay in December 2018 issued by the U.S. Court of Appeals for the Fourth Circuit and the same court’s July 2019 vacatur of the biological opinion and incidental take statement (which stay and subsequent vacatur halted most project construction activity), the U.S. Court of Appeals for the Fourth Circuit decisions vacating the permits to cross certain federal forests and the air permit for a compressor station at Buckingham, Virginia, the U.S. Court of Appeals for the Fourth Circuit’s remand to the Army Corps of Engineers of Atlantic Coast Pipeline’s Huntington District 404 verification and the U.S.

Court of Appeals for the Fourth Circuit’s remand to the National Park Service of Atlantic Coast Pipeline’s Blue Ridge Parkway right-of-way. In June 2019, the Solicitor General of the U.S. and Atlantic Coast Pipeline filed petitions requesting that the Supreme Court of the U.S. hear the case regarding the Appalachian Trail crossing and in June 2020, the Supreme Court of the U.S. ruled in favor of the Atlantic Coast Pipeline, reversing the lower court’s decision and remanding the case back to the U.S. Court of Appeals for the Fourth Circuit.

The project also faced new and serious challenges from uncertainty related to NWP 12, specifically, from the decision of the U.S. District Court for the District of Montana in April 2020 vacating an NWP 12 issued by the Army Corps of Engineers, including among other things gas pipelines, followed by a U.S. Court of Appeals for the Ninth Circuit ruling in May 2020 denying a stay of that decision. In July 2020, the Supreme Court of the U.S. issued an order allowing other new oil and gas pipeline projects to use the NWP 12 process pending appeal to the U.S. Court of Appeals for the Ninth Circuit; however, that did not decrease the uncertainty associated with an eventual ruling. The Montana district court decision was viewed as likely to prompt similar challenges in other federal circuit courts related to permits issued under NWP 12, including for the Atlantic Coast Pipeline Project.

In July 2020, as a result of ongoing permitting delays, growing legal uncertainties and the need to incur significant capital expenditures to maintain project timing before such uncertainties could be resolved, Dominion Energy and Duke Energy announced the cancellation of the Atlantic Coast Pipeline Project.

Dominion Energy recorded equity method earnings (losses) of $(2.3) billion ($(1.8) billion after-tax) for the year ended December 31, 2020, as a result of the determination of the probable abandonment of the Atlantic Coast Pipeline Project in June 2020, and $(20) million ($(14) million after-tax) and $117 million ($118 million after-tax) for the year ended December 31, 2021 and 2019, respectively. In connection with Dominion Energy’s decision to sell substantially all of its gas transmission and storage operations, Dominion Energy has reflected the results of its equity method investment in Atlantic Coast Pipeline as discontinued operations in its Consolidated Statements of Income. As a result of its share of equity losses exceeding its investment Dominion Energy’s Consolidated Balance Sheets at December 31, 2021 and 2020 includes a liability of $113 million and $1.1 billion, respectively, which reflects Dominion Energy’s obligations to Atlantic Coast Pipeline related to its credit facility, through February 2021, and AROs. ‌

In October 2017, Dominion Energy entered into a guarantee agreement to support a portion of Atlantic Coast Pipeline’s obligation under a $3.4 billion revolving credit facility with a stated maturity date of October 2021. In July 2020, the capacity of the revolving credit facility was reduced from $3.4 billion to $1.9 billion. In February 2021, Atlantic Coast Pipeline repaid the outstanding borrowed amounts and terminated its revolving credit facility. Concurrently, Dominion Energy’s related guarantee agreement to support its portion of the Atlantic Coast Pipeline’s borrowings was also terminated. As of December 31, 2020, Atlantic Coast Pipeline had borrowed $1.8 billion against the revolving credit facility. Dominion Energy’s Consolidated Balance Sheets include a liability of $6 million associated with this guarantee agreement at December 31, 2020. The $1.1 billion liability at December 31, 2020 discussed above includes a $48 million adjustment related to this guarantee agreement that is reflected within equity as a cumulative effect of a change in accounting principle upon adoption of the new credit loss standard in January 2020.

Dominion Energy recorded contributions of $965 million, $107 million and $186 million during 2021, 2020 and 2019, respectively, to Atlantic Coast Pipeline.

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

DETI provided services to Atlantic Coast Pipeline which totaled $49 million and $103 million in 2020 (prior to closing of the GT&S Transaction) and 2019, respectively, included in discontinued operations in Dominion Energy’s Consolidated Statements of Income.

All activity relating to Atlantic Coast Pipeline is recorded within the Corporate and Other segment.

Blue Racer

In December 2018, Dominion Energy sold its 50% limited partnership interest in Blue Racer for up-front cash consideration of $1.05 billion and additional consideration of $150 million, subject to increase for interest costs effective March 2019, payable upon the purchaser’s availability of cash. In the first quarter of 2019, Dominion Energy received $151 million of additional consideration, including applicable interest, in connection with this sale. In addition, the purchaser agreed to pay additional consideration contingent upon the achievement of certain financial performance milestones of Blue Racer from 2019 through 2021. Blue Racer did not achieve the 2019, 2020 or 2021 financial performance milestones set forth in the sale agreement.

All activity relating to Blue Racer is recorded within the Corporate and Other segment.

Fowler Ridge

In September 2020, Dominion Energy sold its 50% noncontrolling partnership interest in Fowler Ridge to BP and terminated an affiliate’s long-term power, capacity and renewable energy credit contract with Fowler Ridge for a net payment by Dominion Energy of $150 million. The $150 million payment was allocated between the contract termination and sale based on the relative fair value of each using an income approach. The fair value determinations for the payment allocations are considered Level 3 fair value measurements due to the use of significant judgmental and unobservable inputs, including the amount of future cash flows and discount rate reflecting risks inherent in the future cash flows and market prices. Dominion Energy recognized a loss of $221 million ($165 million after-tax) on the contract termination, included in impairment of assets and other charges in its Consolidated Statements of Income for the year ended December 31, 2020, reflected in the Corporate and Other segment.

All activity relating to Fowler Ridge, unless otherwise specified, is recorded within Contracted Assets.

Wrangler

In September 2019, Dominion Energy entered into an agreement to form Wrangler, a partnership with Interstate Gas Supply, Inc. Wrangler will operate a nonregulated natural gas retail energy marketing business with Dominion Energy contributing its nonregulated retail energy marketing operations and Interstate Gas Supply, Inc. contributing cash. At December 31, 2021 Dominion Energy has a 15% noncontrolling ownership interest in Wrangler, which is accounted for as an equity method investment as Dominion Energy has the ability to exercise significant influence, but not control, over the investee.

The initial contribution, consisting of SEMI, closed in December 2019 for which Dominion Energy received $301 million in cash proceeds and a 20% noncontrolling ownership interest in Wrangler with an initial fair value of $75 million estimated using the market approach. This valuation is considered a Level 2 fair value measurement given that it is based on the agreed-upon sales price. In connection with the transaction, Dominion Energy recorded a gain of $147 million, net of a $73 million write-off of goodwill, presented in losses (gains) on sales of assets, and an associated tax expense of $82 million, in the Consolidated Statements of Income for the year ended December 31, 2019.

The second contribution, consisting of certain nonregulated natural gas retail energy contracts, closed in November 2020 for which Dominion Energy received $74 million in cash proceeds and retained a 20% noncontrolling ownership interest through its ownership interest in Wrangler in the contracts valued at $13 million using the market approach. This valuation is considered a Level 2 fair value measurement given that it is based on the agreed-upon sales price. In connection with the transaction, Dominion Energy recorded a gain of $64 million presented in losses (gains) on sales of assets, and an associated tax expense of $19 million, in the Consolidated Statements of Income for the year ended December 31, 2020.

The final contribution, consisting of Dominion Energy’s remaining nonregulated natural gas retail energy marketing operations, closed in December 2021 for which Dominion Energy received $127 million in cash proceeds and retained a 20% noncontrolling ownership interest in Wrangler with an initial fair value of $23 million estimated using the market approach. This valuation is considered a Level 2 fair value measurement given that it is based on the agreed-upon sales price. In connection with the transaction, Dominion Energy recorded a gain of $87 million, net of a $14 million write-off of goodwill, presented in losses (gains) on sales of assets, and an associated tax expense of $32 million, in the Consolidated Statements of Income for the year ended December 31, 2021.

Subsequently in December 2021, Dominion Energy sold 5% of its noncontrolling ownership interest in Wrangler to Interstate Gas Supply, Inc. for $33 million and recorded a gain of $10 million, presented in other income, and an associated tax expense of $3 million, in the Consolidated Statements of Income for the year ended December 31, 2021.

At December 31, 2020, $63 million of assets and $15 million of liabilities associated with the remaining nonregulated retail energy marketing operations contributed to Wrangler in December 2021 were classified as held for sale and were included in current assets held for sale and current liabilities held for sale on Dominion Energy’s Consolidated Balance Sheets, respectively. The related disposal group is primarily comprised of customer receivables, goodwill, inventories and account payables.

All activity relating to Wrangler is recorded within the Corporate and Other segment.

Dominion Privatization

In February 2022, Dominion Energy entered into an agreement to form Dominion Privatization, a partnership with Patriot. Dominion Privatization, through its wholly-owned subsidiaries, will maintain and operate electric and gas distribution infrastructure under service concession arrangements with certain U.S. military installations. Under the agreement, Dominion Energy will contribute its existing privatization operations, excluding contracts held by DESC, in South Carolina, Texas, Pennsylvania and Virginia and Patriot will contribute cash. The contribution of the service concession arrangements currently held by Virginia Power requires approval from the Virginia and North Carolina Commissions. Dominion Energy expects to receive cash proceeds totaling $168 million, subject to customary closing adjustments, and a 50% noncontrolling ownership interest in Dominion Privatization following closing of the contributions expected to occur by the end of 2022, contingent on clearance or approval under the Hart-Scott-Rodino Act and other customary closing and regulatory conditions. Dominion Energy expects to recognize gains totaling approximately $150 million ($110 million after-tax) upon closing of the contributions. Dominion Energy’s 50% noncontrolling ownership interest in Dominion Privatization will be accounted for as an equity method investment as Dominion Energy has the ability to exercise significant influence, but not control, over the investee.

All activity relating to Dominion Privatization will be recorded within Dominion Energy Virginia.

NOTE 10. PROPERTY, PLANT AND EQUIPMENT

Major classes of property, plant and equipment and their respective balances for the Companies are as follows:

At December 31,		2021				2020
(millions)
Dominion Energy
Utility:
Generation		$	23,378			$	22,697
Transmission			15,430				14,351
Distribution			28,953				27,311
Storage			455				436
Nuclear fuel			2,306				2,283
General and other			4,373				4,130
Plant under construction			3,898				3,350
Total utility			78,793				74,558
Non-jurisdictional - including plant under construction			1,694				1,225
Nonutility:
Nonregulated generation-nuclear			1,773				1,736
Nonregulated generation-solar			2,026				3,268
Nuclear fuel			1,056				1,012
Other-including plant under construction			1,161				1,160
Total nonutility			6,016				7,176
Total property, plant and equipment		$	86,503			$	82,959
Virginia Power
Utility:
Generation		$	17,325			$	16,769
Transmission			11,760				11,000
Distribution			13,621				12,839
Nuclear fuel			1,702				1,709
General and other			912				845
Plant under construction			2,865				2,338
Total utility			48,185				45,500
Non-jurisdictional - including plant under construction			1,694				1,225
Other			11				11
Total property, plant and equipment		$	49,890			$	46,736

Jointly-Owned Power Stations

The Companies proportionate share of jointly-owned power stations at December 31, 2021 is as follows:

		Bath County Pumped Storage Station(1)				North Anna Units 1 and 2(1)				Clover Power Station(1)				Millstone Unit 3(2)				Summer Unit 1 (2)
(millions, except percentages)
Ownership interest			60	%			88.4	%			50	%			93.5	%			66.7	%
Plant in service			1,063				2,532				610				1,353				1,522
Accumulated depreciation			(714	)			(1,381	)			(273	)			(522	)			(699	)
Nuclear fuel			—				730				—				549				603
Accumulated amortization of nuclear fuel			—				(576	)			—				(406	)			(387	)
Plant under construction			6				178				1				127				76

(1)	Units jointly owned by Virginia Power.

(2)	Unit jointly owned by Dominion Energy.

The co-owners are obligated to pay their share of all future construction expenditures and operating costs of the jointly-owned facilities in the same proportion as their respective ownership interest. The Companies report their share of operating costs in the appropriate operating expense (electric fuel and other energy-related purchases, other operations and maintenance, depreciation, depletion and amortization and other taxes, etc.) in the Consolidated Statements of Income.

Acquisition of Solar Projects

The following table presents acquisitions by Virginia Power of solar projects. Virginia Power has claimed or expects to claim federal investment tax credits on the projects.

Project Name		Date Agreement Entered		Date Agreement Closed		Project Location		Project Cost (millions(1)]				Date of Commercial Operations		MW Capacity
Gutenberg		September 2017		June 2019		North Carolina			142			September 2019			80
Gloucester		June 2018		February 2019		Virginia			37			April 2019			20
Grasshopper(2)		August 2018		May 2019		Virginia			128			October 2020			80
Chestnut		August 2018		May 2019		North Carolina			127			January 2020			75
Ft. Powhatan		June 2019		June 2019		Virginia			267			January 2022			150
Belcher(3)		June 2019		August 2019		Virginia			164			June 2021			88
Bedford		August 2019		November 2019		Virginia			106			November 2021			70
Maplewood		October 2019		October 2019		Virginia			185			Expected 2022			120
Rochambeau		December 2019		January 2020		Virginia			35			December 2021			20
Pumpkinseed		May 2020		May 2020		Virginia			130			Expected 2022			60
Bookers Mill		February 2021		June 2021		Virginia			200			Expected 2023			127

(1)	Includes acquisition costs.

(2)	Referred to as Butcher Creek once placed in service.

(3)	Referred to as Desper once placed in service.

The following table presents acquisitions by Dominion Energy of solar projects in addition to the Virginia Power solar projects presented above. Dominion Energy has claimed or expects to claim federal investment tax credits on the projects.

Project Name		Date Agreement Entered		Date Agreement Closed		Project Location		Project Cost (millions)(1)				Date of Commercial Operations		MW Capacity
Greensville		August 2019		August 2019		Virginia		$	127			December 2020			80
Myrtle		August 2019		August 2019		Virginia			32			June 2020			15
Seabrook		September 2019		September 2019		South Carolina			103			December 2019			72
Wilkinson		November 2019		November 2019		North Carolina			153			December 2019			74
Blackville		May 2020		May 2020		South Carolina			12			December 2020			7
Denmark		May 2020		May 2020		South Carolina			14			December 2020			6
Yemassee		May 2020		August 2020		South Carolina			17			January 2021			10
Trask		May 2020		October 2020		South Carolina			22			March 2021			12
Hardin I		June 2020		June 2020		Ohio			240			Split(2)			150
Madison		July 2020		July 2020		Virginia			125			Expected 2023			62
Hardin II		August 2020		Expected 2022		Ohio			295			Expected 2023			150

(1) Includes acquisition costs.

(2) In December 2020 and January 2021, 97 MW and 53 MW of the project commenced commercial operations, respectively.

In addition to the facilities discussed above, Dominion Energy has also entered into various agreements to install solar facilities, primarily at schools in Virginia. As of December 31, 2021, Dominion Energy had placed in service solar facilities with an aggregate generation capacity of 17 MW at a cost of $34 million and anticipates placing additional facilities in service by the end of 2022 with an estimated total projected cost of approximately $30 million and an aggregate generation capacity of 15 MW. Dominion Energy has claimed or expects to claim federal investment tax credits on the projects.

Acquisition of Gathering and Processing Assets

In March 2020, Wexpro closed on an agreement with a natural gas gathering systems operator to purchase existing natural gas gathering systems including pipelines, compressors and dehydration equipment for total consideration of $38 million. These facilities gather natural gas in Colorado, Utah and Wyoming.

In November 2021, Wexpro closed on an agreement with a natural gas gathering systems operator to purchase an existing natural gas gathering system in Wyoming including pipelines, compressors and dehydration equipment for total consideration of $41 million.

Non-Wholly-Owned Nonregulated Solar Facilities

Sale to Terra Nova Renewable Partners

In August 2021, Dominion Energy entered into an agreement with Terra Nova Renewable Partners to sell SBL Holdco, which held Dominion Energy’s 67% controlling interest in certain nonregulated solar projects for consideration of $456 million, subject to customary closing adjustments, with the amount of cash reduced by the amount of SBL Holdco’s debt outstanding at closing. The sale was contingent on clearance or approval under the Hart-Scott-Rodino Act and by FERC as well as other customary closing and regulatory conditions. In September 2021, the waiting period under the Hart-Scott-Rodino Act expired and in October 2021, FERC approved the proposed sale. In December 2021, the transaction closed and Dominion Energy recorded a gain of $19 million ($15 million after-tax) in losses (gains) on sales of assets in its Consolidated Statements of Income (reflected in the Corporate and Other segment). Except as specifically identified, all activity related to SBL Holdco is recorded within Contracted Assets.

Sale to Clearway

In August 2021, Dominion Energy entered an agreement with Clearway to sell its 50% controlling interest in Four Brothers and Three Cedars for $335 million in cash, subject to customary closing adjustments. The transaction was contingent on clearance or approval under the Hart-Scott-Rodino Act and by FERC as well as other customary closing and regulatory conditions. In October 2021, the waiting period under the Hart-Scott-Rodino Act expired. In December 2021, the transaction closed and Dominion Energy recorded a loss of $229 million ($176 million after-tax) in losses (gains) on sales of assets in its Consolidated Statements of Income (reflected in the Corporate and Other segment), primarily associated with the derecognition of noncontrolling interest. Except as specifically identified, all activity related to Four Brothers and Three Cedars is recorded within Contracted Assets.

Impairment

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 VCEA and Dominion Energy’s decision to sell substantially all of its gas transmission and storage operations. Based on an evaluation of

Dominion Energy’s interests in these long-lived assets for recoverability under a probability weighted approach, Dominion Energy determined the assets were impaired. As a result of this evaluation, 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 (reflected in the Corporate and Other segment) for the year ended December 31, 2020 to adjust the property, plant and equipment down to its estimated fair value of $1.4 billion. The fair value was estimated using an income approach. The valuation is considered a Level 3 fair value measurement due to the use of significant judgmental and unobservable inputs, including projected timing and amount of future cash flows and discount rates reflecting risks inherent in the future cash flows and market prices.

Virginia Power CCRO Utilization

In 2021, Virginia Power wrote off $318 million, primarily to accumulated depreciation, representing the utilization of a CCRO in accordance with the GTSA in connection with the settlement of the 2021 Triennial Review. See Note 13 for additional information.

NOTE 11. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The changes in Dominion Energy’s carrying amount and segment allocation of goodwill are presented below:

		Dominion Energy Virginia				Gas Distribution				Dominion Energy South Carolina				Contracted Assets				Corporate and Other			Total
(millions)
Dominion Energy
Balance at December 31, 2019(1)		$	2,106			$	3,512			$	1,521			$	242			$	14		$	7,395
Contribution to Wrangler(2)			—				—				—				—				(14	)		(14	)
Balance at December 31, 2020(1)		$	2,106			$	3,512			$	1,521			$	242			$	—		$	7,381
Acquisition of Birdseye (3)			—				—				—				24				—			24
Balance at December 31, 2021(1)		$	2,106			$	3,512			$	1,521			$	266			$	—		$	7,405

(1) Goodwill amounts do not contain any accumulated impairment losses.

(2) See Note 9 for additional information including amounts reclassified to held for sale at December 31, 2020.

(3) See Note 3 for more information.

Other Intangible Assets

The Companies’ other intangible assets are subject to amortization over their estimated useful lives. Dominion Energy’s amortization expense for intangible assets was $79 million, $69 million and $95 million for 2021, 2020 and 2019, respectively. In 2021, Dominion Energy acquired $311 million of intangible assets, primarily representing RGGI allowances and software, with an estimated weighted-average amortization period of approximately 7 years. Amortization expense for Virginia Power’s intangible assets was $31 million, $28 million and $30 million for 2021, 2020 and 2019, respectively. In 2021, Virginia Power acquired $276 million of intangible assets, primarily representing RGGI allowances and software, with an estimated weighted-average amortization period of 7 years.

The components of intangible assets are as follows:

		2021								2020
At December 31,		Gross Carrying Amount				Accumulated Amortization				Gross Carrying Amount				Accumulated Amortization
(millions)
Dominion Energy
Software, licenses and other(1)		$	1,459			$	675			$	1,295			$	530
Virginia Power
Software, licenses and other(1)		$	685			$	290			$	482			$	148

(1)	Includes $158M of RGGI allowances purchased and consumed in 2021, with deferral to a regulatory asset.

Annual amortization expense for these intangible assets is estimated to be as follows:

		2022			2023			2024			2025			2026
(millions)
Dominion Energy		$	72		$	58		$	50		$	42		$	28
Virginia Power		$	29		$	23		$	20		$	16		$	9

NOTE 12. REGULATORY ASSETS AND LIABILITIES

Regulatory assets and liabilities include the following:

At December 31,		2021				2020
(millions)
Dominion Energy
Regulatory assets:
Deferred cost of fuel used in electric generation(1)		$	251			$	—
Deferred project costs and DSM programs for gas utilities(2)			53				35
Unrecovered gas costs(3)			191				78
Deferred rider costs for Virginia electric utility(4)			72				98
Ashpond and landfill closure costs(5)			193				—
Deferred nuclear refueling outage costs(6)			79				53
NND Project costs(7)			138				138
PJM transmission rates(8)			7				71
Deferred early plant retirement charges(9)			226				—
Derivatives(10)			112				33
Other			170				193
Regulatory assets-current			1,492				699
Unrecognized pension and other postretirement benefit costs(11)			548				1,363
Deferred rider costs for Virginia electric utility(4)			489				311
Deferred project costs for gas utilities(2)			675				632
Interest rate hedges(12)			899				1,042
AROs and related funding(13)			329				331
Cost of reacquired debt(14)			10				245
NND Project costs(7)			2,226				2,364
Ash pond and landfill closure costs(5)			2,223				2,301
Deferred cost of fuel used in electric generation(1)			409				—
Deferred early plant retirement charges(9)			226				—
Other			609				544
Regulatory assets-noncurrent			8,643				9,133
Total regulatory assets		$	10,135			$	9,832
Regulatory liabilities:
Deferred cost of fuel used in electric generation(1)		$	—			$	58
Provision for future cost of removal and AROs(15)			181				183
Reserve for refunds and rate credits to electric utility customers(16)			420				128
Reserve for future credits to Virginia electric customers(17)			—				120
Income taxes refundable through future rates(18)			153				124
Monetization of guarantee settlement(19)			67				67
Commodity derivatives(10)			55				9
Other			110				120
Regulatory liabilities-current			986				809
Income taxes refundable through future rates(18)			4,260				4,376
Provision for future cost of removal and AROs(15)			2,331				2,150
Nuclear decommissioning trust(20)			2,158				1,719
Monetization of guarantee settlement(19)			831				903
Reserve for refunds and rate credits to electric utility customers(16)			448				540
Unrecognized pension and other postretirement benefit costs(11)			200				66
Overrecovered other postretirement benefit costs(21)			105				111
Other			380				322
Regulatory liabilities-noncurrent			10,713				10,187
Total regulatory liabilities		$	11,699			$	10,996

	(1)	Reflects deferred fuel expenses for the Virginia, North Carolina and South Carolina jurisdictions of Dominion Energy’s electric generation operations.

	(2)	Primarily reflects amounts expected to be collected from or owed to gas customers in Dominion Energy’s service territories associated with current and prospective rider projects, including CEP, PIR and pipeline integrity management. See Note 13 for more information.

	(3)	Reflects unrecovered gas costs at regulated gas operations, which are recovered through filings with the applicable regulatory authority.

	(4)	Reflects deferrals under Virginia Power’s electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects. See Note 13 for more information.

	(5)	Primarily reflects legislation enacted in Virginia in 2019 which requires any CCR asset located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through beneficial reuse. These deferred costs are expected to be collected over a period between 15 and 18 years commencing December 2021 through Rider CCR. Virginia Power is entitled to collect carrying costs on uncollected expenditures once expenditures have been made. See Note 13 for additional information.

	(6)	Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months.

	(7)	Reflects expenditures by DESC associated with the NND Project, which pursuant to the SCANA Merger Approval Order, will be recovered from DESC electric service customers over a 20-year period ending in 2039. See Note 3 for more information.

	(8)	Reflects current portion of amounts to be recovered through retail rates in Virginia for payments Virginia Power expects to make to PJM through 2026 under the terms of a FERC settlement agreement in May 2018 resolving a PJM cost allocation matter.‌

	(9)	Reflects amounts from the early retirements of certain coal- and oil-fired generating units to be amortized through 2023 in accordance with the settlement of the 2021 Triennial Review. See Note 13 for additional information.

	(10)	For jurisdictions subject to cost-based rate regulation, changes in the fair value of derivative instruments result in the recognition of regulatory assets or regulatory liabilities as they are expected to be recovered from or refunded to customers.

	(11)	Represents unrecognized pension and other postretirement employee benefit costs expected to be recovered or refunded through future rates generally over the expected remaining service period of plan participants by certain of Dominion Energy's rate-regulated subsidiaries.

	(12)	Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted-average useful life of approximately 27 years as of December 31, 2021.

	(13)	Represents deferred depreciation and accretion expense related to legal obligations associated with the future retirement of generation, transmission and distribution properties. The AROs primarily relate to DESC’s electric generating facilities, including Summer, and are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 105 years.

	(14)	In 2021, DESC recorded a charge of $237 million ($178 million after-tax) in impairment of assets and other charges, reflected in the Corporate and Other segment, to write-off the balance of a regulatory asset that is no longer probable of recovery under the settlement agreement approved in DESC’s retail electric base rate case. See Note 13 for more information.

	(15)	Rates charged to customers by Dominion Energy’s regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement. Reflects an increase of $66 million associated with the revision of certain gas distribution pipeline AROs in the third quarter of 2021. See Note 14 for more information.

	(16)	Reflects amounts previously collected from retail electric customers of DESC for the NND Project to be credited over an estimated 11-year period effective February 2019, in connection with the SCANA Merger Approval Order. See Notes 3 and 13 for more information. Also reflects amounts to be refunded to jurisdictional retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review. See Note 13 for additional information.

	(17)	Represents a reserve related to the expected use of a CCRO in accordance with the GTSA associated with the 2021 Triennial Review. See Note 13 for additional information.

	(18)	Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will primarily reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity.

	(19)	Reflects amounts to be refunded to DESC electric service customers over a 20-year period ending in 2039 associated with the monetization of a bankruptcy settlement agreement. See Note 3 for more information.

	(20)	Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon, as applicable) for the future decommissioning of Dominion Energy’s utility nuclear generation stations, in excess of the related AROs.

	(21)	Reflects a regulatory liability for the collection of postretirement benefit costs allowed in rates in excess of expense incurred.

At December 31,		2021				2020
(millions)
Virginia Power
Regulatory assets:
Deferred cost of fuel used in electric generation(1)		$	131			$	—
Deferred rider costs(2)			72				98
Ash pond and landfill closure costs(3)			193				—
Deferred nuclear refueling outage costs(4)			79				53
PJM transmission rates(5)			7				71
Deferred early plant retirement charges(6)			226				—
Derivatives(7)			105				40
Other			37				33
Regulatory assets-current			850				295
Deferred rider costs(2)			489				311
Interest rate hedges(8)			604				733
Ash pond and landfill closure costs(3)			2,223				2,301
Deferred cost of fuel used in electric generation(1)			409				—
Deferred early plant retirement charges(6)			226				—
Other			179				164
Regulatory assets-noncurrent			4,130				3,509
Total regulatory assets		$	4,980			$	3,804
Regulatory liabilities:
Deferred cost of fuel used in electric generation(1)		$	—			$	58
Provision for future cost of removal(9)			154				152
Reserve for refunds to Virginia electric customers(10)			306				—
Reserve for future credits to Virginia electric customers(11)			—				120
Income taxes refundable through future rates(12)			63				54
Derivatives(7)			51				8
Other			73				33
Regulatory liabilities-current			647				425
Income taxes refundable through future rates(12)			2,335				2,404
Nuclear decommissioning trust(13)			2,158				1,719
Provision for future cost of removal(9)			1,043				980
Deferred cost of fuel used in electric generation(1)			—				54
Reserve for refunds to Virginia electric customers(10)			25				—
Other			179				181
Regulatory liabilities-noncurrent			5,740				5,338
Total regulatory liabilities		$	6,387			$	5,763

	(1)	Reflects deferred fuel expenses for the Virginia and North Carolina jurisdictions of Virginia Power’s generation operations.

	(2)	Reflects deferrals under Virginia Power’s electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects. See Note 13 for more information.

	(3)	Primarily reflects legislation enacted in Virginia in 2019 which requires any CCR asset located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through beneficial reuse. These deferred costs are expected to be collected over a period between 15 and 18 years commencing December 2021 through Rider CCR. Virginia Power is entitled to collect carrying costs on uncollected expenditures once expenditures have been made. See Note 13 for additional information.

	(4)	Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months.

	(5)	Reflects current portion of amounts to be recovered through retail rates in Virginia for payments Virginia Power expects to make to PJM through 2026 under the terms of a FERC settlement agreement in May 2018 resolving a PJM cost allocation matter.

	(6)	Reflects amounts from the early retirement of certain coal- and oil-fired generating units to be amortized through 2023 in accordance with the settlement of the 2021 Triennial Review. See Note 13 for more information.

	(7)	For jurisdictions subject to cost-based rate regulation, changes in the fair value of derivative instruments result in the recognition of regulatory assets or regulatory liabilities as they are expected to be recovered from or refunded to customers.

	(8)	Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted-average useful life of approximately 25 years as of December 31, 2021.

	(9)	Rates charged to customers by Virginia Power's regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.

	(10)	Reflects amounts to be refunded to jurisdictional retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review. See Note 13 for additional information.

	(11)	Represents a reserve related to the expected use of a CCRO in accordance with the GTSA associated with the 2021 Triennial Review. See Note 13 for additional information.

	(12)	Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity.

	(13)	Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon) for the future decommissioning of Virginia Power’s utility nuclear generation stations, in excess of the related AROs.

At December 31, 2021, Dominion Energy and Virginia Power regulatory assets include $4.4 billion and $3.0 billion, respectively, on which they do not expect to earn a return during the applicable recovery period. With the exception of certain items discussed above, the majority of these expenditures are expected to be recovered within the next two years.

NOTE 13. REGULATORY MATTERS

Regulatory Matters Involving Potential Loss Contingencies

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

Other Regulatory Matters

Virginia Regulation

Regulation Act and Grid Transformation and Security Act of 2018

The Regulation Act enacted in 2007 instituted a cost-of-service rate model, ending Virginia’s planned transition to retail competition for electric supply service to most classes of customers.

The Regulation Act authorizes stand-alone rate adjustment clauses for recovery of costs for new generation projects, FERC-approved transmission costs, underground distribution lines, environmental compliance, conservation and energy efficiency programs, renewable energy programs and nuclear license renewals, and also contains statutory provisions directing Virginia Power to file annual fuel cost recovery cases with the Virginia Commission.

If the Virginia Commission’s future rate decisions, including actions relating to Virginia Power’s rate adjustment clause filings, differ materially from Virginia Power’s expectations, it may adversely affect its results of operations, financial condition and cash flows.

The GTSA reinstated base rate reviews commencing with the 2021 Triennial Review. In the triennial review proceedings, earnings that are more than 70 basis points above the utility’s authorized ROE that might have been refunded to customers and served as the basis for a reduction in future rates, may be reduced by Virginia Commission-approved investment amounts in qualifying solar or wind generation facilities or electric distribution grid transformation projects that Virginia Power elects to include in a CCRO. The legislation declares that electric distribution grid transformation projects are in the public interest and provides that the costs of such projects may be recovered through a rate adjustment clause if not the subject of a CCRO. Any costs that are the subject of a CCRO are deemed recovered in base rates during the triennial period under review and may not be included in base rates in future triennial review proceedings. In any triennial review in which the Virginia Commission determines that the utility’s earnings are more than 70 basis points above its authorized ROE, base rates are subject to reduction prospectively and customer refunds would be due unless the total CCRO elected by the utility equals or exceeds the amount of earnings in excess of the 70 basis points. For the purposes of measuring any customer refunds or CCRO amounts utilized under the GTSA, associated income taxes are factored into the determination of such amounts. In the 2021 Triennial Review, any such rate reduction was limited to $50 million.

Virginia 2020 Legislation

In April 2020, the Governor of Virginia signed into law the VCEA, which along with related legislation forms a comprehensive framework affecting Virginia Power’s operations. The VCEA replaces Virginia’s voluntary renewable energy portfolio standard for

Virginia Power with a mandatory program setting annual renewable energy portfolio standard requirements based on the percentage of total electric energy sold by Virginia Power, excluding existing nuclear generation and certain new carbon-free resources, reaching 100% by the end of 2045. The VCEA includes related requirements concerning deployment of wind, solar and energy storage resources, as well as provides for certain measures to increase net-metering, including an allocation for low-income customers, incentivizes energy efficiency programs and directs Virginia to participate in a carbon trading program. While the legislation affects several portions of Virginia Power’s operations, key provisions of the GTSA remain in effect, including the triennial review structure and timing, the use of the CCRO and the $50 million cap on revenue reductions in the first triennial review proceeding. Key provisions of the VCEA and related legislation passed include the following:

	•	Fossil Fuel Electric Generation: The legislation mandates Chesterfield Power Station Units 5 & 6 and Yorktown Power Station Unit 3 to be retired by the end of 2024, Altavista, Southampton and Hopewell to be retired by the end of 2028 and Virginia Power’s remaining fossil fuel units to be retired by the end of 2045, unless the retirement of such generating units will compromise grid reliability or security. The legislation also imposed a temporary moratorium on CPCNs for fossil fuel generation, unless the resources are needed for grid reliability. This temporary moratorium concluded in January 2022. In addition, the Virginia Commission shall determine the amortization period for recovery of any appropriate costs due to the early retirement of any electric generation facilities, which could result in the reversal of previous retirement costs deemed recovered during the review period ending 2020. As discussed in Note 2, Virginia Power had recorded charges for early retirement of certain coal- and oil-fired generating units in the first quarters of 2020 and 2019. Virginia Power also revised the depreciable lives of Altavista, Southampton and Hopewell for the mandated retirement to the end of 2028, which will not have a material impact to Virginia Power’s results of operations or cash flows given the existing regulatory framework.

	•	Renewable Generation: The legislation provides a detailed renewable energy portfolio standard to achieve 100% zero-carbon generation by the end of 2045, excluding existing nuclear generation and certain new carbon-free resources. Components include requirements to petition the Virginia Commission for approval to construct or acquire new generating capacity to reach 16.1 GW of installed solar and onshore wind by the end of 2035, which includes specific requirements for utility-scale solar of 3.0 GW by the end of 2024, up to 15.0 GW by the end of 2035 and 1.1 GW of small-scale solar by the end of 2035. The legislation deems 2.7 GW of energy storage, including up to 800 MW for any one project which may include a pumped storage facility, by the end of 2035 to be in the public interest. The legislation also deems the construction or purchase of an offshore wind facility constructed off the Virginia coast with a capacity of up to 5.2 GW before 2035 to be in the public interest and provides certain presumptions facilitating cost recovery. The costs of such a facility constructed by the utility with a capacity between 2.5 and 3.0 GW will be presumed reasonably and prudently incurred if the Virginia Commission finds that the project meets competitive procurement requirements, the projected cost of the facility does not exceed a specified industry benchmark and the utility commences construction by the end of 2023 or has a plan for the facility to be in service by the end of 2027. Projects to meet these requirements are subject to approval by the Virginia Commission.

	•	Energy Efficiency: The legislation includes an energy efficiency target of 5% energy savings, as measured from a 2019 baseline, through verifiable energy efficiency programs by the end of 2025 with future targets to be set by the Virginia Commission. Virginia Power has the opportunity to offset the lost revenues with margins on program spend if certain targets are achieved and can also seek recovery of the lost revenues associated with energy efficiency programs if such reductions are found to have caused Virginia Power to earn more than 50 basis points below a fair rate of return on its rates for generation and distribution services.

	•	Carbon trading program: The legislation directs Virginia to participate in a market-based carbon trading program consistent with RGGI through 2050. In January 2022, the Governor of Virginia issued an executive order which puts directives in place to start the withdrawal of Virginia from RGGI. All costs of the carbon trading program are recoverable through an environmental rider.

	•	Low-income customers: The legislation includes the establishment of a percentage of income payment program to be administered by the Virginia Department of Housing and Community Development and the Virginia Department of Social Services. To fund the program, Virginia Power will remit amounts collected from customers under a universal service fee established and set by the Virginia Commission. As such, this program will not affect Virginia Power’s results of operations, financial position or cash flows. In December 2020, the Virginia Commission issued a final order confirming a revenue requirement of $93 million related to this program. Implementation details and the effective date of the program will be established in future legislation prior to collection of fees from customers.

Virginia Power is incurring and expects to incur significant costs, including capital expenditures, to comply with the legislative requirements discussed above. The legislation allows for cost recovery under the existing or modified regulatory framework through rate adjustment clauses, rates for generation and distribution services or Virginia Power’s fuel factor, as approved by the Virginia Commission. Costs allocated to the North Carolina jurisdiction will be recovered, subject to approval by the North Carolina Commission, in accordance with the existing regulatory framework.

2021 Triennial Review

In March 2021, Virginia Power filed its base rate case and accompanying schedules in support of the 2021 Triennial Review. In its filing, Virginia Power did not request an increase in base rates for generation and distribution services and proposed that base rates remain at their existing level. Virginia Power’s earnings test analysis, as filed, demonstrated it earned a combined ROE of 10.85% on

its generation and distribution services for the test period, before accounting for forgiven customer balances. Pursuant to Virginia legislation, forgiven customer balances were excluded from the cost of service in determining test period revenues as part of the 2021 Triennial Review. To the extent that the Virginia Commission determined total earnings for the test period to be above Virginia Power’s authorized earnings band, the forgiven balance amounts are offset against the available revenues in the determination of any customer bill credits, or utilization of a CCRO. Test period earnings may be further reduced by Virginia Commission approved investment amounts in qualifying solar or wind generation facilities or electric distribution grid transformation projects that Virginia Power elects to include as a CCRO under the GTSA. In its filing, Virginia Power elected to utilize $26 million of the CVOW Pilot Project investment as a CCRO to offset available revenues. Virginia Power had contingently elected to offset additional available revenues, if any, determined by the Virginia Commission for earnings sharing with additional Virginia Commission approved qualifying CCRO investments. The Virginia Commission also authorized an ROE for Virginia Power that is applied to Virginia Power’s riders prospectively and that was also utilized to measure base rate earnings as of January 1, 2021. Virginia Power had requested authorization of an ROE of 10.8% based on Virginia Power’s current cost of equity. Pursuant to the Regulation Act, Virginia Power’s authorized ROE shall not be set lower than the average of either (i) the returns reported for the three previous years by not less than a majority of comparable utilities in the Southeastern U.S., with certain limitations as described in the Regulation Act, or (ii) the authorized returns that are set by the applicable regulatory commissions for the same select peer group. In May 2021, Virginia Power filed supplemental testimony to reflect updated test period earnings, including an earned ROE of 10.42%, before accounting for forgiven customer balances, and that no amount of eligible CCRO is necessary to be elected to be utilized.

In 2020, Virginia Power recorded a net charge of $130 million related to the use of a CCRO in accordance with the GTSA, included in impairment of assets and other charges (benefits) in its Consolidated Statements of Income (reflected in the Corporate and Other segment) for benefits expected to be provided to jurisdictional customers as a result of the 2021 Triennial Review as well as the impact on certain non-jurisdictional customers which follow Virginia Power’s jurisdictional customer rate methodology. In 2021, Virginia Power recorded a benefit of $130 million ($97 million after-tax) in impairment of assets and other charges (benefits) in its Consolidated Statements of Income (reflected in the Corporate and Other segment) to adjust its reserve related to the use of a CCRO in accordance with the GTSA.

Subsequently, in October 2021, Virginia Power, the Virginia Commission staff and other parties filed a comprehensive settlement agreement with the Virginia Commission for approval. The comprehensive settlement agreement provides for $330 million in one-time refunds to customers made up of $255 million over a 6-month period and $75 million over three years, a $50 million going-forward base rate reduction and an authorized ROE of 9.35%. Additionally, Virginia Power has agreed to utilize $309 million of qualifying CCRO investments in the CVOW Pilot Project, deployment of AMI and a Customer Information Platform to offset available earnings and to amortize through 2023 the early retirement charges for coal- and oil-fired generation units recorded in 2019 and 2020. In November 2021, the Virginia Commission approved the comprehensive settlement agreement.

In connection with the settlement agreement, Virginia Power recorded a $356 million ($265 million after-tax) charge for refunds to be provided to customers in operating revenues in its Consolidated Statements of Income as well as a $549 million ($409 million after-tax) benefit primarily from the establishment of a regulatory asset associated with the early retirements of certain coal- and oil-fired generating units and a $318 million ($237 million after-tax) charge for CCRO benefits provided to customers in impairment of assets and other charges (benefits) in its Consolidated Statements of Income (reflected in the Corporate and Other segment). The amounts recorded reflect the impact related to jurisdictional customers as a result of the 2021 Triennial Review as well as the impact on certain non-jurisdictional customers which follow Virginia Power’s jurisdictional customer rate methodology.

Utility Disconnection Moratorium

In November 2020, legislation was enacted in Virginia relating to the moratorium on utility disconnections during the COVID-19 pandemic and resulted in Virginia Power forgiving Virginia jurisdictional retail electric customer balances that were more than 30 days past due as of September 30, 2020. As a result, Virginia Power recorded a charge of $127 million ($94 million after-tax) in impairment of assets and other charges in its Consolidated Statements of Income (reflected in the Corporate and Other segment) in 2020. In connection with the Virginia 2021 budget process, in the first quarter of 2021 Virginia Power recorded a charge of $76 million ($56 million after-tax) in impairment of assets and other charges (benefits) in its Consolidated Statements of Income for Virginia jurisdictional retail electric customer balances that were more than 30 days past due as of December 31, 2020 that Virginia Power is required to forgive. For the purposes of Virginia Power’s 2021 Triennial Review, these charges were excluded from Virginia Power’s cost of service for purposes of determining any test period earnings and determining any future rates. To the extent that the Virginia Commission determined total earnings for the test period were above Virginia Power’s authorized earnings band, the forgiven balance amounts were offset against the excess earnings in the determination of any customer bill credits, or utilization of a CCRO, as part of the 2021 Triennial Review discussed above.

Virginia Fuel Expenses

In May 2021, Virginia Power filed its annual fuel factor with the Virginia Commission to recover an estimated $1.4 billion in Virginia jurisdictional projected fuel expenses for the rate year beginning July 1, 2021 and $72 million of estimated net under-recovered balances through June 30, 2021. In June 2021, the Virginia Commission approved the annual fuel factor.

GTSA Filing

In June 2021, Virginia Power filed a petition with the Virginia Commission for approval of a revised plan for electric distribution grid transformation projects as authorized by the GTSA. The plan includes 14 projects covering six components: (i) smart meters; (ii) customer information platform; (iii) grid improvement projects; (iv) physical and cyber security; (v) telecommunications infrastructure and (vi) customer education (Phase II). For Phase II, the total proposed capital investment during 2022 – 2023 is $667 million and the proposed operations and maintenance investment is $110 million. In January 2022, the Virginia Commission approved the petition.

Renewable Generation Projects

In May 2020 and July 2020, Virginia Power entered into and closed on separate agreements to acquire Grassfield Solar, Norge Solar and Sycamore Solar. The projects are expected to cost approximately $170 million in aggregate once constructed, including the initial acquisition cost. The facilities are expected to generate 82 MW combined and be placed into service in 2022. In October 2020, Virginia Power filed an application with the Virginia Commission for CPCNs to construct and operate these projects as part of its efforts to meet the renewable generation development requirements under VCEA. In April 2021, the Virginia Commission approved the application.

In September 2021, Virginia Power filed a petition with the Virginia Commission for CPCNs to construct and operate 13 utility-scale projects totaling approximately 661 MW of solar generation and 70 MW of energy storage as part of its efforts to meet the renewable generation development requirements under the VCEA. The projects are expected to cost approximately $1.4 billion in the aggregate, excluding financing costs, and be placed into service between 2022 and 2023. This matter is pending.

In November 2021, Virginia Power filed an application with the Virginia Commission requesting approval and certification of the Virginia Facilities component of the CVOW Commercial Project. The onshore Virginia Facilities have an estimated cost of approximately $1.1 billion, excluding financing costs, which is included within the overall cost of the CVOW Commercial Project. In addition, Virginia Power requested approval from the Virginia Commission to enter into financial hedges with U.S. financial institutions to mitigate the foreign currency exchange risk associated with certain supplier contracts associated with the CVOW Commercial Project. This matter is pending.

Nuclear Life Extension Program

In October 2021, Virginia Power filed a petition with the Virginia Commission requesting a determination that it is reasonable and prudent for Virginia Power to pursue a nuclear life extension program to extend the operating licenses of Surry and North Anna and to carry out projects to upgrade or replace systems and equipment necessary to continue to safely and reliably operate these nuclear power stations. The nuclear life extension program is expected to cost approximately $3.9 billion, excluding financing costs. This matter is pending.

Riders

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

Rider Name		Application Date		Approval Date		Rate Year Beginning		Total Revenue Requirement (millions)		Increase (Decrease) Over Previous Year (millions)
Rider B		June 2020		February 2021		April 2021		24			(8	)
Rider B		June 2021		February 2022		April 2022		16			(8	)
Rider BW		October 2020		July 2021		September 2021		113			14
Rider BW		October 2021		Pending		September 2022		145			32
Rider BW		October 2021		Pending		September 2023		120			(25	)
Rider CCR		February 2021		October 2021		December 2021		216		N/A
Rider CE(1)		October 2020		April 2021		June 2021		10		N/A
Rider CE(2)		September 2021		Pending		May 2022		71			61
Rider E		January 2021		September 2021		November 2021		67			(18	)
Rider E		January 2022		Pending		November 2022		101			34
Rider GT		August 2021		Pending		June 2022		56		N/A
Rider GV		June 2020		February 2021		April 2021		153			21
Rider GV		June 2021		December 2021		April 2022		142			(11	)
Rider GV		June 2021		December 2021		April 2023		127			(15	)
Rider OSW		November 2021		Pending		September 2022		79		N/A
Rider R		June 2020		February 2021		April 2021		58			14
Rider R		June 2021		Pending		April 2022		59			1
Rider R		June 2021		Pending		April 2023		55			(4	)
Rider RGGI(3)		December 2020		August 2021		September 2021		168		N/A
Rider RGGI(4)		December 2021		Withdrawal pending
Rider RPS		December 2020		July 2021		August 2021		13		N/A
Rider RPS		December 2021		Pending		September 2022		140			127
Rider S		June 2020		February 2021		April 2021		194			(1	)
Rider S		June 2021		February 2022		April 2022		192			(2	)
Rider S		June 2021		February 2022		April 2023		191			(1	)
Rider SNA(5)		October 2021		Pending		September 2022		109		N/A
Rider T1(6)		May 2021		August 2021		September 2021		874			(190	)
Rider U(7)		June 2020		February 2021		April 2021		80			28
Rider U(8)		June 2021		Pending		April 2022		96			16
Rider US-2		October 2020		July 2021		September 2021		9			—
Rider US-2		October 2021		Pending		September 2022		11			2
Rider US-3		July 2020		March 2021		June 2021		38			10
Rider US-3		August 2021		Pending		June 2022		50			12
Rider US-4		July 2020		March 2021		June 2021		10			3
Rider US-4		August 2021		Pending		June 2022		15			5
Rider W		June 2020		February 2021		April 2021		120			14
Rider W		June 2021		February 2022		April 2022		121			1
DSM Riders(9)		December 2020		September 2021		October 2021		74			14
DSM Riders(10)		December 2021		Pending		September 2022		91			17

(1)	Associated with Grassfield Solar, Norge Solar and Sycamore Solar.

(2)	Associated with solar generation and energy storage projects requested for approval in September 2021, solar generation projects approved in April 2021 and certain small-scale solar projects.

(3)	In August 2021, the Virginia Commission issued an order granting reconsideration and suspended its order approving the revenue requirement. In November 2021, the Virginia Commission lifted the suspension of the order. In February 2022, a party filed an appeal to the Supreme Court of Virginia challenging the Virginia Commission’s order.

(4)	In January 2022, Virginia Power filed a motion to withdraw its application as a result of the announcement by the Governor of Virginia that he intends to withdraw Virginia from RGGI. Virginia Power expects to file an updated application to recover its actual and projected RGGI compliance costs informed by these developments at the appropriate time.

(5)	Virginia Power also requested approval of cost recovery of approximately $1.2 billion through Rider SNA for the first phase of nuclear life extension program which includes investments through 2024.

(6)	Consists of $493 million for the transmission component of Virginia Power’s base rates and $381 million for Rider T1.

(7)	Consists of $44 million for previously approved phases and $36 million for phase five costs for Rider U.

(8)	Consists of $61 million for previously approved phases and $35 million for phase six costs for Rider U.

(9)	Associated with an additional 10 new energy efficiency programs and one new demand response DSM program for five years, subject to future extension, with a $162 million cost cap.

(10)	Associated with an additional nine new energy efficiency programs with a $140 million cost cap, with the ability to exceed the cost cap by no more than 15%.

Electric Transmission Projects

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

Description and Location of Project		Application Date		Approval Date		Type of Line		Miles of Lines		Cost Estimate (millions)
Bristers-Ladysmith Rebuild Project in the Counties of Fauquier, Stafford, Spotsylvania and Caroline, Virginia		May 2020		February 2021		500 kV		37		110
Relocate and replace a transmission line underground between the Tysons substation and the future Spring Hill substation		September 2020		June 2021		230 kV		< 1		30
Rebuild an existing transmission line and install new line adjacent thereto in the Counties of New Kent, King William, King and Queen, Essex and Richmond, Virginia		October 2020		December 2021		230 kV		41		100
Rebuild Clubhouse-Dry Bread Line and Dry Bread-Lakeview Line in Greensville County, Virginia		November 2020		July 2021		230 kV		13		20
Rebuild transmission lines and related projects in the Counties of York and James City and the City of Williamsburg, Virginia		January 2021		September 2021		230 kV		11		30
Elmont-Ladysmith rebuild and related projects in the Counties of Hanover and Caroline, Virginia		April 2021		Pending		500 kV		26		95
Beaumeade-Belmont reconductor and rebuild projects in the County of Loudoun, Virginia		May 2021		February 2022		230 kV		7		15
Extension to Cloud Switching Station and Easters Switching Station in the County of Mecklenburg, Virginia		June 2021		February 2022		230 kV		15		105
Rebuild transmission lines and related projects in the City of Staunton and County of Augusta, Virginia		November 2021		Pending		230 kV		21		45
Build new DTC substation and line loop in the County of Loudoun, Virginia		December 2021		Pending		230 kV		1		105
Build new Aviator substation and line loop in the County of Loudoun, Virginia		February 2022		Pending		230 kV		1		80

In November 2013, the Virginia Commission issued an order granting Virginia Power a CPCN to construct approximately 7 miles of new overhead 500 kV transmission line from the existing Surry switching station in Surry County to a new Skiffes Creek switching station in James City County, and approximately 20 miles of new 230 kV transmission line in James City County, York County, and the City of Newport News from the proposed new Skiffes Creek switching station to Virginia Power’s existing Whealton substation in the City of Hampton. In February 2019, the transmission line project was placed into service. In March 2019, the U.S. Court of Appeals for the D.C. Circuit issued an order vacating the permit from the U.S. Army Corps of Engineers issued in July 2017 and ordered the U.S. Army Corps of Engineers to do a full environmental impact study of the project. In April 2019, Virginia Power and the U.S. Army Corps of Engineers filed petitions for rehearing with the U.S. Court of Appeals for the D.C. Circuit, asking that the permit from the U.S. Army Corps of Engineers remain in effect while an environmental impact study is performed. In May 2019, the U.S. Court of Appeals for the D.C. Circuit denied the request for rehearing and ordered the U.S. District Court for the D.C. Circuit to consider and issue a ruling on whether the permit should be vacated during the U.S. Army Corps of Engineers’ preparation of an environmental impact statement. In November 2019, the U.S. District Court for the D.C. Circuit issued an order allowing the permit to remain in effect while an environmental impact statement is prepared. In November 2020, the U.S. Army Corps of Engineers issued a draft environmental impact statement noting there is no better alternative. This matter is pending.

North Carolina Regulation

Virginia Power North Carolina Base Rate Case

In March 2019, Virginia Power filed its base rate case and schedules with the North Carolina Commission. Virginia Power proposed a non-fuel, base rate increase of $27 million effective November 1, 2019 on an interim basis subject to refund, with any permanent rates ordered by the North Carolina Commission effective January 1, 2020. The base rate increase was proposed to recover the significant investments in generation, transmission and distribution infrastructure for the benefit of North Carolina customers. Virginia Power presented an earned return of 7.52% based upon a fully-adjusted test period, compared to its authorized 9.90% return, and proposed a 10.75% ROE. In September 2019, Virginia Power revised its filing to reduce the non-fuel base rate increase to $24 million. In January 2020, the North Carolina Commission approved a 9.75% ROE and disallowed certain costs associated with coal ash remediation at Chesterfield power station. In February 2020, the North Carolina Commission issued its final order relating to base rates. In July 2020, Virginia Power filed a notice of appeal and exceptions to the Supreme Court of North Carolina, arguing that the North Carolina Commission committed reversible error on certain issues relating to the ratemaking treatment of certain coal ash remediation costs. This matter is pending.

Virginia Power North Carolina Fuel Filing

In August 2021, Virginia Power submitted its annual filing to the North Carolina Commission to adjust the fuel component of its electric rates. Virginia Power updated its filing in October 2021 to reflect the increased commodity cost of fuel and proposed a total $26 million increase to the fuel component of its electric rates for the rate year beginning February 1, 2022. In January 2022, the North Carolina Commission approved the filing.

PSNC Base Rate Case

In April 2021, PSNC filed its general rate case application and schedules with the North Carolina Commission. PSNC proposed a non-fuel, base rate increase of $53 million to be effective November 1, 2021. After considering the benefits of the 2017 Tax Reform Act, the net revenue increase to customers would be approximately $42 million. The base rate increase was proposed to recover the significant investment in infrastructure to serve a growing customer base, improve safety and reliability of the transmission and distribution system and enhance energy efficiency and sustainability. The proposed rates would provide for an ROE of 10.25% compared to the currently authorized ROE of 9.7%.

In October 2021, PSNC, the North Carolina Commission public staff and certain other parties of record filed a stipulation of settlement with the North Carolina Commission for approval. The stipulation of settlement provides for a non-fuel, base rate increase of $29 million effective November 1, 2021, based on an ROE of 9.60%. The net revenue increase to customers, after considering the amortization of the previously deferred benefits of the 2017 Tax Reform Act, would be $4 million in the initial rate year, $23 million for the following rate year and then $26 million beginning for the third through fifth rate years. In addition, the stipulation of settlement provides for the recovery, over four years, of $106 million of operation and maintenance costs which PSNC has incurred and deferred through June 2021 to comply with federal standards for pipeline integrity and safety. In November 2021, PSNC implemented temporary rates consistent with the stipulation of settlement. In December 2021, a revised stipulation of settlement was filed with the North Carolina Commission adjusting the net revenue increase to customers, after considering the amortization of the previously deferred benefits of the 2017 Tax Reform Act, to $6 million in the initial rate year, $25 million for the following rate year and $27 million beginning for the third through fifth rate years. In January 2022, the North Carolina Commission approved the revised stipulation of settlement without modification and issued its final order.

Pipeline Integrity and Safety Program

The North Carolina Commission has authorized PSNC to use a tracker mechanism to recover the incurred capital investment and associated costs of complying with federal standards for pipeline integrity and safety requirements that are not in current base rates. In August 2021, the North Carolina Commission approved PSNC’s request to increase the integrity management annual revenue requirement to $34 million, an increase of $1 million over its previous filing, effective September 2021.

Rider D

Rider D allows PSNC to recover from customers all prudently incurred gas costs and certain related uncollectible expenses as well as losses on negotiated gas and transportation sales. In September 2021, PSNC submitted a filing with the North Carolina Commission for a $61 million gas cost increase. The North Carolina Commission approved the filing in September 2021 with rates effective October 2021. In November 2021, PSNC submitted a filing with the North Carolina Commission for a $49 million gas cost increase and a $15 million increase in the customers deferred account. The North Carolina Commission approved the filing in December 2021 with rates effective December 2021.

South Carolina Regulation

South Carolina Electric Base Rate Case

In August 2020, DESC filed its retail electric base rate case and schedules with the South Carolina Commission. DESC proposed a non-fuel, base rate increase of $178 million, or 7.75%, based on an adjusted test year data, effective on or after the first billing cycle of March 2021. The base rate increase was proposed to recover the significant investment in assets and operating resources required to serve an expanding customer base, maintain the safety, reliability and efficiency of DESC’s system and meet increasingly stringent reliability, security and environmental requirements for the benefit of South Carolina customers. DESC presented an earned ROE of 5.90% based upon a fully-adjusted test period. The proposed rates would provide for an earned ROE equal to the current authorized earned ROE of 10.25% established in the previous rate case in 2012. In January 2021, the South Carolina Commission approved a proposal made by the South Carolina Office of Regulatory Staff, and agreed to by DESC and other intervenors, to stay the base rate case due to the current economic conditions and to allow the parties more time to negotiate a settlement with a final order to be issued no later than August 2021.

In July 2021, DESC, the South Carolina Office of Regulatory Staff and other parties of record filed a comprehensive settlement agreement with the South Carolina Commission for approval. The comprehensive settlement agreement provides for a non-fuel, base rate increase of $62 million (resulting in a net increase of $36 million after considering an accelerated amortization of certain excess deferred income taxes) commencing with bills issued on September 1, 2021 and an authorized earned ROE of 9.50%. Additionally, DESC has agreed to commit up to $15 million to forgive retail electric customer balances that were more than 60 days past due as of May 31, 2021 and provide $15 million for energy efficiency upgrades and critical health and safety repairs to customer homes. Pursuant to the comprehensive settlement agreement, DESC would not file a retail electric base rate case prior to July 1, 2023, such that new rates would not be effective prior to January 1, 2024, absent unforeseen extraordinary economic or financial conditions that may include changes in corporate tax rates. In July 2021, the South Carolina Commission approved the comprehensive settlement agreement and issued its final order in August 2021.

In connection with this matter, Dominion Energy recorded charges of $249 million ($187 million after-tax) reflected within impairment of assets and other charges (benefits) (reflected in the Corporate and Other segment), including $237 million of regulatory assets associated with DESC’s purchases of its first mortgage bonds during 2019 that are no longer probable of recovery under the settlement agreement, and $18 million ($14 million after-tax) reflected within other income in its Consolidated Statements of Income for the year ended December 31, 2021.

DSM Programs

DESC has approval for a DSM rider through which it recovers expenditures related to its DSM programs

In January 2021, DESC filed an application with the South Carolina Commission seeking approval to recover $48 million of costs and net lost revenues associated with these programs, along with an incentive to invest in such programs. In April 2021, the South Carolina Commission approved the filing. In connection with the approval of the comprehensive settlement agreement in the South Carolina base rate case discussed above, the net lost revenue component of the DSM rider was adjusted resulting in a recovery of $43 million commencing with bills issued on September 1, 2021.

In January 2022, DESC filed an application with the South Carolina Commission seeking approval to recover $60 million of costs and net lost revenues associated with these programs, along with an incentive to invest in such programs. This matter is pending.

Natural Gas Rates

In June 2021, DESC filed with the South Carolina Commission its monitoring report for the 12-month period ended March 31, 2021 with a total revenue requirement of $426 million. This represents a $9 million overall annual increase to its natural gas rates under the terms of the Natural Gas Rate Stabilization Act effective with the first billing cycle of November 2021. In October 2021, the South Carolina Commission issued an order approving a total revenue requirement of $424 million effective with the first billing cycle of November 2021. This represents a $7 million overall annual increase to DESC’s natural gas rates.

Cost of Fuel

DESC’s retail electric rates include a cost of fuel component approved by the South Carolina Commission which may be adjusted periodically to reflect changes in the price of fuel purchased by DESC.

In February 2021, DESC filed with the South Carolina Commission a proposal to increase the total fuel cost component of retail electric rates. DESC’s proposed adjustment would increase annual base fuel component recoveries by approximately $36 million and is designed to recover DESC’s current base fuel costs, net of the existing over-collected balance, over the 12-month period beginning with the first billing cycle of May 2021. In addition, DESC proposed a decrease to its variable environmental component and an increase to its distributed energy resource component. In April 2021, the South Carolina Commission approved the filing.

In February 2022, DESC filed with the South Carolina Commission a proposal to increase the total fuel cost component of retail electric rates. DESC’s proposed adjustment is designed to recover DESC’s current base fuel costs, including its existing under-collected balance, over the 12-month period beginning with the first billing cycle of May 2022. DESC also proposed to apply approximately $66 million representing the net balance of funds associated with the monetization of the bankruptcy settlement with Toshiba Corporation following the satisfaction of liens against NND Project property recorded in regulatory liabilities, as a reduction to its under-collected base fuel cost balance. In addition, DESC proposed an increase to its variable environmental and avoided capacity cost component. The net effect is a proposed annual increase of $143 million. This matter is pending.

Ohio Regulation

PIR Program

In 2008, East Ohio began PIR, aimed at replacing approximately 25% of its pipeline system. In September 2016, the Ohio Commission approved a stipulation filed jointly by East Ohio and the Staff of the Ohio Commission to continue the PIR program and associated cost recovery for another five-year term, calendar years 2017 through 2021, and to permit East Ohio to increase its annual capital expenditures to $200 million by 2018 and 3% per year thereafter subject to the cost recovery rate increase caps proposed by East Ohio.

In December 2020, East Ohio filed an application with the Ohio Commission requesting approval to extend the PIR program for an additional five years upon expiration of the current authorization at the end of 2021. East Ohio proposed continued capital investment increases of 3% per year, with related increases in the annual rate-increase caps. In its application, East Ohio proposed that the new five-year period should include investment through December 31, 2026. This case is pending.

In April 2021, the Ohio Commission approved East Ohio’s application to adjust the PIR cost recovery rates for 2020 costs. The filing reflects gross plant investment for 2020 of $178 million, cumulative gross plant investment of $2.0 billion and a revenue requirement of $243 million.

CEP Program

In 2011, East Ohio began CEP which enables East Ohio to defer depreciation expense, property tax expense and carrying costs at the debt rate of 6.5% on capital investments not covered by its PIR program to expand, upgrade or replace its infrastructure and information technology systems as well as investments necessary to comply with the Ohio Commission or other government regulation.

In April 2021, East Ohio filed an application requesting approval to adjust the CEP cost recovery rates for 2019 and 2020 costs. The filing reflects gross plant investment for 2019 of $137 million, gross plant investment for 2020 of $99 million, cumulative gross plant investment of $957 million and a revenue requirement of $119 million. This matter is pending.

UEX Rider

East Ohio has approval for a UEX Rider through which it recovers the bad debt expense of most customers not participating in the PIPP Plus Program. The UEX Rider is adjusted annually to achieve dollar for dollar recovery of East Ohio’s actual write-offs of uncollectible amounts. In July 2021, the Ohio Commission approved East Ohio’s application to adjust its UEX Rider to reflect an increased annual revenue requirement of $20 million to provide for an under-recovered accumulated bad debt expense of $7 million as of March 31, 2021, and recovery of net bad debt expense projected to total $13 million for the twelve-month period ending March 2022.

West Virginia Regulation

West Virginia Base Rate Case

In September 2020, Hope filed its base rate case and schedules with the West Virginia Commission. Hope proposed a non-fuel, base rate increase of $28 million. The base rate increase was proposed to recover the significant investment in distribution infrastructure and costs associated with the acquisition of over 2,000 miles of gathering assets, both for the benefit of West Virginia customers. The proposed rates would provide for an ROE of 10.25% compared to the authorized ROE of 9.45%. In July 2021, the West Virginia Commission approved a non-fuel, base rate increase of $13 million for rates effective July 2021 with an ROE of 9.54%. In August 2021, Hope filed a petition for reconsideration with the West Virginia Commission regarding certain return calculations included in the July 2021 approval order. This matter is pending.

PREP

In October 2021, the West Virginia Commission approved Hope’s request to recover PREP costs related to $54 million and $56 million of projected capital investment for 2021 and 2022, respectively. The request also includes a true-up of PREP costs related to the 2020 actual capital investment of $34 million and sets forth $9 million of annual PREP costs to be recovered in proposed rates effective November 1, 2021.

Utah Regulation

Purchased Gas

In May 2021, the Utah Commission approved Questar Gas’ request for a $43 million gas cost increase with rates effective June 2021.

In October 2021, the Utah Commission approved Questar Gas’ request for an $83 million gas cost increase with rates effective November 2021.

In December 2021, the Utah Commission approved Questar Gas’ request for a $29 million gas cost increase on an interim basis, with rates effective January 2022.

NOTE 14. ASSET RETIREMENT OBLIGATIONS

AROs represent obligations that result from laws, statutes, contracts and regulations related to the eventual retirement of certain of the Companies’ long-lived assets. The Companies AROs are primarily associated with the decommissioning of their nuclear generation facilities and ash pond and landfill closures.

The Companies have also identified, but not recognized, AROs related to the retirement of Dominion Energy’s storage wells in its underground natural gas storage network, certain Virginia Power electric transmission and distribution assets located on property with easements, rights of way, franchises and lease agreements, Virginia Power’s hydroelectric generation facilities and the abatement of certain asbestos not expected to be disturbed in the Companies’ generation facilities. The Companies currently do not have sufficient information to estimate a reasonable range of expected retirement dates for any of these assets since the economic lives of these assets can be extended indefinitely through regular repair and maintenance and they currently have no plans to retire or dispose of any of these assets. As a result, a settlement date is not determinable for these assets and AROs for these assets will not be reflected in the Consolidated Financial Statements until sufficient information becomes available to determine a reasonable estimate of the fair value of the activities to be performed. The Companies continue to monitor operational and strategic developments to identify if sufficient information exists to reasonably estimate a retirement date for these assets.

The changes to AROs during 2020 and 2021 were as follows:

	Amount
(millions)
Dominion Energy
AROs at December 31, 2019	$	5,184
Obligations incurred during the period		67
Obligations settled during the period		(114	)
Revisions in estimated cash flows(1)		228
Accretion		218
AROs at December 31, 2020(2)	$	5,583
Obligations incurred during the period		31
Obligations settled during the period		(165	)
Revisions in estimated cash flows(3)		(151	)
Accretion		224
Sale of non-wholly-owned nonregulated solar facilities		(49	)
AROs at December 31, 2021(2)	$	5,473
Virginia Power
AROs at December 31, 2019	$	3,581
Obligations incurred during the period		48
Obligations settled during the period		(85	)
Revisions in estimated cash flows(4)		139
Accretion		137
AROs at December 31, 2020	$	3,820
Obligations incurred during the period		26
Obligations settled during the period		(131	)
Revisions in estimated cash flows(5)		67
Accretion		141
AROs at December 31, 2021	$	3,923

(1)	Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities, asbestos abatement costs associated with certain utility facilities and from the completion of a nuclear decommissioning cost study related to Summer.

(2)	Includes $179 million and $198 million reported in other current liabilities at December 31, 2020 and 2021, respectively.

(3)

Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities, estimated cash flow projections associated with the recovery of spent nuclear fuel costs for its AROs associated with the decommissioning of Kewaunee and estimated cash flow projections associated with certain gas distribution pipelines. These revisions in 2021 resulted in a charge of $44 million ($35 million after-tax) within other operations and maintenance expense in the Consolidated Statements of Income as well as a $173 million decrease to property, plant and equipment, net.

(4)	Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities and asbestos abatement costs associated with certain utility facilities.

(5)	Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities.

In addition, Virginia Power revised its estimated cash flows for the existing ARO related to future ash pond and landfill closure costs, which resulted in a $113 million ($84 million after-tax) benefit in other operations and maintenance expense in the Consolidated Statements of Income in 2019.

Dominion Energy’s AROs at December 31, 2021 and 2020, include $2.0 billion and $1.9 billion, respectively, with $0.9 billion and $0.9 billion recorded by Virginia Power, related to the future decommissioning of their nuclear facilities. The Companies have established trusts dedicated to funding the future decommissioning activities. At December 31, 2021 and 2020, the aggregate fair value of Dominion Energy’s trusts, consisting primarily of equity and debt securities, totaled $8.0 billion and $6.9 billion, respectively. At December 31, 2021 and 2020, the aggregate fair value of Virginia Power’s trusts, consisting primarily of debt and equity securities, totaled $3.7 billion and $3.2 billion, respectively.

In addition, AROs at December 31, 2021 and 2020 include $2.9 billion and $2.8 billion, respectively, related to Virginia Power’s future ash pond and landfill closure costs. Regulatory mechanisms, primarily associated with legislation enacted in Virginia in March 2019, provide for recovery of costs to be incurred. See Note 12 for additional information.

NOTE 15. LEASES

At December 31, 2021 and 2020, the Companies had the following lease assets and liabilities recorded in the Consolidated Balance Sheets:

	December 31, 2021				December 31, 2020
(millions)
Dominion Energy
Lease assets:
Operating lease assets(1)	$	506			$	564
Finance lease assets(2)		144				148
Total lease assets	$	650			$	712
Lease liabilities:
Operating lease liabilities(3)	$	44			$	54
Finance lease liabilities(4)		36				32
Total lease liabilities - current		80				86
Operating lease liabilities (5)		464				516
Finance lease liabilities(6)		112				108
Total lease liabilities - noncurrent		576				624
Total lease liabilities	$	656			$	710
Virginia Power
Operating lease assets(1)	$	256			$	185
Finance lease assets(2)		71				45
Total lease assets	$	327			$	230
Lease liabilities:
Operating lease liabilities(3)	$	25			$	28
Finance lease liabilities(4)		13				8
Total lease liabilities - current		38				36
Operating lease liabilities (5)		227				155
Finance lease liabilities(6)		57				36
Total lease liabilities - noncurrent		284				191
Total lease liabilities	$	322			$	227

(1)	Included in other deferred charges and other assets in the Companies’ Consolidated Balance Sheets.

(2)	Included in property, plant and equipment in the Companies’ Consolidated Balance Sheets, net of $81 million and $18 million of accumulated amortization at Dominion Energy and Virginia Power, respectively, at December 31, 2021 and net of $50 million and $9 million of accumulated amortization at Dominion Energy and Virginia Power, respectively, at December 31, 2020.

(3)	Included in other current liabilities in the Companies’ Consolidated Balance Sheets.

(4)	Included in securities due within one year in the Companies’ Consolidated Balance Sheets.

(5)	Included in other deferred credits and other liabilities in the Companies’ Consolidated Balance Sheets.

(6)	Included in other long-term debt in the Companies’ Consolidated Balance Sheets.

In addition to the amounts disclosed above, Dominion Energy’s Consolidated Balance Sheets at December 31, 2021 and 2020 includes property, plant and equipment of $1.2 billion and $2.2 billion, respectively, and accumulated depreciation of $106 million and $68 million, respectively, related to facilities subject to power purchase agreements under which Dominion Energy is the lessor.

For the years ended December 31, 2021, 2020 and 2019, total lease cost associated with the Companies’ leasing arrangements consisted of the following:

	Year Ended December 31, 2021				Year Ended December 31, 2020				Year Ended December 31, 2019
(millions)
Dominion Energy
Finance lease cost:
Amortization	$	40			$	33			$	20
Interest		(3	)			—				4
Operating lease cost		66				68				79
Short-term lease cost		32				20				26
Variable lease cost		5				8				5
Total lease cost	$	140			$	129			$	134
Virginia Power
Finance lease cost:
Amortization	$	12			$	7			$	3
Interest		1				1				—
Operating lease cost	$	30			$	36			$	41
Short-term lease cost		19				12				13
Variable lease cost		1				4				2
Total lease cost	$	63			$	60			$	59

For the years ended December 31, 2021, 2020 and 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:

	Year Ended December 31, 2021				Year Ended December 31, 2020				Year Ended December 31, 2019
(millions)
Dominion Energy
Operating cash flows for finance leases	$	(3	)		$	—			$	4
Operating cash flows for operating leases		103				96				111
Financing cash flows for finance leases		40				33				20
Virginia Power
Operating cash flows for finance leases	$	1			$	1			$	—
Operating cash flows for operating leases		53				52				56
Financing cash flows for finance leases		12				7				3

In addition to the amounts disclosed above, Dominion Energy’s Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019, include $168 million, $175 million and $174 million, respectively, of rental revenue, included in operating revenue and $110 million, $102 million and $94 million, respectively, of depreciation expense, included in depreciation, depletion and amortization, related to facilities subject to power purchase agreements under which Dominion Energy is the lessor.

At December 31, 2021 and 2020, the weighted average remaining lease term and weighted discount rate for the Companies’ finance and operating leases were as follows:

	December 31, 2021				December 31, 2020
Dominion Energy
Weighted average remaining lease term - finance leases	5 years				5 years
Weighted average remaining lease term - operating leases	27 years				26 years
Weighted average discount rate - finance leases		2.77	%			3.17	%
Weighted average discount rate - operating leases		3.96	%			4.07	%
Virginia Power
Weighted average remaining lease term - finance leases	6 years				6 years
Weighted average remaining lease term - operating leases	25 years				21 years
Weighted average discount rate - finance leases		2.27	%			2.51	%
Weighted average discount rate - operating leases		4.00	%			4.26	%

The Companies’ lease liabilities have the following maturities:

Maturity of Lease Liabilities		Dominion Energy								Virginia Power
(millions)		Operating				Finance				Operating				Finance
2022		$	50			$	32			$	27			$	8
2023			41				39				21				14
2024			33				33				17				14
2025			27				18				13				13
2026			24				15				10				10
After 2026			577				22				240				17
Total undiscounted lease payments			752				159				328				76
Present value adjustment			(244	)			(11	)			(76	)			(6	)
Present value of lease liabilities		$	508			$	148			$	252			$	70

Corporate Office Leasing Arrangement

In December 2019, Dominion Energy signed an agreement with a lessor, as amended in May 2020, to construct and lease a new corporate office property in Richmond, Virginia. The lessor provided equity and had obtained financing commitments from debt investors, totaling $465 million, to fund the estimated project costs. In March 2021, Dominion Energy notified the lessor of its intention to terminate the leasing arrangement effective April 2021. As a result, Dominion Energy recorded a charge of $62 million ($46 million after-tax) in 2021, included in impairments of assets and other charges in its Consolidated Statements of Income, primarily for amounts required to be repaid to the lessor.

Offshore Wind Vessel Leasing Arrangement

In December 2020, Dominion Energy signed an agreement with a lessor to complete construction of and lease a Jones Act compliant offshore wind installation vessel. This vessel is designed to handle current turbine technologies as well as next generation turbines. The lessor is providing equity and has obtained financing commitments from debt investors, totaling $550 million, to fund the estimated project costs. The project is expected to be completed by the end of 2023. Dominion Energy has been appointed to act as the construction agent for the lessor, during which time Dominion Energy will request cash draws from the lessor and debt investors to fund all project costs, which totaled $293 million as of December 31, 2021. If the project is terminated under certain events of default, Dominion Energy could be required to pay up to 100% of the then funded amount.

The initial lease term will commence once construction is substantially complete and the vessel is delivered and will mature in November 2027. At the end of the initial lease term, Dominion Energy can (i) extend the term of the lease for an additional term, subject to the approval of the participants, at current market terms, (ii) purchase the property for an amount equal to the outstanding project costs or, (iii) subject to certain terms and conditions, sell the property on behalf of the lessor to a third party using commercially reasonable efforts to obtain the highest cash purchase price for the property. If the project is sold and the proceeds from the sale are insufficient to repay the investors for the outstanding project costs, Dominion Energy may be required to make a payment to the lessor for the difference between the outstanding project costs and sale proceeds. Dominion Energy is not considered the owner during construction for financial accounting purposes and, therefore, will not reflect the construction activity in its consolidated financial statements. Dominion Energy expects to recognize a right-of-use asset and a corresponding finance lease liability at the commencement of the lease term. Dominion Energy will be considered the owner of the leased property for tax purposes, and as a result, will be entitled to tax deductions for depreciation and interest expense.

NOTE 16. VARIABLE INTEREST ENTITIES

The primary beneficiary of a VIE is required to consolidate the VIE and to disclose certain information about its significant variable interests in the VIE. The primary beneficiary of a VIE is the entity that has both 1) the power to direct the activities that most significantly impact the entity’s economic performance and 2) the obligation to absorb losses or receive benefits from the entity that could potentially be significant to the VIE.

Dominion Energy

Through December 2021, Dominion Energy owned the manager and 67% of the membership interest in certain nonregulated solar facilities, as discussed in Note 2. Dominion Energy concluded that these entities were VIEs due to the members lacking the characteristics of a controlling financial interest. In addition, in 2016 Dominion Energy created a wholly owned subsidiary, SBL Holdco, as a holding company of its interest in the VIE nonregulated solar facilities and accordingly SBL Holdco was a VIE. Prior to

its disposition in December 2021, Dominion Energy was the primary beneficiary of SBL Holdco and the nonregulated solar facilities, as it had the power to direct the activities that most significantly impact their economic performance as well as the obligation to absorb losses and benefits which could be significant to them. At December 31, 2020, Dominion Energy’s securities due within one year and long-term debt include $32 million and $239 million, respectively, of debt issued by SBL Holdco net of issuance costs that was nonrecourse to Dominion Energy and was secured by SBL Holdco’s interest in certain nonregulated solar facilities.

At December 31, 2021, Dominion Energy owns a 50% membership interest in Cove Point, as discussed in Notes 3 and 9. Dominion Energy concluded that Cove Point is a VIE due to the limited partners lacking the characteristics of a controlling financial interest. As a result of the GT&S Transaction, effective November 1, 2020, Dominion Energy is no longer the primary beneficiary of Cove Point as BHE retains the power to direct the activities that most significantly impact Cove Point’s economic performance. Dominion Energy’s maximum exposure to loss is limited to its current and future investment, as well as any obligations under guarantees provided. See Note 23 for more information.

At December 31, 2021, Dominion Energy owns a 53% membership interest in Atlantic Coast Pipeline. Dominion Energy concluded that Atlantic Coast Pipeline is a VIE because it has insufficient equity to finance its activities without additional subordinated financial support. Dominion Energy has concluded that it is not the primary beneficiary of Atlantic Coast Pipeline as it does not have the power to direct the activities of Atlantic Coast Pipeline that most significantly impact its economic performance, as the power to direct is shared with Duke Energy. Dominion Energy is obligated to provide capital contributions based on its ownership percentage. Dominion Energy’s maximum exposure to loss is limited to any future investment. See Note 9 for more details regarding the nature of this entity.

Dominion Energy and Virginia Power

The Companies’ nuclear decommissioning trust funds and Dominion Energy’s rabbi trusts hold investments in limited partnerships or similar type entities (see Note 9 for further details). Dominion Energy and Virginia Power concluded that these partnership investments are VIEs due to the limited partners lacking the characteristics of a controlling financial interest. Dominion Energy and Virginia Power have concluded neither is the primary beneficiary as they do not have the power to direct the activities that most significantly impact these VIEs’ economic performance. Dominion Energy and Virginia Power are obligated to provide capital contributions to the partnerships as required by each partnership agreement based on their ownership percentages. Dominion Energy and Virginia Power’s maximum exposure to loss is limited to their current and future investments.

Virginia Power

Virginia Power had a long-term power and capacity contract with one non-utility generator with an aggregate summer generation capacity of approximately 218 MW. The contract contained certain variable pricing mechanisms in the form of partial fuel reimbursement that Virginia Power considered to be variable interests and for which Virginia Power had previously concluded if the generation facility were to be a VIE that it would not be the primary beneficiary. In May 2019, Virginia Power entered into an agreement and paid $135 million to terminate the remaining contract with the non-utility generator. A $135 million ($100 million after-tax) charge was recorded in impairment of assets and other charges in Virginia Power’s Consolidated Statements of Income (reflected in the Corporate and Other segment) during the second quarter of 2019. Virginia Power paid $13 million for electric capacity to non-utility generators and $1 million and million for electric energy to non-utility generators for the year ended December 31, 2019.

Virginia Power purchased shared services from DES, an affiliated VIE, of $380 million, $349 million and $387 million for the years ended December 31, 2021, 2020, and 2019, respectively. Virginia Power’s Consolidated Balance Sheets included amounts due to DES of $20 million at December 31, 2021, and $175 million at December 31, 2020, respectively, recorded in payables to affiliates in the Consolidated Balance Sheets. Virginia Power determined that it is not the primary beneficiary of DES as it does not have power to direct the activities that most significantly impact its economic performance as well as the obligation to absorb losses and benefits which could be significant to it. DES provides accounting, legal, finance and certain administrative and technical services to all Dominion Energy subsidiaries, including Virginia Power. Virginia Power has no obligation to absorb more than its allocated share of DES costs.

NOTE 17. SHORT-TERM DEBT AND CREDIT AGREEMENTS

The Companies use short-term debt to fund working capital requirements and as a bridge to long-term debt financings. The levels of borrowing may vary significantly during the course of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations. In addition, Dominion Energy utilizes cash and letters of credit to fund collateral requirements. Collateral requirements are impacted by commodity prices, hedging levels, Dominion Energy’s credit ratings and the credit quality of its counterparties.

Dominion Energy

In June 2021, Dominion Energy amended its $6.0 billion joint revolving credit facility to provide for a discount in the pricing of certain annual fees and amounts borrowed by Dominion Energy under the facility if Dominion Energy achieves certain annual renewable electric generation and diversity and inclusion objectives. In addition, the amended facility incorporates certain administrative changes with respect to the anticipated transition from LIBOR to an alternative benchmark rate. The key financial covenants are unchanged from the previous facility.

Dominion Energy’s short-term financing is supported through its access to the joint revolving credit facility described below. Commercial paper and letters of credit outstanding, as well as capacity available under the credit facility were as follows:

		Facility Limit				Outstanding Commercial Paper(1)				Outstanding Letters of Credit				Facility Capacity Available
(millions)
At December 31, 2021
Joint revolving credit facility(2)		$	6,000			$	1,883			$	131			$	3,986
At December 31, 2020
Joint revolving credit facility(2)		$	6,000			$	627			$	100			$	5,273

(1)	The weighted-average interest rates of the outstanding commercial paper supported by Dominion Energy’s credit facility was 0.31% and 0.29% at December 31, 2021 and 2020, respectively.

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

DESC and Questar Gas’ short-term financings are supported through access as co-borrowers to the joint revolving credit facility discussed above with the Companies. At December 31, 2021, the sub-limits for DESC and Questar Gas were $500 million and $250 million, respectively.

In January 2021, DESC and GENCO applied to FERC for a two-year short-term borrowing authorization. In March 2021, FERC granted DESC authority through March 2023 to issue short-term indebtedness (pursuant to Section 204 of the Federal Power Act) in amounts not to exceed $2.2 billion outstanding with maturity dates of one year or less. In addition, in March 2021, FERC granted GENCO authority through March 2023 to issue short-term indebtedness not to exceed $200 million outstanding with maturity dates of one year or less.

In addition to the joint revolving credit facility mentioned above, Dominion Energy also has a credit facility which allows Dominion Energy to issue up to $30 million in letters of credit and matures in June 2022. At December 31, 2021 and 2020, Dominion Energy had $29 million and $30 million, respectively, in letters of credit outstanding under this agreement.

In December 2021, in connection with the sale of certain non-wholly owned nonregulated solar facilities, as discussed in Note 10, SBL Holdco terminated $30 million of credit facilities and Dominion Solar Projects III, Inc. terminated $25 million of credit facilities. At December 31, 2020, no amounts were outstanding under either of these facilities.

In March 2020, Dominion Energy entered into a $900 million 364-Day Revolving Credit Agreement that bore interest at a variable rate. At December 31, 2020, $225 million was outstanding under the agreement. In March 2021, the agreement reached maturity and Dominion Energy repaid the outstanding borrowed amount in full.

In July 2021, Dominion Energy entered into an approximately $1.3 billion term loan credit agreement following the termination of the Q-Pipe Transaction as discussed in Note 3 and borrowed the full amount available thereunder. The term loan was scheduled to mature in December 2021, with the ability to extend maturity at Dominion Energy’s option to June 2022 and bore interest at a variable rate. The proceeds were utilized to repay the deposit received from BHE on the Q-Pipe Transaction. In December 2021, Dominion Energy used the net proceeds from the completion of the sale of the Q-Pipe Group to Southwest Gas to repay the principal outstanding under the term loan plus accrued interest.

In December 2021, DECP Holdings entered into a credit facility, which allows it to issue up to $110 million in letters of credit with automatic one-year renewals through the maturity of the facility in December 2024. At December 31, 2021, $110 million in letters of credit were outstanding under this agreement with no amounts drawn under the letters of credit.

Dominion Energy has an effective shelf registration statement with the SEC for the sale of up to $3.0 billion of variable denomination floating rate demand notes, called Dominion Energy Reliability InvestmentSM. The registration limits the principal amount that may be outstanding at any one time to $1.0 billion. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Dominion Energy Reliability Investment Committee, or its designee, on a weekly basis. The notes have no stated maturity date, are non-transferable and may be redeemed in whole or in part by Dominion Energy or at the investor’s option at any time. At December 31, 2021 and December 31, 2020, Dominion Energy’s Consolidated Balance Sheets include $431 million and $268 million, respectively, presented within short-term debt. The proceeds are used for general corporate purposes and to repay debt.

Virginia Power

Virginia Power’s short-term financing is supported through its access as co-borrower to Dominion Energy’s $6.0 billion joint revolving credit facility, as amended in June 2021. The credit facility can be used for working capital, as support for the combined commercial paper programs of the borrowers under the credit facility and for other general corporate purposes.

Virginia Power’s share of commercial paper and letters of credit outstanding under the joint revolving credit facility with Dominion Energy, Questar Gas and DESC were as follows:

		Facility Limit				Outstanding Commercial Paper(1)				Outstanding Letters of Credit
(millions)
At December 31, 2021
Joint revolving credit facility(2)		$	6,000			$	745			$	40
At December 31, 2020
Joint revolving credit facility(2)		$	6,000			$	45			$	12

(1)	The weighted-average interest rates of the outstanding commercial paper supported by the credit facility was 0.26% and 0.30% at December 31, 2021 and 2020, respectively.

(2)

The full amount of the facility is available to Virginia Power, less any amounts outstanding to co-borrowers Dominion Energy, Questar Gas and DESC. The sub-limit for Virginia Power is set within the facility limit but can be changed at the option of the borrowers under the credit facility multiple times per year. At December 31, 2021, the sub-limit for Virginia Power was $1.75 billion. If Virginia Power has liquidity needs in excess of its sub-limit, the sub-limit may be changed or such needs may be satisfied through short-term intercompany borrowings from Dominion Energy. This credit facility matures in June 2026, with the potential to be extended by the borrowers to June 2028. The credit facility can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $2.0 billion (or the sub-limit, whichever is less) of letters of credit.

NOTE 18. LONG-TERM DEBT

At December 31,		2021 Weighted- average Coupon(1)				2021				2020
(millions, except percentages)
Virginia Electric and Power Company:
Unsecured Senior Notes:
2.30% to 8.875%, due 2022 to 2051			4.07	%		$	13,238			$	12,689
Tax-Exempt Financings(2):
0.45% to 1.90%, due 2032 to 2041			1.14	%			625				625
Virginia Electric and Power Company total principal						$	13,863			$	13,314
Securities due within one year			3.45	%			(300	)			—
Unamortized discount, premium and debt issuances costs, net							(110	)			(107	)
Derivative restructuring							446				444
Finance leases							57				36
Virginia Electric and Power Company total long-term debt						$	13,956			$	13,687
Dominion Energy, Inc.:
Supplemental 364-Day credit facility, variable rate, due 2021						$	—			$	225
Sustainability Revolving Credit Agreement, variable rate, due 2024(3)							—				—
Unsecured Senior Notes:
Variable rate, due 2023			0.73	%			1,000				1,000
1.45% to 7.0%, due 2021 to 2049(4)			3.78	%			11,238				9,938
Unsecured Junior Subordinated Notes:
2.715% to 4.104%, due 2021 and 2024			3.07	%			700				1,950
Payable to Affiliated Trust, 8.4%, due 2031			8.40	%			10				10
Enhanced Junior Subordinated Notes:
5.25% and 5.75%, due 2054 and 2076(5)			5.75	%			685				1,485
DECP Holdings, Term Loan, variable rate, due 2024(6)			1.50	%			2,500				—
Questar Gas, Unsecured Senior Notes, 2.21% to 7.20%, due 2024 to 2051			3.85	%			1,000				750
East Ohio, Unsecured Senior Notes, 1.30% to 3.00%, due 2025 to 2050			2.25	%			1,800				1,800
PSNC, Senior Debentures and Notes, 3.10% to 7.45%, due 2021 to 2051			4.34	%			800				800
DESC:
First Mortgage Bonds, 2.30% to 6.625%, due 2021 to 2065			5.09	%			3,634				3,267
Tax-Exempt Financings(7):
Variable rate due 2038			0.14	%			35				35
3.625% and 4.00%, due 2028 and 2033			3.90	%			54				54
GENCO, variable rate due 2038			0.14	%			33				33
Other			3.65	%			1				1
Secured Senior Notes, 4.82%, due 2042(8)			4.82	%			314				331
Term Loans, variable rates, due 2023 and 2024(9)							—				476
Tax-Exempt Financing, 1.7% due 2033			1.70	%			27				27
Virginia Electric and Power Company total principal (from above)							13,863				13,314
Dominion Energy, Inc. total principal(10)						$	37,694			$	35,496
Fair value hedge valuation(11)							2				3
Securities due within one year(12)			2.79	%			(805	)			(1,905	)
Supplemental 364-Day credit facility borrowings							—				(225	)
Unamortized discount, premium and debt issuance costs, net							(315	)			(293	)
Derivative restructuring							738				773
Finance leases							112				108
Dominion Energy, Inc. total long-term debt						$	37,426			$	33,957

(1)	Represents weighted-average coupon rates for debt outstanding as of December 31, 2021.

(2)	These financings relate to certain pollution control equipment at Virginia Power’s generating facilities.

(3)

This $900 million supplemental credit facility, entered in June 2021, offers a reduced interest rate margin with respect to borrowed amounts allocated to certain environmental sustainability or social investment initiatives. Proceeds of the supplemental credit facility also may be used for general corporate purposes, but such proceeds are not eligible for a reduced interest rate margin. In June 2021 and August 2021, Dominion Energy borrowed $250 million and $650 million respectively. The proceeds from these borrowings were used to support environmental sustainability and social investment initiatives ($250 million) and for general corporate purposes ($650 million). In November 2021 and December 2021, Dominion Energy repaid $650 million and $250 million, respectively, borrowed under this arrangement.

(4)	Includes debt assumed by Dominion Energy from the merger of its former CNG subsidiary.

(5)	In August 2021, Dominion Energy redeemed the remaining principal outstanding of $800 million of its July 2016 hybrids, which would have otherwise matured in 2076.

(6)	The term loan amortizes over a 17-year period and matures in December 2024 with the potential to be extended to December 2026. The debt is secured by DECP Holdings’ noncontrolling interest in Cove Point.

(7*)*	Industrial revenue bonds totaling $68 million are secured by letters of credit that expire, subject to renewal, in the fourth quarter of 2022.

(

8*)*	Represents debt associated with Eagle Solar. The debt is nonrecourse to Dominion Energy and is secured by Eagle Solar’s interest in certain solar facilities.

(9)

Represents debt associated with SBL Holdco and Dominion Solar Projects III, Inc. The debt was nonrecourse to Dominion Energy and was secured by SBL Holdco’s and Dominion Solar Projects III, Inc’s interest in certain solar facilities. In connection with the sales of certain non-wholly owned nonregulated solar facilities discussed in Note 10, the outstanding debt of SBL Holdco was assumed by Terra Nova Renewable Partners and Dominion Energy utilized proceeds from Clearway to repay the outstanding balance of the Dominion Solar Projects III, Inc. term loan.

(10)	Excludes amounts classified as held for sale at December 31, 2020. See Note 3.

(11)	Represents the valuation of certain fair value hedges associated with Dominion Energy’s fixed rate debt.

(12)	At December 31, 2020, includes $22 million of estimated mandatory prepayments due within one year based on estimated cash flows in excess of debt service at SBL Holdco and Dominion Solar Projects III, Inc.

Based on stated maturity dates rather than early redemption dates that could be elected by instrument holders, the scheduled principal payments of long-term debt at December 31, 2021, were as follows:

		2022				2023				2024				2025				2026				Thereafter				Total
(millions, except percentages)
Virginia Power
Unsecured Senior Notes		$	300			$	700			$	350			$	350			$	1,150			$	10,388			$	13,238
Tax-Exempt Financings			—				—				—				—				—				625				625
Total		$	300			$	700			$	350			$	350			$	1,150			$	11,013			$	13,863
Weighted-average Coupon			3.45	%			2.75	%			3.45	%			3.10	%			3.08	%			4.16	%
Dominion Energy
Term Loans		$	151			$	134			$	2,215			$	—			$	—			$	—			$	2,500
First Mortgage Bonds			—				—				—				—				—				3,634				3,634
Unsecured Senior Notes			650				2,700				690				2,000				2,257				20,779				29,076
Secured Senior Notes			6				17				31				19				20				221				314
Tax-Exempt Financings			—				—				—				—				—				775				775
Unsecured Junior Subordinated Notes Payable to Affiliated Trusts			—				—				—				—				—				10				10
Unsecured Junior Subordinated Notes			—				—				700				—				—				—				700
Enhanced Junior Subordinated Notes			—				—				—				—				—				685				685
Total		$	807			$	2,851			$	3,636			$	2,019			$	2,277			$	26,104			$	37,694
Weighted-average Coupon			2.79	%			1.89	%			2.20	%			3.01	%			2.82	%			4.26	%

The Companies’ short-term credit facility and long-term debt agreements contain customary covenants and default provisions. As of December 31, 2021, there were no events of default under these covenants.

Senior Note Issuances

In January 2022, Virginia Power issued $600 million of 2.40% senior notes and $400 million of 2.95% senior notes that mature in 2032 and 2051, respectively. The proceeds were used for general corporate purposes and/or to repay short-term debt.

Enhanced Junior Subordinated Notes

In June 2006 and September 2006, Dominion Energy issued $300 million of June 2006 hybrids and $500 million of September 2006 hybrids, respectively. The June 2006 hybrids and the September 2006 hybrids bore interest at the three-month LIBOR plus 2.825%, reset quarterly and at the three-month LIBOR plus 2.3%, reset quarterly, respectively. Dominion Energy executed RCCs in connection with its issuance of the June 2006 hybrids and the September 2006 hybrids. Under the terms of the RCCs, redemptions of the hybrids were subject to certain conditions. In 2019, Dominion Energy purchased and cancelled $12 million and $13 million of its June 2006 hybrids and September 2006 hybrids, respectively. In February 2020, Dominion Energy redeemed the remaining $111 million and $286 million of its June 2006 hybrids and September 2006 hybrids, respectively, both of which would have otherwise matured in 2066. All purchases were conducted in compliance with the applicable RCC, each of which was terminated in February 2020. Expenses related to the early redemption of the hybrids were $10 million reflected within interest and related charges in the Consolidated Statements of Income for the year ended December 31, 2020.

In October 2014, Dominion Energy issued $685 million of October 2014 hybrids that will bear interest at 5.75% per year until October 1, 2024. Thereafter, they will bear interest at the three-month LIBOR plus 3.057%, reset quarterly. If the three-month LIBOR is terminated while the October 2014 hybrids are outstanding, they will thereafter bear interest at the last interest rate determined prior to the termination.

In July 2016, Dominion Energy issued $800 million of 5.25% July 2016 hybrids. In August 2021, Dominion Energy redeemed the remaining principal outstanding of $800 million of its July 2016 hybrids, which would have otherwise matured in 2076 and were listed on the NYSE under the symbol DRUA. Expenses related to the early redemption of the hybrids were $23 million reflected within interest and related charges in the Consolidated Statements of Income for the year ended December 31, 2021.

Dominion Energy may defer interest payments on the hybrids on one or more occasions for up to 10 consecutive years. If the interest payments on the hybrids are deferred, Dominion Energy may not make distributions related to its capital stock, including dividends, redemptions, repurchases, liquidation payments or guarantee payments during the deferral period. Also, during the deferral period, Dominion Energy may not make any payments on or redeem or repurchase any debt securities that are equal in right of payment with, or subordinated to, the hybrids.

Remarketable Subordinated Notes

In June 2019, Dominion Energy successfully remarketed the $700 million 2016 Series A-1 2.0% RSNs due 2021 and $700 million 2016 Series A-2 2.0% RSNs due 2024 pursuant to the terms of the related 2016 Equity Units. In connection with the remarketing, the interest rates on the Series A-1 and Series A-2 notes were reset to 2.715% and 3.071%, respectively, payable on a semi-annual basis, and Dominion Energy ceased to have the ability to redeem the notes at its option or defer interest payments.

Dominion Energy did not receive any proceeds from the remarketing. Remarketing proceeds belonged to the investors holding the 2016 Equity Units and were temporarily used to purchase a portfolio of treasury securities. Upon maturity of the portfolio, the proceeds were applied on behalf of the investors on the related stock purchase contract settlement date to pay the purchase price to Dominion Energy for issuance of 18.5 million shares of its common stock in August 2019.

Derivative Restructuring

In June 2020, Dominion Energy amended a portfolio of interest rate swaps with a notional value of $2.0 billion, extending the mandatory termination dates from 2020 and 2021 to December 2024. As a result of this noncash financing activity with an embedded interest rate swap, Dominion Energy recorded $326 million in other long-term debt representing the net present value of the initial fair value measurement of the new contract with an imputed interest rate of 1.19%, in its Consolidated Balance Sheets with an embedded interest rate derivative that had a fair value of zero at inception. In August 2021, Dominion Energy settled certain of the outstanding interest rate swaps which would have otherwise matured in December 2024, resulting in a $39 million reduction in other long-term debt.

In August 2020, Virginia Power amended a portfolio of interest rate swaps with a notional value of $900 million, extending the mandatory termination dates from 2020 to December 2023. As a result of this noncash financing activity with an embedded interest rate swap, Virginia Power recorded $443 million in other long-term debt representing the net present value of the initial fair value measurement of the new contract with an imputed interest rate of 0.34%, in its Consolidated Balance Sheets with an embedded interest rate derivative that had a fair value of zero at inception. The interest rate swaps were in a hedge relationship prior to the transaction. Virginia Power de-designated the hedge relationships prior to the transaction and then designated the new interest rate swap in a hedge relationship after the transaction.

NOTE 19. PREFERRED STOCK

Dominion Energy is authorized to issue up to 20 million shares of preferred stock, which may be designated into separate classes. At December 31, 2021, Dominion Energy had issued and outstanding 3.4 million shares of preferred stock, 1.6 million, 0.8 million and 1.0 million of which were designated as the Series A Preferred Stock, the Series B Preferred Stock and the Series C Preferred Stock, respectively. At December 31, 2020, Dominion Energy had issued and outstanding 2.4 million shares preferred stock, 1.6 million and 0.8 million of which were designated as the Series A Preferred Stock and the Series B Preferred Stock, respectively.

DESC is authorized to issue up to 20 million shares of preferred stock. At both December 31, 2021 and 2020, DESC had issued and outstanding 1,000 shares of preferred stock, all of which were held by SCANA and are eliminated in consolidation.

Virginia Power is authorized to issue up to 10 million shares of preferred stock, $100 liquidation preference; however, none were issued and outstanding at December 31, 2021 or 2020.

2019 Corporate Units

In June 2019, Dominion Energy issued $1.6 billion of 2019 Equity Units, initially in the form of 2019 Series A Corporate Units. The Corporate Units are listed on the NYSE under the symbol DCUE. The net proceeds were used for general corporate purposes and to repay short-term debt, including commercial paper.

Each 2019 Series A Corporate Unit consists of a stock purchase contract and a 1/10, or 10%, undivided beneficial ownership interest in one share of Series A Preferred Stock. Beginning in June 2022, the Series A Preferred Stock is convertible at the option of the holder into Dominion Energy common stock under a formula based upon the average closing price of Dominion Energy common stock prior to the conversion date. The Series A Preferred Stock is redeemable in cash by Dominion Energy beginning September 2022 at the liquidation preference. Settlement of any conversion is payable in cash, common stock or a combination thereof, at Dominion Energy’s election. In November 2021, Dominion Energy’s Articles of Incorporation were amended to require that any conversion of its Series A Preferred Stock be settled, at Dominion Energy’s election, either entirely in cash or in cash up to the first $1,000 per share and in shares of Dominion Energy common stock, cash or any combination thereof for any amounts in excess of $1,000 per share. As a result of establishing a minimum amount to be settled in cash if the holders elect to convert the Series A Preferred Stock, $1.6 billion was reclassified from equity to mezzanine equity in 2021.

The stock purchase contracts obligate the holders to purchase shares of Dominion Energy common stock in June 2022. The purchase price to be paid under the stock purchase contracts is $100 per Corporate Unit and the number of shares to be purchased will be determined under a formula based upon the average closing price of Dominion Energy common stock near the settlement date. The Series A Preferred Stock was pledged upon issuance as collateral to secure the purchase of common stock under the related stock purchase contracts.

Dominion Energy pays cumulative dividends on the Series A Preferred Stock and quarterly contract adjustment payments on the stock purchase contracts, at the rates described below. Dominion Energy may elect to pay such dividends and/or payments in cash, shares of Dominion Energy common stock or a combination of cash and shares of Dominion Energy common stock. Dominion Energy may defer the contract adjustment payments for one or more consecutive periods but generally not beyond the purchase contract settlement date. If payments are deferred, Dominion Energy may not make any distributions related to its capital stock, including dividends, redemptions, repurchases or liquidation payments. Also, during the deferral period, Dominion Energy may not make any payments on or redeem, repay or repurchase any debt securities that are equal in right of payment with, or subordinated to, the contract adjustment payments or make any payment on any guarantee of a security of a subsidiary if the guarantee ranks equal or junior to the contract adjustment payments. Unless all accumulated and unpaid dividends on the Series A Preferred Stock have been declared and paid, Dominion Energy may not make any distributions on any of its capital stock ranking equal or junior to the Series A Preferred Stock as to dividends or upon liquidation, as applicable, including dividends, redemptions, repurchases or liquidation payments. In such circumstances, Dominion Energy also may not make any contract adjustment payments or other similar types of payments, subject to certain exceptions.

Pursuant to the terms of the 2019 Equity Units, Dominion Energy expects to remarket shares of Series A Preferred Stock during the first or second quarter of 2022. Following a successful remarketing, the dividend rate on the preferred stock will be reset and the conversion rate on the preferred stock may increase depending on the closing price of Dominion Energy’s common stock on the date of the remarketing. Dominion Energy will not directly receive any proceeds from the remarketing as the remarketing will be conducted on behalf of investors that, as of the remarketing, continue to hold corporate units or otherwise elect to participate in the remarketing. Proceeds from the remarketing attributable to investors that continue to hold corporate units will be used to purchase a treasury portfolio that upon maturity will be used in June 2022 to pay the purchase price to Dominion Energy for issuance of its common stock under the stock purchase contracts that are a component of such corporate units. Under the terms of the stock purchase contracts, assuming no anti-dilution or other adjustments, the maximum number of shares of common stock Dominion Energy will issue in June 2022 is 21.8 million for consideration of $1.6 billion.

Selected information about Dominion Energy’s 2019 Equity Units is presented below:

Issuance Date		Units Issued		Total Net Proceeds(1)				Total Preferred Stock(2)				Cumulative Dividend Rate				Stock Purchase Contract Annual Rate				Stock Purchase Contract Liability(3)				Stock Purchase Contract Settlement Date
(millions except interest rates)
6/14/2019		16		$	1,582			$	1,610				1.75	%			5.5	%		$	250			6/1/2022

(1) Issuance costs of $28 million were recorded as a reduction to preferred stock ($14 million) and common stock ($14 million). In connection with the reclassification of the Series A Preferred Stock to mezzanine equity in 2021, the issuance costs originally recognized as a reduction to preferred stock were reclassified to common stock.

(2) Dominion Energy recorded dividends of $28 million ($17.50 per share), $28 million ($17.50 per share) and $15 million ($9.479 per share) for the years ended December 31, 2021, 2020 and 2019, respectively.

(3) Payments of $85 million, $83 million and $38 million were made in 2021, 2020 and 2019, respectively. The stock purchase contract liability was $44 million and $129 million at December 31, 2021 and 2020, respectively.

Series B Preferred Stock

In December 2019, Dominion Energy issued 800,000 shares of Series B Preferred Stock for $791 million, net of $9 million of issuance costs. The preferred stock has a liquidation preference of $1,000 per share and currently pays a 4.65% dividend per share on

the liquidation preference. Dividends are paid cumulatively on a semi-annual basis, commencing June 15, 2020. Dominion Energy recorded dividends of $37 million ($46.50 per share) for the years ended December 31, 2021 and 2020. The dividend rate for the Series B Preferred Stock will be reset every five years beginning on December 15, 2024 to equal the then-current five-year U.S. Treasury rate plus a spread of 2.993%. Unless all accumulated and unpaid dividends on the Series B Preferred Stock have been declared and paid, Dominion Energy may not make any distributions on any of its capital stock ranking equal or junior to the Series B Preferred Stock as to dividends or upon liquidation, including through dividends, redemptions, repurchases or otherwise.

Dominion Energy may, at its option, redeem the Series B Preferred Stock in whole or in part on December 15, 2024 or on any subsequent fifth anniversary of such date at a price equal to $1,000 per share plus any accumulated and unpaid dividends. Dominion Energy may also, at its option, redeem the Series B Preferred Stock in whole but not in part at a price equal to $1,020 per share plus any accumulated and unpaid dividends at any time within a certain period of time following any change in the criteria ratings agencies use to assign equity credit to securities such as the Series B Preferred Stock that has certain adverse effects on the equity credit actually received by the Series B Preferred Stock.

Holders of the Series B Preferred Stock have no voting rights except in the limited circumstances provided for in the terms of the Series B Preferred Stock or as otherwise required by applicable law. The Series B Preferred Stock is not subject to any sinking fund or other obligation of ours to redeem, repurchase or retire the Series B Preferred Stock. The preferred stock contains no conversion rights.

Series C Preferred Stock

In December 2021, Dominion Energy issued 750,000 shares of Series C Preferred Stock for $742 million, net of $8 million of issuance costs. Also in December 2021, Dominion Energy issued 250,000 shares of Series C Preferred Stock valued at $250 million to the qualified benefit pension plans. See Note 22 for further information regarding activity surrounding pension plan contributions. The preferred stock has a liquidation preference of $1,000 per share and currently pays a 4.35% dividend per share on the liquidation preference. Dividends are paid cumulatively on a semi-annual basis, commencing April 15, 2022. Dominion Energy recorded dividends of $3 million ($2.6583 per share) for the year ended December 31, 2021. The dividend rate for the Series C Preferred Stock will be reset every five years beginning on April 15, 2027 to equal the then-current five-year U.S. Treasury rate plus a spread of 3.195%. Unless all accumulated and unpaid dividends on the Series C Preferred Stock have been declared and paid, Dominion Energy may not make any distributions on any of its capital stock ranking equal or junior to the Series C Preferred Stock as to dividends or upon liquidation, including through dividends, redemptions, repurchases or otherwise.

Dominion Energy may, at its option, redeem the Series C Preferred Stock in whole or in part anytime from and including January 15, 2027 through and including April 15, 2027 or during any subsequent fifth anniversary of such period at a price equal to $1,000 per share plus any accumulated and unpaid dividends. Dominion Energy may also, at its option, redeem the Series C Preferred Stock in whole but not in part at a price equal to $1,020 per share plus any accumulated and unpaid dividends at any time within a certain period of time following any change in the criteria ratings agencies use to assign equity credit to securities such as the Series C Preferred Stock that has certain adverse effects on the equity credit actually received by the Series C Preferred Stock.

Holders of the Series C Preferred Stock have no voting rights except in the limited circumstances provided for in the terms of the Series C Preferred Stock or as otherwise required by applicable law. The Series C Preferred Stock is not subject to any sinking fund or other obligation of ours to redeem, repurchase or retire the Series C Preferred Stock. The preferred stock contains no conversion rights.

NOTE 20. EQUITY

Common Stock

Dominion Energy

During 2021, 2020 and 2019, Dominion Energy recorded, net of fees and commissions, $340 million, $481 million and $11.0 billion from the issuance of approximately 4 million, 7 million and 157 million shares of common stock, respectively, for acquisitions, pension plan contributions, settlements of stock purchase contracts and litigation and through various programs including Dominion Energy Direct®, employee savings plans and an at-the-market program.

Acquisitions

During 2019, Dominion Energy issued 95.6 million shares of common stock in connection with the acquisition of SCANA. At the time of issuance, these common stock shares were valued at $6.8 billion. See Note 3 for further information on the issuance of Dominion Energy common stock in connection with the SCANA Combination.

In January 2019, Dominion Energy and Dominion Energy Midstream closed on an agreement and plan of merger pursuant to which Dominion Energy acquired each outstanding common unit representing limited partner interests in Dominion Energy Midstream not already owned by Dominion Energy through the issuance of 22.5 million shares of common stock valued at $1.6 billion. Under the terms of the agreement and plan of merger, each publicly held outstanding common unit representing limited partner interests in Dominion Energy Midstream was converted into the right to receive 0.2492 shares of Dominion Energy common stock. Immediately prior to the closing, each Series A Preferred Unit representing limited partner interests in Dominion Energy Midstream was converted into common units representing limited partner interests in Dominion Energy Midstream in accordance with the terms of Dominion Energy Midstream’s partnership agreement. The merger was accounted for by Dominion Energy following the guidance for a change in a parent company’s ownership interest in a consolidated subsidiary. Because Dominion Energy controls Dominion Energy Midstream both before and after the merger, the changes in Dominion Energy’s ownership interest in Dominion Energy Midstream were accounted for as an equity transaction and no gain or loss was recognized. In connection with the merger, Dominion Energy recognized $40 million of income taxes in equity primarily attributable to establishing additional regulatory liabilities related to excess deferred income taxes and changes in state income taxes.

Pension Plan Contribution

In December 2019, Dominion Energy contributed 6.1 million shares of its common stock valued at $499 million to the qualified defined benefit pension plans. See Note 22 for further information regarding activity surrounding pension plan contributions.

Dominion Energy Direct® and Employee Savings Plans

Dominion Energy maintains Dominion Energy Direct® and a number of employee savings plans through which contributions may be invested in Dominion Energy’s common stock. These shares may either be newly issued or purchased on the open market with proceeds contributed to these plans. In August 2020, Dominion Energy began purchasing its common stock on the open market for these direct stock purchase plans. During 2020, Dominion Energy received cash of $159 million from the issuance of 2.1 million of such shares through Dominion Energy Direct® and employee savings plans. In January 2021, Dominion Energy began issuing new shares of common stock for these direct stock purchase plans. During 2021, Dominion Energy issued 2.6 million of such shares and received proceeds of $192 million.

Stock Purchase Contracts

In August 2019, Dominion Energy issued 18.5 million shares under the related stock purchase contracts entered into as part of Dominion Energy’s 2016 Equity Units and received proceeds of $1.4 billion. See Note 18 for further information surrounding these stock purchase contracts.

Other Issuances

In July 2021, Dominion Energy issued 1.4 million shares of its common stock, valued at $104 million, to satisfy DESC’s obligation under a settlement agreement for the FILOT litigation discussed in Note 23.

In August 2021, Dominion Energy issued 0.6 million shares of its common stock, valued at $45 million, to satisfy DESC’s obligation for the initial payment under a settlement agreement with the SCDOR discussed in Note 23.

In September 2020, Dominion Energy issued 4.1 million shares of its common stock to satisfy its obligation under a settlement agreement for the Santee Cooper Ratepayer Case discussed in Note 23. These shares were immediately repurchased as discussed below.

At-the-Market Program

In February 2018, Dominion Energy entered into sales agency agreements to effect sales under an at-the-market program. In the fourth quarter of 2018, Dominion Energy issued 2.7 million shares and received cash proceeds of $197 million, net of fees and commissions paid of $2 million. In the first quarter of 2019, Dominion Energy issued 2.1 million shares and received cash proceeds of $154 million, net of fees and commissions paid of $2 million. In the fourth quarter of 2019, Dominion Energy issued 7.8 million shares and received cash proceeds of $639 million, net of fees and commissions paid of $6 million. Following these issuances, Dominion Energy had no remaining capacity under this program.

In March 2020, Dominion Energy entered into sales agency agreements to effect sales under a $500 million at-the-market common stock program. Dominion Energy did not issue any shares under this program which expired in June 2020.

In August 2020, Dominion Energy entered into sales agency agreements to effect sales under a new at-the-market program. Under the sales agency agreements, Dominion Energy may, from time to time, offer and sell shares of its common stock through the sales agents

or enter into one or more forward sale agreements with respect to shares of its common stock. Sales by Dominion Energy through the sales agents or by forward sellers pursuant to a forward sale agreement cannot exceed $1.0 billion in the aggregate. In November 2021, Dominion Energy entered forward sale agreements for approximately 1.1 million shares of its common stock to be settled by November 2022 at an initial forward price of $74.66 per share. Except in certain specified circumstances that would require physical share settlement, Dominion Energy may elect physical, cash or net share settlement of the forward sale agreements. A net share settlement could require us to deliver a number of shares significantly lower than would be issued in connection with a full physical settlement.

Repurchase of Common Stock

Dominion Energy did not repurchase any shares in 2021 or 2019, except for shares tendered by employees to satisfy tax withholding obligations on vested restricted stock, which do not count against its stock repurchase authorization. During 2020, Dominion Energy repurchased 38.9 million shares of Dominion Energy common stock for $3.1 billion through an open market agreement, a private transaction and accelerated share repurchase agreements as discussed below.

In July 2020, in contemplation of Dominion Energy entering the July 2020 agreement to sell substantially all of its gas transmission and storage operations to BHE, the Board of Directors authorized the repurchase of up to $3.0 billion of Dominion Energy’s 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 Board of Directors authorized the repurchase of up to $1.0 billion of Dominion Energy’s common stock in addition to the repurchase program authorized in July 2020. This repurchase program does not include a specific timetable 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.

In August 2020, Dominion Energy began repurchasing shares under an open market agreement with a financial institution. During the third quarter of 2020, Dominion Energy repurchased 7.2 million shares of Dominion Energy common stock for $562 million. During the fourth quarter of 2020, Dominion Energy repurchased 3.7 million shares of Dominion Energy common stock for $295 million.

In September 2020, Dominion Energy repurchased 4.1 million shares of Dominion Energy common stock in a private transaction for $323 million.

In September 2020, Dominion Energy entered into two prepaid accelerated share repurchase agreements with separate financial institutions as counterparties. Dominion Energy made payments totaling $1.5 billion to the counterparties in exchange for an aggregate of 17.2 million shares of Dominion Energy common stock, which represented approximately 90% of $1.5 billion worth of Dominion Energy shares based on the closing price of such shares on the date the agreements were executed. In November 2020, Dominion Energy received an additional 1.4 million shares upon completion of the respective purchase periods under the terms of the agreements. The number of additional shares delivered under each agreement was based on the average of the daily volume-weighted average stock prices of Dominion Energy’s common stock during the term of the applicable purchase period, less a discount. As a result, Dominion Energy recorded a reduction to common stock of $1.5 billion.

In December 2020, Dominion Energy entered into a new prepaid accelerated share repurchase agreement with one financial institution as the counterparty. Dominion Energy paid $400 million to the counterparty in exchange for an aggregate of 5.0 million shares of Dominion Energy common stock, which represented all $400 million worth of Dominion Energy shares based on the closing price of such shares on the date the agreement was executed. In December 2020, Dominion Energy received an additional 0.3 million shares upon completion of the purchase period under the terms of the agreement. The number of additional shares was based on the average of the daily volume-weighted average stock prices of Dominion Energy’s common stock during the term of the purchase period, less a discount. As a result, Dominion Energy recorded a reduction to common stock of $400 million.

Virginia Power

In 2021, 2020 and 2019, Virginia Power did not issue any shares of its common stock to Dominion Energy.

Noncontrolling Interests

GT&S Transaction Closing

In November 2020, as part of the GT&S Transaction, Dominion Energy sold a 25% controlling interest in Cove Point to BHE resulting in Dominion Energy’s remaining 50% noncontrolling interest accounted for as an equity method investment prospectively.

As a result, the $1.4 billion of noncontrolling interest related to the 25% interest in Cove Point held by Brookfield was reversed. See Notes 3 and 9 for further information on the GT&S Transaction and Dominion Energy’s equity method investment in Cove Point.

Sale of Interest in Cove Point

In December 2019, Dominion Energy completed the sale of its 25% noncontrolling limited partnership interest in Cove Point to Brookfield in exchange for cash consideration of $2.1 billion, subject to working capital adjustments. See Note 3 for further information on the sale of this interest.

Non-Wholly-Owned Nonregulated Solar Facilities

In December 2021, Dominion Energy completed the sale of SBL Holdco, which held Dominion Energy’s 67% controlling interest in certain nonregulated solar projects, and the sale of its 50% controlling interest in Four Brothers and Three Cedars. As a result of these sales, all balances recorded as noncontrolling interests associated with these entities were written off. See Note 10 for more information.

Accumulated Other Comprehensive Income (Loss)

Dominion Energy

The following table presents Dominion Energy’s changes in AOCI (net of tax) and reclassifications out of AOCI by component:

		Commodity						Interest Rate						Foreign Currency						Total Derivative-Hedging Activities(1)						Investment Securities(2)						Pension and other postretirement benefit costs(3)						Equity Method Investees(4)						Total
(millions)
Year Ended December 31, 2021
Beginning balance		$	(1	)				$	(418	)				$	—					$	(419	)				$	62					$	(1,359	)				$	(1	)				$	(1,717	)
Other comprehensive income before reclassifications: gains (losses)			—						15						—						15						(7	)					144						(3	)					149
Amounts reclassified from AOCI: (gains) losses
Purchased gas			1						—						—						1						—						—						—						1
Interest and related charges			—						60						—						60						—						—						—						60
Other income			—						—						—						—						(23	)					111						—						88
Total			1						60						—						61						(23	)					111						—						149
Income tax expense			—						(15	)					—						(15	)					5						(29	)					—						(39	)
Total, net of tax			1						45						—						46						(18	)					82						—						110
Net current period other comprehensive income (loss)			1						60						—						61						(25	)					226						(3	)					259
Ending balance		$	—					$	(358	)				$	—					$	(358	)				$	37					$	(1,133	)				$	(4	)				$	(1,458	)
Year Ended December 31, 2020
Beginning balance		$	16					$	(426	)				$	3					$	(407	)				$	37					$	(1,421	)				$	(2	)				$	(1,793	)
Other comprehensive income before reclassifications: gains (losses)			—						(231	)					(8	)					(239	)					43						25						1						(170	)
Amounts reclassified from AOCI: (gains) losses
Operating revenue			(25	)					—						—						(25	)					—						—						—						(25	)
Purchased gas			4						—						—						4						—						—						—						4
Discontinued operations			(2	)					236						6						240						—						—						—						240
Interest and related charges			—						83						—						83						—						—						—						83
Other income			—						—						—						—						(24	)					50						—						26
Total			(23	)					319						6						302						(24	)					50						—						328
Income tax expense			6						(80	)					(1	)					(75	)					6						(13	)					—						(82	)
Total, net of tax			(17	)					239						5						227						(18	)					37						—						246
Net current period other comprehensive income (loss)			(17	)					8						(3	)					(12	)					25						62						1						76
Ending balance		$	(1	)				$	(418	)				$	—					$	(419	)				$	62					$	(1,359	)				$	(1	)				$	(1,717	)

(1)	Net of $119 million and $141 million tax at December 31, 2021 and 2020, respectively.

(2)	Net of $(10) million and $(21) million tax at December 31, 2021 and 2020, respectively.

(3)	Net of $396 million and $478 million tax at December 31, 2021 and 2020, respectively.

(4)	Net of $1 million and $— million tax at December 31, 2021 and 2020, respectively.

Virginia Power

The following table presents Virginia Power’s changes in AOCI (net of tax) and reclassification out of AOCI by component:

		Interest Rate						Total Derivative-Hedging Activities(1)						Investment Securities(2)						Total
(millions)
Year Ended December 31, 2021
Beginning balance		$	(60	)				$	(60	)				$	8					$	(52	)
Other comprehensive income before reclassifications: gains (losses)			13						13						(2	)					11
Amounts reclassified from AOCI: (gains) losses
Interest and related charges			3						3						—						3
Other income			—						—						(3	)					(3	)
Total			3						3						(3	)					—
Income tax expense			(1	)					(1	)					1						—
Total, net of tax			2						2						(2	)					—
Net current period other comprehensive income (loss)			15						15						(4	)					11
Ending balance		$	(45	)				$	(45	)				$	4					$	(41	)
Year Ended December 31, 2020
Beginning balance		$	(34	)				$	(34	)				$	5					$	(29	)
Other comprehensive income before reclassifications: gains (losses)			(28	)					(28	)					6						(22	)
Amounts reclassified from AOCI: (gains) losses
Interest and related charges			2						2						—						2
Other income			—						—						(4	)					(4	)
Total			2						2						(4	)					(2	)
Income tax expense			—						—						1						1
Total, net of tax			2						2						(3	)					(1	)
Net current period other comprehensive income (loss)			(26	)					(26	)					3						(23	)
Ending balance		$	(60	)				$	(60	)				$	8					$	(52	)

(1)	Net of $16 million and $21 million tax at December 31, 2021 and 2020, respectively.

(2)	Net of $(2) million and $(3) million tax at December 31, 2021 and 2020, respectively.

Stock-Based Awards

The 2014 Incentive Compensation Plan permits stock-based awards that include restricted stock, performance grants, goal-based stock, stock options and stock appreciation rights. The Non-Employee Directors Compensation Plan permits grants of restricted stock and stock options. Under provisions of these plans, employees and non-employee directors may be granted options to purchase common stock at a price not less than its fair market value at the date of grant with a maximum term of eight years. Option terms are set at the discretion of the Compensation and Talent Development Committee of the Board of Directors or the Board of Directors itself, as provided under each plan. No options are outstanding under either plan. At December 31, 2021, approximately 19 million shares were available for future grants under these plans.

Goal-based stock awards are granted in lieu of cash-based performance grants to certain officers who have not achieved a certain targeted level of share ownership. As of December 31, 2021, unrecognized compensation cost related to nonvested goal-based stock awards was immaterial.

Dominion Energy measures and recognizes compensation expense relating to share-based payment transactions over the vesting period based on the fair value of the equity or liability instruments issued. Dominion Energy’s results for the years ended December 31, 2021, 2020 and 2019 include $42 million, $64 million and $46 million, respectively, of compensation costs and $9 million, $16 million and $11 million, respectively of income tax benefits related to Dominion Energy’s stock-based compensation arrangements. Stock-based compensation cost is reported in other operations and maintenance expense in Dominion Energy’s Consolidated Statements of Income. Excess Tax Benefits are classified as a financing cash flow.

Restricted Stock

Restricted stock grants are made to officers under Dominion Energy’s LTIP and may also be granted to certain key non-officer employees. The fair value of Dominion Energy’s restricted stock awards is equal to the closing price of Dominion Energy’s stock on the date of grant. New shares are issued for restricted stock awards on the date of grant and generally vest over a three-year service period. The following table provides a summary of restricted stock activity for the years ended December 31, 2021, 2020 and 2019:

		Shares				Weighted - average Grant Date Fair Value
		(thousands)
Nonvested at December 31, 2018			1,208			$	73.03
Granted			614				76.49
Vested			(324	)			71.75
Cancelled and forfeited			(96	)			77.16
Nonvested at December 31, 2019			1,402			$	74.77
Granted			531				81.74
Vested			(424	)			74.39
Cancelled and forfeited			(99	)			81.59
Nonvested at December 31, 2020			1,410			$	77.41
Granted			518				71.78
Vested			(505	)			73.54
Cancelled and forfeited			(113	)			75.57
Nonvested at December 31, 2021			1,310			$	76.65

As of December 31, 2021, unrecognized compensation cost related to nonvested restricted stock awards totaled $55 million and is expected to be recognized over a weighted-average period of 2.0 years. The fair value of restricted stock awards that vested was $37 million, $35 million and $23 million in 2021, 2020 and 2019, respectively. Employees may elect to have shares of restricted stock withheld upon vesting to satisfy tax withholding obligations. The number of shares withheld will vary for each employee depending on the vesting date fair market value of Dominion Energy stock and the applicable federal, state and local tax withholding rates.

Cash-Based Performance Grants

Cash-based performance grants are made to Dominion Energy’s officers under Dominion Energy’s LTIP. The actual payout of cash-based performance grants will vary between zero and 200% of the targeted amount based on the level of performance metrics achieved.

In February 2019, a cash-based performance grant was made to officers. Payout of the performance grant occurred in January 2022 based on the achievement of two performance metrics during 2019, 2020 and 2021: TSR relative to that of companies that are members of Dominion Energy’s compensation peer group and ROIC with an additional payout based on Dominion Energy’s price-earnings ratio relative to that of the members of Dominion Energy’s peer compensation group. The total payout under the grant was $5.7 million, all of which was accrued at December 31, 2021.

In February 2020, a cash-based performance grant was made to officers. Payout of the performance grant is expected to occur by March 15, 2023 based on the achievement of two performance metrics during 2020, 2021 and 2022: TSR relative to that of companies that are members of Dominion Energy’s compensation peer group and ROIC. There are additional opportunities to earn a portion of the award based on Dominion Energy’s absolute TSR or relative price-earnings ratio performance. At December 31, 2021, the targeted amount of the three-year grant was $10 million and a liability of $6 million had been accrued for this award.

In February 2021, a cash-based performance grant was made to officers. Payout of the performance grant is expected to occur by March 15, 2024 based on the achievement of two performance metrics during 2021, 2022 and 2023: TSR relative to that of companies that are members of Dominion Energy’s compensation peer group and ROIC. There is an additional opportunity to earn a portion of the award based on Dominion Energy’s relative price-earnings ratio performance. At December 31, 2021, the targeted amount of the three-year grant was $13 million and a liability of $4 million had been accrued for this award.

NOTE 21. DIVIDEND RESTRICTIONS

The Virginia Commission may prohibit any public service company, including Virginia Power, from declaring or paying a dividend to an affiliate if found to be inconsistent with the public interest. At December 31, 2021, the Virginia Commission had not restricted the payment of dividends by Virginia Power.

The North Carolina Commission, in its order approving the SCANA Combination, limited cumulative dividends payable to Dominion Energy by Virginia Power and PSNC to (i) the amount of retained earnings the day prior to closing of the SCANA Combination plus (ii) any future earnings recorded by Virginia Power and PSNC after such closing. In addition, notice to the North Carolina Commission is required if payment of dividends causes the equity component of Virginia Power and PSNC’s capital structure to fall below 45%.

The Ohio and Utah Commissions may prohibit any public service company, including East Ohio and Questar Gas, from declaring or paying a dividend to an affiliate if found to be detrimental to the public interest. At December 31, 2021, neither the Ohio Commission nor the Utah Commission had restricted the payment of dividends by East Ohio or Questar Gas, respectively.

There is no specific restriction from the South Carolina Commission on the payment of dividends paid by DESC. Pursuant to the SCANA Merger Approval Order, the amount of any DESC dividends paid must be reasonable and consistent with the long-term payout ratio of the electric utility industry and gas distribution industry.

At December 31, 2021, DESC’s retained earnings exceed the balance established by the Federal Power Act as a reserve on earnings attributable to hydroelectric generation plants. As a result, DESC is permitted to pay dividends without additional regulatory approval provided that such amounts would not bring the retained earnings balance below the threshold.

See Notes 18 and 19 for a description of potential restrictions on common stock dividend payments by Dominion Energy in connection with the deferral of interest payments on the enhanced junior subordinated notes, the deferral of contract adjustment payments on the 2019 Equity Units or a failure to pay dividends on the Series A Preferred Stock, Series B Preferred Stock or Series C Preferred Stock.

NOTE 22. EMPLOYEE BENEFIT PLANS

Dominion Energy—Defined Benefit Plans

Dominion Energy provides certain retirement benefits to eligible active employees, retirees and qualifying dependents. Under the terms of its benefit plans, Dominion Energy reserves the right to change, modify or terminate the plans. From time to time in the past, benefits have changed, and some of these changes have reduced benefits.

Dominion Energy maintains qualified noncontributory defined benefit pension plans covering virtually all employees who commenced employment prior to July 2021. Retirement benefits are based primarily on years of service, age and the employee’s compensation. Dominion Energy’s funding policy is to contribute annually an amount that is in accordance with the provisions of ERISA. The pension programs also provide benefits to certain retired executives under company-sponsored nonqualified employee benefit plans. The nonqualified plans are funded through contributions to grantor trusts. Dominion Energy also provides retiree healthcare and life insurance benefits with annual employee premiums based on several factors such as age, retirement date and years of service.

Pension and other postretirement benefit costs are affected by employee demographics (including age, compensation levels and years of service), the level of contributions made to the plans and earnings on plan assets. These costs may also be affected by changes in key assumptions, including expected long-term rates of return on plan assets, discount rates, healthcare cost trend rates, mortality rates and the rate of compensation increases.

Dominion Energy uses December 31 as the measurement date for all of its employee benefit plans. Dominion Energy uses the market-related value of pension plan assets to determine the expected return on plan assets, a component of net periodic pension cost, for all pension plans. The market-related value recognizes changes in fair value on a straight-line basis over a four-year period, which reduces year-to-year volatility. Changes in fair value are measured as the difference between the expected and actual plan asset returns, including dividends, interest and realized and unrealized investment gains and losses. Since the market-related value recognizes changes in fair value over a four-year period, the future market-related value of pension plan assets will be impacted as previously unrecognized changes in fair value are recognized.

Dominion Energy’s pension and other postretirement benefit plans hold investments in trusts to fund employee benefit payments. Dominion Energy’s pension and other postretirement plan assets experienced aggregate actual returns (losses) of $1.5 billion and $1.9 billion in 2021 and 2020, respectively, versus expected returns of $1.0 billion and $933 million, respectively. Differences between

actual and expected returns on plan assets are accumulated and amortized during future periods. As such, any investment-related declines in these trusts will result in future increases in the net periodic cost recognized for such employee benefit plans and will be included in the determination of the amount of cash to be contributed to the employee benefit plans.

In the fourth quarter of 2021, Dominion Energy recognized the effects of a curtailment for certain pension plans resulting from an option that will provide certain active employees a one-time choice to transition to an enhanced defined contribution plan in lieu of accruing pension benefits for future services. The curtailment resulted in a decrease in the pension benefit obligation of $26 million and an increase to net periodic pension cost of $2 million. The effects of the curtailment are included in the measurement of Dominion Energy’s pension plans as of December 31, 2021.

In the third quarter of 2020, Dominion Energy remeasured certain pension plans due to a curtailment resulting from entering an agreement to sell substantially all of its gas transmission and storage operations to BHE. The remeasurement resulted in an increase in the pension benefit obligation of $497 million and a decrease in the fair value of the pension plan assets of $87 million. The impact of the remeasurement on net periodic pension benefit cost (credit) was recognized prospectively from the remeasurement date. The remeasurement increased the net periodic benefit credit by approximately $4 million for the year ending December 31, 2020, excluding the impacts of curtailments. The discount rate used for the remeasurement was 3.11% - 3.16% with all other assumptions used for the remeasurement consistent with the measurement as of December 31, 2019.

In the fourth quarter of 2020, Dominion Energy remeasured certain other postretirement benefit plans due to a curtailment and settlement resulting from Dominion Energy completing the GT&S Transaction. The remeasurement resulted in an increase in the accumulated postretirement benefit obligation of $16 million and a decrease in the fair value of the other postretirement benefit plan assets of $25 million. The impact of the remeasurement on net periodic benefit cost (credit) was recognized prospectively from the remeasurement date. The discount rate used for the remeasurement was 3.07% - 3.11%. The initial healthcare cost trend rate used for the remeasurement was 6.25% and decreased to 5.00% by 2025-2026. All other assumptions used for the remeasurement were consistent with the measurement as of December 31, 2019.

Voluntary Retirement Program

In March 2019, the Companies announced a voluntary retirement program to employees that meet certain age and service requirements. In 2019, upon the determinations made concerning the number of employees that elected to participate in the program, Dominion Energy recorded a charge of $427 million ($319 million after-tax) included within other operations and maintenance expense ($251 million), other taxes ($21 million), other income ($111 million) and discontinued operations ($44 million) and Virginia Power recorded a charge of $198 million ($146 million after-tax) included within other operations and maintenance expense ($190 million) and other taxes ($8 million) in their respective Consolidated Statements of Income.

In the second quarter of 2019, Dominion Energy remeasured its pension and other postretirement benefit plans as a result of the voluntary retirement program. The remeasurement resulted in an increase in the pension benefit obligation of $484 million and an increase in the fair value of the pension plan assets of $671 million. In addition, the remeasurement resulted in an increase in the accumulated postretirement benefit obligation of $101 million and an increase in the fair value of the other postretirement benefit plan assets of $156 million. The impact of the remeasurement on net periodic benefit cost (credit) was recognized prospectively from the remeasurement date. The discount rate used for the remeasurement was 4.07%—4.10% for the Dominion Energy pension plans and 4.05%—4.08% for the Dominion Energy other postretirement benefit plans. All other assumptions used for the remeasurement were consistent with the measurement as of December 31, 2018.

In the third quarter of 2019, Dominion Energy remeasured a pension plan as a result of a settlement from the voluntary retirement program at SCANA. The settlement and related remeasurement resulted in an increase in the pension benefit obligation of $37 million and an increase in the fair value of the pension plan assets of $51 million for Dominion Energy. The impact of the remeasurement on net periodic benefit cost (credit) was recognized prospectively from the remeasurement date. The discount rate used for the remeasurement was 3.57%. All other assumptions used for the remeasurement were consistent with the measurement as of December 31, 2018.

Funded Status

The following table summarizes the changes in pension plan and other postretirement benefit plan obligations and plan assets and includes a statement of the plans’ funded status for Dominion Energy:

		Pension Benefits								Other Postretirement Benefits
Year Ended December 31,		2021				2020				2021				2020
(millions, except percentages)
Dominion Energy
Changes in benefit obligation:
Benefit obligation at beginning of year		$	11,363			$	10,446			$	1,746			$	1,769
Service cost			170				173				25				28
Interest cost			317				351				46				58
Benefits paid			(488	)			(461	)			(105	)			(120	)
Actuarial (gains) losses during the year			(413	)			992				(161	)			33
Plan amendments			—				—				(14	)			(6	)
Settlements and curtailments(1)			(59	)			(138	)			—				(16	)
Benefit obligation at end of year		$	10,890			$	11,363			$	1,537			$	1,746
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year		$	10,979			$	9,631			$	2,100			$	1,880
Actual return (loss) on plan assets			1,202				1,602				294				300
Employer contributions			284				278				—				13
Benefits paid			(488	)			(461	)			(71	)			(93	)
Settlements(2)			(32	)			(71	)			—				—
Fair value of plan assets at end of year		$	11,945			$	10,979			$	2,323			$	2,100
Funded status at end of year		$	1,055			$	(384	)		$	786			$	354
Amounts recognized in the Consolidated Balance Sheets at December 31:
Noncurrent pension and other postretirement benefit assets		$	1,246			$	1,054			$	1,064			$	650
Other current liabilities			(12	)			(14	)			(15	)			(15	)
Noncurrent pension and other postretirement benefit liabilities			(179	)			(1,424	)			(263	)			(281	)
Net amount recognized		$	1,055			$	(384	)		$	786			$	354
Significant assumptions used to determine benefit obligations as of December 31:
Discount rate		3.06%-3.19%				2.73%–2.95%				3.04%-3.11%				2.69%–2.80%
Weighted average rate of increase for compensation		4.51%				4.53%				n/a				n/a
Crediting interest rate for cash balance and similar plans		1.81%-1.94%				1.93% - 2.15%				n/a				n/a

	(1)	2021 amounts include curtailments and settlements recognized primarily as a result of the employee choice program and settlements of nonqualified pension obligations. 2020 amounts include curtailment and settlements recognized as a result of the GT&S Transaction as well as settlements of qualified and nonqualified pension obligations.

	(2)	2021 amounts relate to settlements of nonqualified pension obligations and 2020 amounts relate primarily to settlements of qualified and nonqualified pension obligations.

Actuarial gains recognized during 2021 in Dominion Energy’s pension benefit obligations were $413 million primarily driven by an increase in discount rates. Actuarial losses recognized during 2020 in Dominion Energy’s pension benefit obligations include a $1.0 billion loss resulting primarily from a decrease in discount rate. Actuarial gains recognized during 2021 in Dominion Energy’s other postretirement benefit obligations were $161 million resulting from an increase in discount rates, better than expected per capita claims experience and changes in demographic and economic assumptions based on an experience study completed in 2021. Actuarial losses recognized during 2020 in Dominion Energy’s other postretirement benefit obligations include a $149 million loss resulting from a decrease in discount rates and were partially offset by an $85 million actuarial gain as a result of a completed experience study in one of Dominion Energy’s other postretirement plans and the impact of an update to healthcare claims assumptions.

The ABO for all of Dominion Energy’s defined benefit pension plans was $10.2 billion and $10.6 billion at December 31, 2021 and 2020, respectively.

Under its funding policies, Dominion Energy evaluates plan funding requirements annually, usually in the fourth quarter after receiving updated plan information from its actuary. Based on the funded status of each plan and other factors, Dominion Energy determines the amount of contributions for the current year, if any, at that time. In December 2021, Dominion Energy issued 250,000 shares of its Series C Preferred Stock to its qualified defined benefit pension plans, valued at $250 million. In December 2020, Dominion Energy contributed $250 million to its qualified defined benefit pension plans. During 2019, Dominion Energy made $520 million of contributions to its qualified defined benefit pension plans, including 6.1 million shares of its common stock valued at $499 million. The shares of common and preferred stock were contributed though private placements exempt from registration requirements, with an independent fiduciary and investment manager to a separate account within the qualified defined benefit pension plans. Dominion Energy also entered into a registration rights agreement with the independent fiduciary and investment manager pursuant to which Dominion Energy agreed to provide registration rights on customary terms with respect to the shares of

common and preferred stock. Dominion Energy is not required to make any contributions to its qualified defined benefit pension plans in 2022. Dominion Energy considers voluntary contributions from time to time, either in the form of cash or equity securities.

Certain of Dominion Energy’s subsidiaries fund other postretirement benefit costs through VEBAs. Dominion Energy’s remaining subsidiaries do not prefund other postretirement benefit costs but instead pay claims as presented. Dominion Energy did not make any contributions to VEBAs associated with its other postretirement plans in 2021 and 2020. Dominion Energy’s contributions to VEBAs, all of which pertained to employees of operations sold to BHE, totaled $12 million for 2019. Dominion Energy is not required to make any contributions to its VEBAs associated with its other postretirement plans in 2022. Dominion Energy considers voluntary contributions from time to time, either in the form of cash or equity securities.

The following table provides information on the benefit obligations and fair value of plan assets for plans with a benefit obligation in excess of plan assets for Dominion Energy:

		Pension Benefits								Other Postretirement Benefits
As of December 31,		2021				2020				2021				2020
(millions)
Dominion Energy
Benefit obligation		$	9,420			$	10,697			$	261			$	305
Fair value of plan assets			9,229				9,259				7				9

The following table provides information on the ABO and fair value of plan assets for Dominion Energy’s pension plans with an ABO in excess of plan assets:

As of December 31,		2021				2020
(millions)
Accumulated benefit obligation		$	127			$	9,970
Fair value of plan assets			53				9,259

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid for Dominion Energy’s plans:

		Estimated Future Benefit Payments
		Pension Benefits				Other Postretirement Benefits
(millions)
Dominion Energy
2022		$	513			$	101
2023			516				100
2024			529				99
2025			541				97
2026			548				96
2027-2031			2,833				450

Plan Assets

Dominion Energy’s overall objective for investing its pension and other postretirement plan assets is to achieve appropriate long-term rates of return commensurate with prudent levels of risk. To minimize risk, funds are broadly diversified among asset classes, investment strategies and investment advisors. The strategic target asset allocations for substantially all of Dominion Energy’s pension funds are 27% U.S. equity, 18% non-U.S. equity, 32% fixed income, 3% real estate and 20% other alternative investments. U.S. equity includes investments in large-cap, mid-cap and small-cap companies located in the U.S. Non-U.S. equity includes investments in large-cap and small-cap companies located outside of the U.S. including both developed and emerging markets. Fixed income includes corporate debt instruments of companies from diversified industries and U.S. Treasuries. The U.S. equity, non-U.S. equity and fixed income investments are in individual securities as well as mutual funds. Real estate includes equity real estate investment trusts and investments in partnerships. Other alternative investments include partnership investments in private equity, debt and hedge funds that follow several different strategies.

Dominion Energy also utilizes common/collective trust funds as an investment vehicle for its defined benefit plans. A common/collective trust fund is a pooled fund operated by a bank or trust company for investment of the assets of various organizations and individuals in a well-diversified portfolio. Common/collective trust funds are funds of grouped assets that follow various investment strategies.

Strategic investment policies are established for Dominion Energy’s prefunded benefit plans based upon periodic asset/liability studies. Factors considered in setting the investment policy include employee demographics, liability growth rates, future discount rates, the funded status of the plans and the expected long-term rate of return on plan assets. Deviations from the plans’ strategic allocation are a function of Dominion Energy’s assessments regarding short-term risk and reward opportunities in the capital markets and/or short-term market movements which result in the plans’ actual asset allocations varying from the strategic target asset allocations. Through periodic rebalancing, actual allocations are brought back in line with the target. Future asset/liability studies will focus on strategies to further reduce pension and other postretirement plan risk, while still achieving attractive levels of returns. Financial derivatives may be used to obtain or manage market exposures and to hedge assets and liabilities.

For fair value measurement policies and procedures related to pension and other postretirement benefit plan assets, see Note 6.

The fair values of Dominion Energy’s pension plan assets by asset category are as follows:

At December 31,		2021																2020
		Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
(millions)
Dominion Energy
Cash and cash equivalents		$	25			$	5			$	—			$	30			$	20			$	1			$	—			$	21
Common and preferred stocks:
U.S.(1)			2,592				244				—				2,836				2,405				—				—				2,405
International			1,773				19				—				1,792				1,727				—				—				1,727
Insurance contracts			—				279				—				279				—				409				—				409
Corporate debt instruments			81				1,439				—				1,520				32				1,385				—				1,417
Government securities			39				914				—				953				30				772				—				802
Total recorded at fair value		$	4,510			$	2,900			$	—			$	7,410			$	4,214			$	2,567			$	—			$	6,781
Assets recorded at NAV(2):
Common/collective trust funds															3,010																2,905
Alternative investments:
Real estate funds															116																108
Private equity funds															1,233																856
Debt funds															162																168
Hedge funds															14																13
Total recorded at NAV														$	4,535															$	4,050
Total investments(3)														$	11,945															$	10,831

(1)	Includes $258 million of Dominion Energy preferred stock and no Dominion Energy common stock at December 31, 2021 and $365 million of Dominion Energy common stock at December 31, 2020.

(2)	These investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient are not required to be categorized in the fair value hierarchy.

(3)

Excludes net assets related to pending sales of securities of $35 million, net accrued income of $27 million, and includes net assets related to pending purchases of securities of $62 million at December 31, 2021. Excludes net assets related to pending sales of securities and advanced subscriptions of $198 million, net accrued income of $20 million, and includes net assets related to pending purchases of securities of $71 million at December 31, 2020.

The fair values of Dominion Energy’s other postretirement plan assets by asset category are as follows:

At December 31,		2021																2020
		Level 1				Level 2				Level 3				Total				Level 1				Level 2				Level 3				Total
(millions)
Dominion Energy
Cash and cash equivalents		$	3			$	1			$	—			$	4			$	—			$	2			$	—			$	2
Common and preferred stocks:
U.S.			898				14				—				912				817				—				—				817
International			256				1				—				257				240				—				—				240
Insurance contracts			—				16				—				16				—				23				—				23
Corporate debt instruments			5				61				—				66				2				60				—				62
Government securities			2				47				—				49				2				42				—				44
Total recorded at fair value		$	1,164			$	140			$	—			$	1,304			$	1,061			$	127			$	—			$	1,188
Assets recorded at NAV(1):
Common/collective trust funds															840																765
Alternative investments:
Real estate funds															13																10
Private equity funds															152																117
Debt funds															9																10
Hedge funds															1																1
Total recorded at NAV														$	1,015															$	903
Total investments(2)														$	2,319															$	2,091

(1)	These investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient are not required to be categorized in the fair value hierarchy.

(2)

Excludes net assets related to pending sales of securities of $5 million, net accrued income of $2 million, and includes net assets related to pending purchases of securities of $3 million at December 31, 2021. Excludes net assets related to pending sales of securities of $10 million, net accrued income of $2 million, and includes net assets related to pending purchases of securities of $2 million at December 31, 2020.

The plan assets investments are determined based on the fair values of the investments and the underlying investments, which have been determined as follows:

	•	Cash and Cash Equivalents—Investments are held primarily in short-term notes and treasury bills, which are valued at cost plus accrued interest.

	•	Common and Preferred Stocks—Investments are valued at the closing price reported on the active market on which the individual securities are traded.

	•	Insurance Contracts—Investments in Group Annuity Contracts with John Hancock were entered into after 1992 and are stated at fair value based on the fair value of the underlying securities as provided by the managers and include investments in U.S. government securities, corporate debt instruments and state and municipal debt securities.

	•	Corporate Debt Instruments—Investments are valued using pricing models maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar instruments, the instrument is valued under a discounted cash flows approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable, such as credit and liquidity risks or a broker quote, if available.

	•	Government Securities—Investments are valued using pricing models maximizing the use of observable inputs for similar securities.

	•	Common/Collective Trust Funds—Common/collective trust funds invest in debt and equity securities and other instruments with characteristics similar to those of the funds’ benchmarks. The primary objectives of the funds are to seek investment returns that approximate the overall performance of their benchmark indexes. These benchmarks are major equity indices, fixed income indices and money market indices that focus on growth, income and liquidity strategies, as applicable. Investments in common/collective trust funds are stated at the NAV as determined by the issuer of the common/collective trust funds and are based on the fair value of the underlying investments held by the fund less its liabilities. The NAV is used as a practical expedient to estimate fair value. The common/collective trust funds do not have any unfunded commitments, and do not have any applicable liquidation periods or defined terms/periods to be held. The majority of the common/collective trust funds have limited withdrawal or redemption rights during the term of the investment.

	•	Alternative Investments—Investments in real estate funds, private equity funds, debt funds and hedge funds are stated at fair value based on the NAV of the plan’s proportionate share of the partnership, joint venture or other alternative investment’s fair value as determined by reference to audited financial statements or NAV statements provided by the investment manager. The NAV, which is used as a practical expedient to estimate fair value, is adjusted for contributions and distributions occurring between the investment manager’s and Dominion Energy’s measurement date. These valuations also involve assumptions and methods that are reviewed, evaluated, and adjusted, if necessary, by Dominion Energy.

Net Periodic Benefit (Credit) Cost

The service cost component of net periodic benefit (credit) cost is reflected in other operations and maintenance expense in Dominion Energy’s Consolidated Statements of Income, except for $1 million, $13 million and $16 million for the years ended December 31, 2021, 2020 and 2019, respectively, presented in discontinued operations. The non-service cost components of net periodic benefit (credit) cost are reflected in other income in Dominion Energy’s Consolidated Statements of Income. The components of the provision for net periodic benefit (credit) cost and amounts recognized in other comprehensive income and regulatory assets and liabilities for Dominion Energy plans are as follows:

		Pension Benefits												Other Postretirement Benefits
Year Ended December 31,		2021				2020				2019				2021				2020				2019
(millions, except percentages)
Dominion Energy
Service cost		$	170			$	173			$	162			$	25			$	28			$	26
Interest cost			317				351				394				46				58				68
Expected return on plan assets			(834	)			(777	)			(708	)			(173	)			(156	)			(140	)
Amortization of prior service (credit) cost			—				1				1				(42	)			(49	)			(52	)
Amortization of net actuarial loss			193				206				172				4				6				10
Settlements, curtailments and special termination benefits			10				14				72				—				(59	)			42
Net periodic benefit (credit) cost		$	(144	)		$	(32	)		$	93			$	(140	)		$	(172	)		$	(46	)
Changes in plan assets and benefit obligations recognized in other comprehensive income and regulatory assets and liabilities:
Current year net actuarial (gain) loss		$	(782	)		$	166			$	16			$	(282	)		$	(110	)		$	(98	)
Prior service (credit) cost			—				—				—				(13	)			(6	)			2
Settlements and curtailments			(36	)			(81	)			6				—				59				—
Less amounts included in net periodic benefit cost:
Amortization of net actuarial loss			(193	)			(206	)			(172	)			(4	)			(6	)			(10	)
Amortization of prior service credit (cost)			—				(1	)			(1	)			42				49				52
Total recognized in other comprehensive income and regulatory assets and liabilities		$	(1,011	)		$	(122	)		$	(151	)		$	(257	)		$	(14	)		$	(54	)
Significant assumptions used to determine periodic cost:
Discount rate		2.73%-3.29%				2.77%-3.63%				3.57%-4.43%				2.69%-2.80%				3.07%-3.52%				4.05% to 4.41%
Expected long-term rate of return on plan assets		7.00%-8.45%				7.00%-8.60%				7.00% -8.65%				8.45%				8.50%				8.50%
Weighted average rate of increase for compensation		4.53%				4.23%				4.20%				n/a				n/a				n/a
Crediting interest rate for cash balance and similar plans		1.93%-2.15%				2.31-2.83%				2.77-3.63%				n/a				n/a				n/a
Healthcare cost trend rate(1)														6.25%				6.25%				6.50% to 6.60%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)(1)														5.00%				5.00%				5.00%
Year that the rate reaches the ultimate trend rate(1)														2026-2027				2025-2026				2023-2025

(1)	Assumptions used to determine net periodic cost for the following year.

The components of AOCI and regulatory assets and liabilities for Dominion Energy’s plans that have not been recognized as components of net periodic benefit (credit) cost are as follows:

		Pension Benefits								Other Postretirement Benefits
At December 31,		2021				2020				2021				2020
(millions)
Dominion Energy
Net actuarial loss		$	2,198			$	3,207			$	(166	)		$	120
Prior service (credit) cost			2				4				(203	)			(232	)
Total(1)		$	2,200			$	3,211			$	(369	)		$	(112	)

(1)	As of December 31, 2021, of the $2.2 billion and $(369) million related to pension benefits and other postretirement benefits, $1.7 billion and $(155) million, respectively, are included in AOCI, with the remainder included in regulatory assets and liabilities. As of December 31, 2020,

	of the $3.2 billion and $(112) million related to pension benefits and other postretirement benefits, $1.9 billion and $(40) million, respectively, are included in AOCI, with the remainder included in regulatory assets and liabilities.

The expected long-term rates of return on plan assets, discount rates, healthcare cost trend rates and mortality are critical assumptions in determining net periodic benefit (credit) cost. Dominion Energy develops non-investment related assumptions, which are then compared to the forecasts of an independent investment advisor to ensure reasonableness. An internal committee selects the final assumptions used for Dominion Energy’s pension and other postretirement plans including discount rates, expected long-term rates of return, healthcare cost trend rates and mortality rates.

Dominion Energy determines the expected long-term rates of return on plan assets for its pension plans and other postretirement benefit plans by using a combination of:

	•	Expected inflation and risk-free interest rate assumptions;

	•	Historical return analysis to determine long term historic returns as well as historic risk premiums for various asset classes;

	•	Expected future risk premiums, asset classes’ volatilities and correlations;

	•	Forward-looking return expectations derived from the yield on long-term bonds and the expected long-term returns of major capital market assumptions; and

	•	Investment allocation of plan assets.

Dominion Energy determines discount rates from analyses of AA/Aa rated bonds with cash flows matching the expected payments to be made under its plans.

Mortality rates are developed from actual and projected plan experience for postretirement benefit plans. Dominion Energy’s actuary conducts an experience study periodically as part of the process to select its best estimate of mortality. Dominion Energy considers both standard mortality tables and improvement factors as well as the plans’ actual experience when selecting a best estimate.

Assumed healthcare cost trend rates have a significant effect on the amounts reported for Dominion Energy’s retiree healthcare plans. Dominion Energy establishes the healthcare cost trend rate assumption based on analyses of various factors including the specific provisions of its medical plans, actual cost trends experienced and projected and demographics of plan participants.

Virginia Power—Participation in Defined Benefit Plans

Virginia Power employees are covered by the Dominion Energy Pension Plan described above. As a participating employer, Virginia Power is subject to Dominion Energy’s funding policy, which is to contribute annually an amount that is in accordance with ERISA. During 2019, Virginia Power made no contributions to the Dominion Energy Pension Plan. During 2020, Virginia Power made a payment to Dominion Energy for $313 million related to its participation in the Dominion Energy Pension Plan. In addition, in December 2020, Dominion Energy notified Virginia Power of a required contribution of $151 million, recorded in payables to affiliates in Virginia Power’s Consolidated Balance Sheets at December 31, 2020, which was paid in 2021. While Virginia Power has not been notified by Dominion Energy of any required contributions to be made in 2022, it anticipates that it may have to contribute approximately $175 million as a result of Dominion Energy’s contribution made in December 2021. Virginia Power’s net periodic pension cost related to this plan was $86 million, $118 million and $152 million in 2021, 2020 and 2019, respectively. Net periodic benefit (credit) cost is reflected in other operations and maintenance expense in Virginia Power’s Consolidated Statements of Income. The funded status of various Dominion Energy subsidiary groups and employee compensation are the basis for determining the share of total pension costs for participating Dominion Energy subsidiaries. See Note 25 for Virginia Power amounts due to/from Dominion Energy related to this plan.

Retiree healthcare and life insurance benefits, for Virginia Power employees are covered by the Dominion Energy Retiree Health and Welfare Plan described above. Virginia Power’s net periodic benefit (credit) cost related to this plan was $(72) million, $(58) million and $(27) million in 2021, 2020 and 2019, respectively. Net periodic benefit (credit) cost is reflected in other operations and maintenance expense in Virginia Power’s Consolidated Statements of Income. Employee headcount is the basis for determining the share of total other postretirement benefit costs for participating Dominion Energy subsidiaries. See Note 25 for Virginia Power amounts due to/from Dominion Energy related to this plan.

Dominion Energy holds investments in trusts to fund employee benefit payments for the pension and other postretirement benefit plans in which Virginia Power’s employees participate. Any investment-related declines in these trusts will result in future increases in the net periodic cost recognized for such employee benefit plans and will be included in the determination of the amount of cash that Virginia Power will provide to Dominion Energy for its share of employee benefit plan contributions.

Virginia Power funds other postretirement benefit costs through VEBAs. During 2021, 2020 and 2019, Virginia Power made no contributions to the VEBAs and does not expect to contribute to the VEBAs in 2022.

Defined Contribution Plans

Dominion Energy also sponsors defined contribution employee savings plans that cover substantially all employees. During 2021, 2020 and 2019, Dominion Energy recognized $65 million, $67 million and $69 million, respectively, as employer matching contributions to these plans, excluding discontinued operations. Virginia Power also participates in these employee savings plans. During 2021, 2020 and 2019, Virginia Power recognized $20 million, $19 million and $20 million, respectively, as employer matching contributions to these plans.

NOTE 23. COMMITMENTS AND CONTINGENCIES

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

Environmental Matters

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

Air

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

Ozone Standards

The EPA published final non-attainment designations for the October 2015 ozone standard in June 2018 with states required to develop plans to address the new standard. Certain states in which the Companies operate have developed plans, and had such plans approved or partially approved by the EPA, which are not expected to have a material impact on the Companies’ results of operations or cash flows. However, until implementation plans for the standard are developed and approved for all states in which the Companies operate, the Companies are unable to predict whether or to what extent the new rules will ultimately require additional controls. The expenditures required to implement additional controls could have a material impact on the Companies’ results of operations and cash flows.

ACE Rule

In July 2019, the EPA published the final rule informally referred to as the ACE Rule, as a replacement for the Clean Power Plan. The ACE Rule regulated GHG emissions from existing coal-fired power plants pursuant to Section 111(d) of the CAA and required states to develop plans by July 2022 establishing unit-specific performance standards for existing coal-fired power plants. In January 2021, the U.S. Court of Appeals for the D.C. Circuit vacated the ACE Rule and remanded it to the EPA. This decision would take effect upon issuance of the court’s mandate. In March 2021, the court issued a partial mandate vacating and remanding all parts of the ACE Rule except for the portion of the ACE Rule that repealed the Clean Power Plan. In October 2021, the U.S. Supreme Court agreed to hear a challenge of the U.S. Court of Appeals for the D.C. Circuit’s decision on the ACE Rule. While the EPA has stated its intention to replace the ACE Rule, it is unknown at this time if or how the EPA will issue a replacement for the ACE Rule and how that replacement will affect the Companies’ operations, financial condition and/or cash flows.

Carbon Regulations

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

In December 2018, the EPA proposed revised Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources. The proposed rule would amend the previous determination that the best system of emission reduction for newly constructed coal-fired steam generating units is no longer partial carbon capture and storage. Instead, the proposed revised best system of emission reduction for this source category is the most efficient demonstrated steam cycle (e.g., supercritical steam conditions for large units and subcritical steam conditions for small units) in combination with best operating practices. In January 2021, the EPA published a final rule affirming that fossil fuel-fired electric generating units meet the requirement that a source category “significantly contribute” to endangering air pollution for the purposes of regulating GHG emissions from new, modified and reconstructed stationary sources. The January 2021 rule also established a threshold for the “significant contribution” threshold that would have meant that no other source category, such as oil and gas facilities, petroleum refineries, and boilers, would meet that requirement at this time. In April 2021, the U.S. Court of Appeals for the D.C. Circuit granted an unopposed motion by the EPA to vacate and remand the January 2021 rule. The proposed revision to the performance standards for coal-fired steam generating units remains pending. Until the EPA ultimately takes final action on this rulemaking, the Companies cannot predict the impact to their results of operations, financial condition and/or cash flows.

Water

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

Regulation 316(b)

In October 2014, the final regulations under Section 316(b) of the CWA that govern existing facilities and new units at existing facilities that employ a cooling water intake structure and that have flow levels exceeding a minimum threshold became effective. The rule establishes a national standard for impingement based on seven compliance options, but forgoes the creation of a single technology standard for entrainment. Instead, the EPA has delegated entrainment technology decisions to state regulators. State regulators are to make case-by-case entrainment technology determinations after an examination of five mandatory facility-specific factors, including a social cost-benefit test, and six optional facility-specific factors. The rule governs all electric generating stations with water withdrawals above two MGD, with a heightened entrainment analysis for those facilities over 125 MGD. Dominion Energy and Virginia Power currently have 15 and nine facilities, respectively, that are subject to the final regulations. Dominion Energy is also working with the EPA and state regulatory agencies to assess the applicability of Section 316(b) to eight hydroelectric facilities, including three Virginia Power facilities. The Companies anticipate that they may have to install impingement control technologies at certain of these stations that have once-through cooling systems. The Companies are currently evaluating the need or potential for

entrainment controls under the final rule as these decisions will be made on a case-by-case basis after a thorough review of detailed biological, technological, and cost benefit studies. DESC is conducting studies and implementing plans as required by the rule to determine appropriate intake structure modifications at certain facilities to ensure compliance with this rule. While the impacts of this rule could be material to the Companies’ results of operations, financial condition and/or cash flows, the existing regulatory frameworks in South Carolina and Virginia provide rate recovery mechanisms that could substantially mitigate any such impacts for the regulated electric utilities.

Effluent Limitations Guidelines

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

Waste Management and Remediation

The operations of the Companies are subject to a variety of state and federal laws and regulations governing the management and disposal of solid and hazardous waste, and release of hazardous substances associated with current and/or historical operations. The CERCLA, as amended, and similar state laws, may impose joint, several and strict liability for cleanup on potentially responsible parties who owned, operated or arranged for disposal at facilities affected by a release of hazardous substances. In addition, many states have created programs to incentivize voluntary remediation of sites where historical releases of hazardous substances are identified and property owners or responsible parties decide to initiate cleanups.

From time to time, the Companies may be identified as a potentially responsible party in connection with the alleged release of hazardous substances or wastes at a site. Under applicable federal and state laws, the Companies could be responsible for costs associated with the investigation or remediation of impacted sites, or subject to contribution claims by other responsible parties for their costs incurred at such sites. The Companies also may identify, evaluate and remediate other potentially impacted sites under voluntary state programs. Remediation costs may be subject to reimbursement under the Companies’ insurance policies, rate recovery mechanisms, or both. Except as described below, the Companies do not believe these matters will have a material effect on results of operations, financial condition and/or cash flows.

Dominion Energy has determined that it is associated with former manufactured gas plant sites, including certain sites associated with Virginia Power. At 13 sites associated with Dominion Energy, including certain sites acquired in the SCANA Combination, remediation work has been substantially completed under federal or state oversight. Where required, the sites are following state-approved groundwater monitoring programs. Dominion Energy has proposed remediation plans associated with two sites, including one at Virginia Power, and expects to commence remediation activities in 2022 depending on receipt of final permits and approvals. For one site associated with Dominion Energy, final approval of an updated work plan was received from the Army Corps of Engineers in December 2021, resulting in an additional $11 million of reserves and corresponding regulatory assets. At December 31, 2021 and 2020, Dominion Energy had $45 million and $42 million, respectively, of reserves recorded. Dominion Energy’s reserves include charges of $14 million ($11 million after-tax) recorded in 2020, in other operations and maintenance expense in the Consolidated Statements of Income. At December 31, 2021 and 2020, Virginia Power had $25 million and $26 million, respectively, of reserves recorded. Virginia Power’s reserves include charges of $10 million ($7 million after-tax) recorded in 2020, in other operations and maintenance expense in the Consolidated Statements of Income. Dominion Energy is associated with 12 additional sites, including two associated with Virginia Power, which are not under investigation by any state or federal environmental agency nor the subject of any current or proposed plans to perform remediation activities. Due to the uncertainty surrounding such sites, the Companies are unable to make an estimate of the potential financial statement impacts.

Other Legal Matters

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

SCANA Legal Proceedings

The following describes certain legal proceedings involving Dominion Energy, SCANA or DESC relating primarily to events occurring before closing of the SCANA Combination. No reference to, or disclosure of, any proceeding, item or matter described below shall be construed as an admission or indication that such proceeding, item or matter is material. For certain of these matters, and unless otherwise noted therein, Dominion Energy is unable to estimate a reasonable range of possible loss and the related financial statement impacts, but for any such matter there could be a material impact to its results of operations, financial condition and/or cash flows. For the matters for which Dominion Energy is able to reasonably estimate a probable loss, Dominion Energy’s Consolidated Balance Sheets at December 31, 2021 and 2020 include reserves of $274 million and $208 million, respectively, included in other current liabilities, and insurance receivables of $118 million and $8 million, respectively, included within other receivables. These balances at December 31, 2021 and 2020 include $85 million and $8 million, respectively, of offsetting reserves and insurance receivables related to personal injury or wrongful death cases which are currently pending. Dominion Energy’s Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019 include charges of $100 million ($75 million after-tax), $90 million ($68 million after-tax) and $641 million ($480 million after-tax), respectively, within impairment of assets and other charges (reflected in the Corporate and Other segment. In addition, Dominion Energy’s Consolidated Statements of Income for the year ended December 31, 2020 include charges of $25 million ($25 million after-tax) within other income (expense) (reflected in the Corporate and Other segment).

Ratepayer Class Actions

In May 2018, a consolidated complaint against DESC, SCANA and the State of South Carolina was filed in the State Court of Common Pleas in Hampton County, South Carolina (the DESC Ratepayer Case). The plaintiffs alleged, among other things, that DESC was negligent and unjustly enriched, breached alleged fiduciary and contractual duties and committed fraud and misrepresentation in failing to properly manage the NND Project, and that DESC committed unfair trade practices and violated state anti-trust laws. In December 2018, the State Court of Common Pleas in Hampton County entered an order granting preliminary approval of a class action settlement. The court entered an order granting final approval of the settlement in June 2019, which became effective in July 2019. The settlement agreement, contingent upon the closing of the SCANA Combination, provided that SCANA and DESC establish an escrow account and proceeds from the escrow account would be distributed to the plaintiffs, after payment of certain taxes, attorneys' fees and other expenses and administrative costs. The escrow account would include (1) up to $2.0 billion, net of a credit of up to $2.0 billion in future electric bill relief, which would inure to the benefit of the escrow account in favor of class members over a period of time established by the South Carolina Commission in its order related to matters before the South Carolina Commission related to the NND Project, (2) a cash payment of $115 million and (3) the transfer of certain DESC-owned real estate or sales proceeds from the sale of such properties, which counsel for the plaintiffs estimated to have an aggregate value between $60 million and $85 million. At the closing of the SCANA Combination, SCANA and DESC funded the cash payment portion of the escrow account. In July 2019, DESC transferred $117 million representing the cash payment, plus accrued interest, to the plaintiffs. Through August 2020, property, plant and equipment with a net recorded value of $27 million had been transferred to the plaintiffs in coordination with the court-appointed real estate trustee to satisfy the settlement agreement. In September 2020, the court entered an order approving a final resolution of the transfer of real estate or sales proceeds with a cash contribution of $38.5 million by DESC and the conveyance of property, plant and equipment with a net recorded value of $3 million, which was completed by DESC in October 2020. In December 2021, the court approved a motion for and DESC completed the repurchase of $8 million of property, plant and equipment previously transferred to the plaintiffs.

In September 2017, a purported class action was filed by Santee Cooper ratepayers against Santee Cooper, DESC, Palmetto Electric Cooperative, Inc. and Central Electric Power Cooperative, Inc. in the State Court of Common Pleas in Hampton County, South Carolina (the Santee Cooper Ratepayer Case). The allegations were substantially similar to those in the DESC Ratepayer Case. In March 2020, the parties executed a settlement agreement relating to this matter as well as the Luquire Case and the Glibowski Case described below. The settlement agreement provided that Dominion Energy and Santee Cooper establish a fund for the benefit of class members in the amount of $520 million, of which Dominion Energy’s portion was $320 million of shares of Dominion Energy common stock. In July 2020, the court issued a final approval of the settlement agreement. In September 2020, Dominion Energy issued $322 million of shares of Dominion Energy common stock to satisfy its obligation under the settlement agreement, including interest charges.

In July 2019, a similar purported class action was filed by certain Santee Cooper ratepayers against DESC, SCANA, Dominion Energy and former directors and officers of SCANA in the State Court of Common Pleas in Orangeburg, South Carolina (the Luquire Case). In August 2019, DESC, SCANA and Dominion Energy were voluntarily dismissed from the case. The claims were similar to the Santee Cooper Ratepayer Case. In March 2020, the parties executed a settlement agreement as described above relating to this matter as well as the Santee Cooper Ratepayer Case and the Glibowski Case. This case was dismissed as part of the Santee Cooper Ratepayer Case settlement described above.

RICO Class Action

In January 2018, a purported class action was filed, and subsequently amended, against SCANA, DESC and certain former executive officers in the U.S. District Court for the District of South Carolina (the Glibowski Case). The plaintiff alleged, among other things, that SCANA, DESC and the individual defendants participated in an unlawful racketeering enterprise in violation of RICO and conspired to violate RICO by fraudulently inflating utility bills to generate unlawful proceeds. In March 2020, the parties executed a settlement agreement as described above relating to this matter as well as the Santee Cooper Ratepayer Case and the Luquire Case. This case was dismissed as part of the Santee Cooper Ratepayer Case settlement described above.

SCANA Shareholder Litigation

In September 2017, a purported class action was filed against SCANA and certain former executive officers and directors in the U.S. District Court for the District of South Carolina. Subsequent additional purported class actions were separately filed against all or nearly all of these defendants (collectively the SCANA Securities Class Action). In January 2018, the U.S. District Court for the District of South Carolina consolidated these suits, and the plaintiffs filed a consolidated amended complaint in March 2018. The plaintiffs alleged, among other things, that the defendants violated §10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, and that the individually named defendants are liable under §20(a) of the same act. In December 2019, the parties executed a settlement agreement pursuant to which SCANA would pay $192.5 million, up to $32.5 million of which could be satisfied through the issuance of shares of Dominion Energy common stock, subject to court approval. In February 2020, the U.S. District Court for the District of South Carolina granted preliminary approval of the settlement agreement, pending a fairness hearing, and granted final approval in July 2020. In March 2020, SCANA funded an escrow account with $160 million in cash and paid the balance of $32.5 million in cash in August 2020 to satisfy the settlement.

In September 2017, a shareholder derivative action was filed against certain former executive officers and directors of SCANA in the State Court of Common Pleas in Richland County, South Carolina (the State Court Derivative Case). In September 2018, this action was consolidated with another action in the Business Court Pilot Program in Richland County. The plaintiffs allege, among other things, that the defendants breached their fiduciary duties to shareholders by their gross mismanagement of the NND Project, and that the defendants were unjustly enriched by bonuses they were paid in connection with the project. In January 2019, the defendants filed a motion to dismiss the consolidated action. In February 2019, one action was voluntarily dismissed. In March 2020, the court denied the defendants’ motion to dismiss. In April 2020, the defendants filed a notice of appeal with the South Carolina Court of Appeals and a petition with the Supreme Court of South Carolina seeking appellate review of the denial of the motion to dismiss. In June 2020, the plaintiffs filed a motion to dismiss the appeal with the South Carolina Court of Appeals, which was granted in July 2020. In August 2020, the Supreme Court of South Carolina denied the defendants’ petition seeking appellate review. Also in August 2020, the defendants filed a petition for rehearing with the South Carolina Court of Appeals relating to the July 2020 ruling by the court, which was denied in October 2020. In November 2020, SCANA filed a petition of certiorari with the Supreme Court of South Carolina seeking appellate review of the denial of SCANA’s motion to dismiss. This petition was denied in June 2021. Also in June 2021, the parties reached an agreement in principle in the amount of $33 million to resolve this matter, subject to court approval. This settlement was reached in contemplation of and will be utilized to satisfy a portion of the Federal Court Merger Case and the State Court Merger Case discussed below. In November 2021, the parties executed a settlement agreement and filed with the State Court of Common Pleas in Richland County, South Carolina for approval.

In January 2018, a purported class action was filed against SCANA, Dominion Energy and certain former executive officers and directors of SCANA in the State Court of Common Pleas in Lexington County, South Carolina (the City of Warren Lawsuit). The plaintiff alleges, among other things, that defendants violated their fiduciary duties to shareholders by executing a merger agreement that would unfairly deprive plaintiffs of the true value of their SCANA stock, and that Dominion Energy aided and abetted these actions. Among other remedies, the plaintiff seeks to enjoin and/or rescind the merger.

In February 2018, a purported class action was filed against Dominion Energy and certain former directors of SCANA and DESC in the State Court of Common Pleas in Richland County, South Carolina (the Metzler Lawsuit). The allegations made and the relief sought by the plaintiffs are substantially similar to that described for the City of Warren Lawsuit.

In September 2019, the U.S. District Court for the District of South Carolina granted the plaintiffs’ motion to consolidate the City of Warren Lawsuit and the Metzler Lawsuit (the Federal Court Merger Case). In October 2019, the plaintiffs filed an amended complaint against certain former directors and executive officers of SCANA and DESC, which stated substantially similar allegations to those in the City of Warren Lawsuit and the Metzler Lawsuit as well as an inseparable fraud claim. In November 2019, the defendants filed a motion to dismiss. In April 2020, the U.S. District Court for the District of South Carolina denied the motion to dismiss. In May 2020, SCANA filed a motion to intervene, which was denied in August 2020. In September 2020, SCANA filed a notice of appeal with the U.S. Court of Appeals for the Fourth Circuit. In June 2021, the parties reached an agreement in principle in the amount of $63 million to resolve this matter as well as the State Court Merger Case described below, subject to court approval. This settlement was reached in contemplation of and will be partially satisfied by the State Court Derivative Case settlement described above. In November 2021, the parties executed a settlement agreement, as described above relating to this matter as well as the State Court Derivative Case and the State Court Merger Case, and filed with the State Court of Common Pleas in Richland County, South Carolina for approval.

In May 2019, a case was filed against certain former executive officers and directors of SCANA in the State Court of Common Pleas in Richland County, South Carolina (the State Court Merger Case). The plaintiff alleges, among other things, that the defendants breached their fiduciary duties to shareholders by their gross mismanagement of the NND Project, were unjustly enriched by the bonuses they were paid in connection with the project and breached their fiduciary duties to secure and obtain the best price for the sale of SCANA. Also in May 2019, the case was removed to the U.S. District Court of South Carolina by the non-South Carolina defendants. In June 2019, the plaintiffs filed a motion to remand the case to state court. In January 2020, the case was remanded to state court. In February 2020, the defendants filed a motion to dismiss. In June 2021, the parties reached an agreement in principle as described above relating to this matter as well as the Federal Court Merger Case and the State Court Derivative Case. In November 2021, the parties executed a settlement agreement, as described above relating to this matter as well as the State Court Derivative Case and the Federal Court Merger Case, and filed with the State Court of Common Pleas in Richland County, South Carolina for approval.

Employment Class Actions and Indemnification

In August 2017, a case was filed in the U.S. District Court for the District of South Carolina on behalf of persons who were formerly employed at the NND Project. In July 2018, the court certified this case as a class action. In February 2019, certain of these plaintiffs filed an additional case, which case has been dismissed and the plaintiffs have joined the case filed August 2017. The plaintiffs allege, among other things, that SCANA, DESC, Fluor Corporation and Fluor Enterprises, Inc. violated the Worker Adjustment and Retraining Notification Act in connection with the decision to stop construction at the NND Project. The plaintiffs allege that the defendants failed to provide adequate advance written notice of their terminations of employment and are seeking damages, which could be as much as $100 million for 100% of the NND Project. In January 2021, the U.S. District Court for the District of South Carolina granted summary judgment in favor of SCANA, DESC, Fluor Corporation and Fluor Enterprises, Inc. In February 2021, the plaintiffs filed a notice of appeal with the U.S. Court of Appeals for the Fourth Circuit. In November 2021, the U.S Court of Appeals for the Fourth Circuit affirmed the lower court ruling.

In September 2018, a case was filed in the State Court of Common Pleas in Fairfield County, South Carolina by Fluor Enterprises, Inc. and Fluor Daniel Maintenance Services, Inc. against DESC and Santee Cooper. The plaintiffs make claims for indemnification, breach of contract and promissory estoppel arising from, among other things, the defendants' alleged failure and refusal to defend and indemnify the Fluor defendants in the aforementioned case. This case is pending.

FILOT Litigation and Related Matters

In November 2017, Fairfield County filed a complaint and a motion for temporary injunction against DESC in the State Court of Common Pleas in Fairfield County, South Carolina, making allegations of breach of contract, fraud, negligent misrepresentation, breach of fiduciary duty, breach of implied duty of good faith and fair dealing and unfair trade practices related to DESC’s termination of the FILOT agreement between DESC and Fairfield County related to the NND Project. The plaintiff sought a temporary and permanent injunction to prevent DESC from terminating the FILOT agreement. The plaintiff withdrew the motion for temporary injunction in December 2017. In July 2021, the parties executed a settlement agreement requiring DESC to pay $99 million, which could be satisfied in either cash or shares of Dominion Energy common stock. Also in July 2021, the State Court of Common Pleas in Fairfield County, South Carolina approved the settlement. In July 2021, Dominion Energy issued 1.4 million shares of Dominion Energy common stock to satisfy DESC’s obligation under the settlement agreement.

Governmental Proceedings and Investigations

In June 2018, DESC received a notice of proposed assessment of approximately $410 million, excluding interest, from the SCDOR following its audit of DESC’s sales and use tax returns for the periods September 1, 2008 through December 31, 2017. The proposed assessment, which includes 100% of the NND Project, is based on the SCDOR’s position that DESC’s sales and use tax exemption for the NND Project does not apply because the facility will not become operational. In December 2020, the parties reached an agreement in principle in the amount of $165 million to resolve this matter. In June 2021, the parties executed a settlement agreement which allows DESC to fund the settlement amount through a combination of cash, shares of Dominion Energy common stock or real estate with an initial payment of at least $43 million in shares of Dominion Energy common stock. In August 2021, Dominion Energy issued 0.6 million shares of its common stock to satisfy DESC’s obligation for the initial payment under the settlement agreement.

In September and October 2017, SCANA was served with subpoenas issued by the U.S. Attorney’s Office for the District of South Carolina and the Staff of the SEC’s Division of Enforcement seeking documents related to the NND Project. In February 2020, the SEC filed a complaint against SCANA, two of its former executive officers and DESC in the U.S. District Court for the District of South Carolina alleging that the defendants violated federal securities laws by making false and misleading statements about the NND Project. In April 2020, SCANA and DESC reached an agreement in principle with the Staff of the SEC’s Division of Enforcement to settle, without admitting or denying the allegations in the complaint. In December 2020, the U.S. District Court for the District of South Carolina issued an order approving the settlement which required SCANA to pay a civil monetary penalty totaling $25 million, and SCANA and DESC to pay disgorgement and prejudgment interest totaling $112.5 million, which disgorgement and prejudgment interest amount were deemed satisfied by the settlements in the SCANA Securities Class Action and the DESC Ratepayer Case.

SCANA paid the civil penalty in December 2020. The SEC civil action against two former executive officers of SCANA remains pending and is currently subject to a stay granted by the court in June 2020 at the request of the U.S. Attorney’s Office for the District of South Carolina.

In addition, the South Carolina Law Enforcement Division is conducting a criminal investigation into the handling of the NND Project by SCANA and DESC. Dominion Energy is cooperating fully with the investigations by the U.S. Attorney’s Office and the South Carolina Law Enforcement Division, including responding to additional subpoenas and document requests. Dominion Energy has also entered into a cooperation agreement with the U.S. Attorney’s Office and the South Carolina Attorney General’s Office. The cooperation agreement provides that in consideration of its full cooperation with these investigations to the satisfaction of both agencies, neither such agency will criminally prosecute or bring any civil action against Dominion Energy or any of its current, previous, or future direct or indirect subsidiaries related to the NND Project. A former executive officer of SCANA entered a plea agreement with the U.S. Attorney’s Office and the South Carolina Attorney General’s Office in June 2020 and entered a guilty plea with the U.S. District Court for the District of South Carolina in July 2020. Another former executive officer of SCANA entered a plea agreement with the U.S. Attorney's Office and the South Carolina Attorney General's Office in November 2020 and entered guilty pleas in the U.S. District Court for the District of South Carolina and in South Carolina state court in February 2021. As a result of the pleas, Dominion Energy has terminated indemnity for these former executive officers related to these two cases.

Abandoned NND Project

DESC, for itself and as agent for Santee Cooper, entered into an engineering, construction and procurement contract with Westinghouse and WECTEC in 2008 for the design and construction of the NND Project, of which DESC’s ownership share is 55%. Various difficulties were encountered in connection with the project. The ability of Westinghouse and WECTEC to adhere to established budgets and construction schedules was affected by many variables, including unanticipated difficulties encountered in connection with project engineering and the construction of project components, constrained financial resources of the contractors, regulatory, legal, training and construction processes associated with securing approvals, permits and licenses and necessary amendments to them within projected time frames, the availability of labor and materials at estimated costs and the efficiency of project labor. There were also contractor and supplier performance issues, difficulties in timely meeting critical regulatory requirements, contract disputes, and changes in key contractors or subcontractors. These matters preceded the filing for bankruptcy protection by Westinghouse and WECTEC in March 2017, and were the subject of comprehensive analyses performed by SCANA and Santee Cooper.

Based on the results of SCANA’s analysis, and in light of Santee Cooper's decision to suspend construction on the NND Project, in July 2017, SCANA determined to stop the construction of the units and to pursue recovery of costs incurred in connection with the construction under the abandonment provisions of the Base Load Review Act or through other means. This decision by SCANA became the focus of numerous legislative, regulatory and legal proceedings. Some of these proceedings are described above.

In September 2017, DESC, for itself and as agent for Santee Cooper, filed with the U.S. Bankruptcy Court for the Southern District of New York Proofs of Claim for unliquidated damages against each of Westinghouse and WECTEC. These Proofs of Claim were based upon the anticipatory repudiation and material breach by Westinghouse and WECTEC of the contract, and assert against Westinghouse and WECTEC any and all claims that are based thereon or that may be related thereto.

Westinghouse’s reorganization plan was confirmed by the U.S. Bankruptcy Court for the Southern District of New York and became effective in August 2018. In connection with the effectiveness of the reorganization plan, the contract associated with the NND Project was deemed rejected. DESC contested approximately $285 million of filed liens in Fairfield County, South Carolina. Most of these asserted liens were claims that relate to work performed by Westinghouse subcontractors before the Westinghouse bankruptcy, although some of them were claims arising from work performed after the Westinghouse bankruptcy.

DESC and Santee Cooper were responsible for amounts owed to Westinghouse for valid work performed by Westinghouse subcontractors on the NND Project after the Westinghouse bankruptcy filing until termination of the interim assessment agreement. In December 2019, DESC and Santee Cooper entered into a confidential settlement agreement with W Wind Down Co LLC resolving claims relating to the interim assessment agreement.

Further, some Westinghouse subcontractors that made claims against Westinghouse in the bankruptcy proceeding also filed claims against DESC and Santee Cooper in South Carolina state court for damages. Many of these claimants asserted construction liens against the NND Project site. In December 2021, settlements were reached to resolve all remaining claims made by Westinghouse subcontractors. All amounts for which Dominion Energy was ultimately responsible were funded utilizing, and did not exceed, the portion of the Toshiba Settlement allocated for such balances within the SCANA Merger Approval Order recorded in regulatory liabilities on Dominion Energy’s Consolidated Balance Sheets.

Nuclear Operations

Nuclear Decommissioning – Minimum Financial Assurance

The NRC requires nuclear power plant owners to annually update minimum financial assurance amounts for the future decommissioning of their nuclear facilities. Decommissioning involves the decontamination and removal of radioactive contaminants from a nuclear power station once operations have ceased, in accordance with standards established by the NRC. The 2021 calculation for the NRC minimum financial assurance amount, aggregated for Dominion Energy and Virginia Power’s nuclear units, excluding joint owners’ assurance amounts and Millstone Unit 1 and Kewaunee, as those units are in a decommissioning state, was $3.2 billion and $1.9 billion, respectively, and has been satisfied by a combination of the funds being collected and deposited in the nuclear decommissioning trusts and the real annual rate of return growth of the funds allowed by the NRC. The 2021 NRC minimum financial assurance amounts above were calculated using preliminary December 31, 2021 U.S. Bureau of Labor Statistics indices. Dominion Energy believes that decommissioning funds and their expected earnings will be sufficient to cover expected decommissioning costs for the Millstone and Kewaunee units. In addition, Dominion Energy believes that the decommissioning funds and their expected earnings will be sufficient to cover expected decommissioning costs for the Summer unit, particularly when combined with future ratepayer collections and contributions. The Companies believe the decommissioning funds and their expected earnings for the Surry and North Anna units will be sufficient to cover decommissioning costs, particularly when combined with future ratepayer collections and contributions to these decommissioning trusts, if such future collections and contributions are required. This reflects a positive long-term outlook for trust fund investment returns as the decommissioning of the units will not be complete for decades. The Companies will continue to monitor these trusts to ensure they meet the NRC minimum financial assurance requirement, which may include, if needed, the use of parent company guarantees, surety bonding or other financial instruments recognized by the NRC. See Note 9 for additional information on nuclear decommissioning trust investments.

Nuclear Insurance

The Price-Anderson Amendments Act of 1988 provides the public up to $13.5 billion of liability protection on a per site, per nuclear incident basis, via obligations required of owners of nuclear power plants, and allows for an inflationary provision adjustment every five years. During the first quarter of 2021, the total liability protection per nuclear incident available to all participants in the Secondary Financial Protection Program decreased from $13.8 billion to $13.7 billion. During the second quarter of 2021, the total liability protection per nuclear incident available to all participants in the Secondary Financial Protection Program decreased from $13.7 billion to $13.5 billion. These decreases do not impact Dominion Energy’s responsibility per active unit under the Price-Anderson Amendments Act of 1988. The Companies have purchased $450 million of coverage from commercial insurance pools for Millstone, Summer, Surry and North Anna with the remainder provided through the mandatory industry retrospective rating plan. In the event of a nuclear incident at any licensed nuclear reactor in the U.S., the Companies could be assessed up to $138 million for each of their licensed reactors not to exceed $21 million per year per reactor. There is no limit to the number of incidents for which this retrospective premium can be assessed. The NRC granted an exemption in March 2015 to remove Kewaunee from the Secondary Financial Protection program. This same exemption permitted Dominion Energy to reduce Kewaunee’s required level of liability coverage to $100 million. This reduction was implemented in January 2018, following the removal and storage of the spent nuclear fuel from the spent fuel pool. The current levels of nuclear property insurance coverage for the Companies’ nuclear units are as follows:

		Coverage
(billions)
Dominion Energy
Millstone		$	1.06
Kewaunee			0.05
Summer			2.75
Virginia Power
Surry		$	1.06
North Anna			1.06

The Companies’ nuclear property insurance coverage for Millstone, Summer, Surry and North Anna meets or exceeds the NRC minimum requirement for nuclear power plant licensees of $1.06 billion per reactor site. In March 2015, the NRC granted an exemption which allowed Kewaunee to reduce its property insurance limit to $50 million. This reduction was implemented in January

2018, following the removal and storage of the spent nuclear fuel from the spent fuel pool. This includes coverage for premature decommissioning and functional total loss. The NRC requires that the proceeds from this insurance be used first, to return the reactor to and maintain it in a safe and stable condition and second, to decontaminate the reactor and station site in accordance with a plan approved by the NRC. Nuclear property insurance is provided by NEIL, a mutual insurance company, and is subject to retrospective premium assessments in any policy year in which losses exceed the funds available to the insurance company. Dominion Energy and Virginia Power's maximum retrospective premium assessment for the current policy period is $76 million and $35 million, respectively. Based on the severity of the incident, the Board of Directors of the nuclear insurer has the discretion to lower or eliminate the maximum retrospective premium assessment. The Companies have the financial responsibility for any losses that exceed the limits or for which insurance proceeds are not available because they must first be used for stabilization and decontamination. Additionally, DESC maintains an excess property insurance policy with the European Mutual Association for Nuclear Insurance. The policy provides coverage to Summer for property damage and outage costs up to $415 million resulting from an event of a non-nuclear origin. The European Mutual Association for Nuclear Insurance policy permits retrospective assessments under certain conditions to cover insurer's losses. Based on the current annual premium, DESC's share of the retrospective premium assessment would not exceed $2 million.

Millstone, Virginia Power and Summer also purchase accidental outage insurance from NEIL to mitigate certain expenses, including replacement power costs, associated with the prolonged outage of a nuclear unit due to direct physical damage. Under this program, the Companies are subject to a retrospective premium assessment for any policy year in which losses exceed funds available to NEIL. Dominion Energy and Virginia Power's maximum retrospective premium assessment for the current policy period is $33 million and $9 million, respectively.

ODEC, a part owner of North Anna, Santee Cooper, a part owner of Summer and Massachusetts Municipal and Green Mountain, part owners of Millstone’s Unit 3, are responsible to the Companies for their share of the nuclear decommissioning obligation and insurance premiums on applicable units, including any retrospective premium assessments and any losses not covered by insurance.

Spent Nuclear Fuel

The Companies entered into contracts with the DOE for the disposal of spent nuclear fuel under provisions of the Nuclear Waste Policy Act of 1982. The DOE failed to begin accepting the spent fuel on January 31, 1998, the date provided by the Nuclear Waste Policy Act and by the Companies’ contracts with the DOE. The Companies have previously received damages award payments and settlement payments related to these contracts.

By mutual agreement of the parties, the settlement agreements are extendable to provide for resolution of damages incurred after 2013. The settlement agreements for the Surry, North Anna and Millstone nuclear power stations have been extended to provide for periodic payments for damages incurred through December 31, 2022, and additional extensions are contemplated by the settlement agreements. A similar agreement for Summer extends until the DOE has accepted the same amount of spent fuel from the facility as if it has fully performed its contractual obligations.

In June 2018, a lawsuit for Kewaunee was filed in the U.S. Court of Federal Claims for recovery of spent nuclear fuel storage costs incurred after 2013. In March 2019, Dominion Energy amended its filing for recovery of spent nuclear fuel storage to include costs incurred for the year ended December 31, 2018. In January 2022, a settlement agreement was entered into for $48 million. Dominion Energy received the settlement funds in February 2022.

In 2021, Virginia Power received payments of $25 million for resolution of claims incurred at North Anna and Surry for the period of January 1, 2019 through December 31, 2019. In addition, Dominion Energy received payments of $9 million for resolution of claims incurred at Millstone for the period of July 1, 2019 through June 30, 2020 and $1 million for resolution of its share of claims incurred at Summer for the period of January 1, 2020 through December 31, 2020.

In 2020, Virginia Power received payments of $24 million for resolution of claims incurred at North Anna and Surry for the period of January 1, 2018 through December 31, 2018. In addition, Dominion Energy received payments of $11 million for resolution of claims incurred at Millstone for the period of July 1, 2018 through June 30, 2019 and $4 million for resolution of its share of claims incurred at Summer for the period of January 1, 2019 through December 31, 2019.

In 2019, Virginia Power received payments of $15 million for resolution of claims incurred at North Anna and Surry for the period of January 1, 2017 through December 31, 2017. In addition, Dominion Energy received $11 million for resolution of claims incurred at Millstone for the period of July 1, 2017 through June 30, 2018 and $3 million for resolution of its share of claims incurred at Summer for the period of January 1, 2018 through December 31, 2018.

The Companies continue to recognize receivables for certain spent nuclear fuel-related costs that they believe are probable of recovery from the DOE. Dominion Energy’s receivables for spent nuclear fuel-related costs totaled $52 million and $46 million at

December 31, 2021 and 2020, respectively. Virginia Power’s receivables for spent nuclear fuel-related costs totaled $39 million and $35 million at December 31, 2021 and 2020, respectively.

The Companies will continue to manage their spent fuel until it is accepted by the DOE.

Long-Term Purchase Agreements

At December 31, 2021, Dominion Energy had the following long-term commitments that are noncancelable or are cancelable only under certain conditions, and that a third party has used to secure financing for the facility that will provide the contracted goods or services:

		2022				2023				2024				2025				2026				Thereafter				Total
(millions)
Purchased electric capacity(1)		$	66			$	66			$	66			$	65			$	68			$	681			$	1,012

(1)	Commitments represent estimated amounts payable for energy under power purchase contracts with qualifying facilities which expire at various dates through 2046. Energy payments are generally based on fixed dollar amounts per month and totaled $59 million and $52 million for the years ended December 31, 2021 and 2020, respectively.

Guarantees, Surety Bonds and Letters of Credit

Upon the closing of the GT&S Transaction, Dominion Energy retained its four guarantees related to Cove Point, an equity method investment, in support of terminal services, transportation and construction. Two of the Cove Point guarantees have a cumulative maximum exposure of $1.9 billion while the other two guarantees have no maximum limit. No amounts related to these guarantees have been recorded. In addition, at December 31, 2021, Dominion Energy had issued an additional $20 million of guarantees, primarily to support third parties. No amounts related to these guarantees have been recorded.

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

At December 31, 2021, Dominion Energy had issued the following subsidiary guarantees:

		Maximum Exposure
(millions)
Commodity transactions(1)		$	2,077
Nuclear obligations(2)			243
Solar(3)			321
Other(4)			1,282
Total(5)		$	3,923

(1)	Guarantees related to commodity commitments of certain subsidiaries. These guarantees were provided to counterparties in order to facilitate physical and financial transaction related commodities and services.

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

(3)	Includes guarantees to facilitate the development of solar projects. Also includes guarantees entered into by DGI on behalf of certain subsidiaries to facilitate the acquisition and development of solar projects.

(4)

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

(5)	Excludes Dominion Energy’s guarantees for the new corporate office property and an offshore wind installation vessel discussed in Note 15.

Additionally, at December 31, 2021, Dominion Energy had purchased $217 million of surety bonds, including $154 million at Virginia Power, and authorized the issuance of letters of credit by financial institutions of $131 million to facilitate commercial transactions by its subsidiaries with third parties. Under the terms of surety bonds, the Companies are obligated to indemnify the respective surety bond company for any amounts paid.

Indemnifications

As part of commercial contract negotiations in the normal course of business, the Companies may sometimes agree to make payments to compensate or indemnify other parties for possible future unfavorable financial consequences resulting from specified events. The specified events may involve an adverse judgment in a lawsuit or the imposition of additional taxes due to a change in tax law or interpretation of the tax law. The Companies are unable to develop an estimate of the maximum potential amount of any other future payments under these contracts because events that would obligate them have not yet occurred or, if any such event has occurred, they have not been notified of its occurrence. However, at December 31, 2021, the Companies believe any other future payments, if any, that could ultimately become payable under these contract provisions, would not have a material impact on their results of operations, cash flows or financial position.

Charitable Commitments

In 2020, Dominion Energy made unconditional promises to several charitable organizations, including to support its commitment to diversity and social justice through scholarship programs and donations to historically black colleges and universities. As a result, Dominion Energy recorded charges totaling $80 million in other income in its Consolidated Statements of Income for the year ended December 31, 2020. These commitments are to be funded at various intervals through 2028. Dominion Energy’s Consolidated Balance Sheets include $43 million and $73 million in other deferred credits and other liabilities at December 31, 2021 and 2020, respectively and $26 million in other current liabilities at December 31, 2021.

NOTE 24. CREDIT RISK

Dominion Energy

As a diversified energy company, Dominion Energy transacts primarily with major companies in the energy industry and with commercial and residential energy consumers. These transactions principally occur in the Northeast, mid-Atlantic, Midwest and Rocky Mountain and Southeast regions of the U.S. Dominion Energy does not believe that this geographic concentration contributes significantly to its overall exposure to credit risk. In addition, as a result of its large and diverse customer base, Dominion Energy is not exposed to a significant concentration of credit risk for receivables arising from electric and gas utility operations.

Dominion Energy’s exposure to credit risk is concentrated primarily within its energy marketing and price risk management activities, as Dominion Energy transacts with a smaller, less diverse group of counterparties and transactions may involve large notional volumes and potentially volatile commodity prices. Energy marketing and price risk management activities include marketing of nonregulated generation output, structured transactions and the use of financial contracts for enterprise-wide hedging purposes. Gross credit exposure for each counterparty is calculated as outstanding receivables plus any unrealized on- or off-balance sheet exposure, taking into account contractual netting rights. Gross credit exposure is calculated prior to the application of any collateral. At December 31, 2021, Dominion Energy’s credit exposure totaled $152 million. Of this amount, investment grade counterparties, including those internally rated, represented 85%, and no single counterparty, whether investment grade or non-investment grade, exceeded $45 million of exposure.

Virginia Power

Virginia Power sells electricity and provides distribution and transmission services to customers in Virginia and northeastern North Carolina. Management believes that this geographic concentration risk is mitigated by the diversity of Virginia Power’s customer base, which includes residential, commercial and industrial customers, as well as rural electric cooperatives and municipalities. Credit risk associated with trade accounts receivable from energy consumers is limited due to the large number of customers. Virginia Power’s exposure to potential concentrations of credit risk results primarily from sales to wholesale customers. Virginia Power’s gross credit exposure for each counterparty is calculated as outstanding receivables plus any unrealized on- or off-balance sheet exposure, taking into account contractual netting rights. Gross credit exposure is calculated prior to the application of collateral. At December 31, 2021, Virginia Power’s credit exposure totaled $16 million. Of this amount, investment grade counterparties, including those internally rated, represented 47%, and no single counterparty exceeded $4 million of exposure.

Credit-Related Contingent Provisions

Certain of Dominion Energy’s derivative instruments contain credit-related contingent provisions. These provisions require Dominion Energy to provide collateral upon the occurrence of specific events, primarily a credit rating downgrade. If the credit-related contingent features underlying these instruments that are in a liability position and not fully collateralized with cash were fully triggered, as of December 31, 2021 and 2020 Dominion Energy would have been required to post $31 million and $14 million, respectively, of additional collateral to its counterparties. The collateral that would be required to be posted includes the impacts of any offsetting asset positions and any amounts already posted for derivatives, non-derivative contracts and derivatives elected under the normal purchases and normal sales exception, per contractual terms. Dominion Energy had posted $66 million and $1 million of collateral at December 31, 2021 and 2020, respectively, related to derivatives with credit-related contingent provisions that are in a liability position and not fully collateralized with cash. The aggregate fair value of all derivative instruments with credit-related contingent provisions that are in a liability position and not fully collateralized with cash as of December 31, 2021 and 2020 was $97 million and $15 million, respectively, which does not include the impact of any offsetting asset positions.

Certain of Virginia Power’s derivative instruments contain credit-related contingent provisions. These provisions require Virginia Power to provide collateral upon the occurrence of specific events, primarily a credit rating downgrade. If the credit-related contingent features underlying these instruments that are in a liability position and not fully collateralized with cash were fully triggered as of December 31, 2021 and 2020, Virginia Power would have been required to post an additional $22 million and $2 million, respectively, of additional collateral to its counterparties. The collateral that would be required to be posted includes the impacts of any offsetting asset position and any amounts already posted for derivatives and non-derivative contracts, per contractual terms. Virginia Power had posted $54 million of collateral at December 31, 2021 related to derivatives with credit-related contingent provisions that are in a liability position and not fully collateralized with cash. No such amounts were posted at December 31, 2020. The aggregate fair value of all derivative instruments with credit-related contingent provisions that are in a liability position and not fully collateralized with cash was $76 million and $2 million at December 31, 2021 and December 31, 2020, respectively, which does not include the impact of any offsetting asset positions.

See Note 7 for further information about derivative instruments.

NOTE 25. RELATED-PARTY TRANSACTIONS

Virginia Power engages in related party transactions primarily with other Dominion Energy subsidiaries (affiliates). Virginia Power’s receivable and payable balances with affiliates are settled based on contractual terms or on a monthly basis, depending on the nature of the underlying transactions. Virginia Power is included in Dominion Energy’s consolidated federal income tax return and, where applicable, combined income tax returns for Dominion Energy are filed in various states. See Note 2 for further information. Dominion Energy’s transactions with equity method investments are described in Note 9. A discussion of significant related party transactions follows.

Virginia Power

Transactions with Affiliates

Virginia Power transacts with affiliates for certain quantities of natural gas and other commodities in the ordinary course of business. Virginia Power also enters into certain commodity derivative contracts with affiliates. Virginia Power uses these contracts, which are principally comprised of forward commodity purchases, to manage commodity price risks associated with purchases of natural gas. See Notes 7 and 20 for more information. At December 31, 2021, Virginia Power’s derivative assets and liabilities with affiliates were $29 million and $6 million, respectively. At December 31, 2020, Virginia Power’s derivative assets and liabilities with affiliates were $3 million and $22 million, respectively.

Virginia Power participates in certain Dominion Energy benefit plans as described in Note 22. At December 31, 2021 and 2020, Virginia Power’s amounts due to Dominion Energy associated with the Dominion Energy Pension Plan and reflected in noncurrent pension and other postretirement benefit liabilities in the Consolidated Balance Sheets were $522 million and $436 million, respectively. At December 31, 2021 and 2020, Virginia Power’s amounts due from Dominion Energy associated with the Dominion Energy Retiree Health and Welfare Plan and reflected in noncurrent pension and other postretirement benefit assets in the Consolidated Balance Sheets were $431 million and $354 million, respectively.

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

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

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

Year Ended December 31,		2021				2020				2019
(millions)
Commodity purchases from affiliates		$	742			$	569			$	690
Services provided by affiliates(1)			494				455				503
Services provided to affiliates			18				18				24

(1)	Includes capitalized expenditures of $161 million, $141 million and $133 million for the year ended December 31, 2021, 2020 and 2019, respectively.

Virginia Power has borrowed funds from Dominion Energy under short-term borrowing arrangements. There were $699 million and $380 million in short-term demand note borrowings from Dominion Energy as of December 31, 2021 and 2020, respectively. The weighted-average interest rate of these borrowings was 0.26% and 0.30% at December 31, 2021 and 2020, respectively. Virginia Power had no outstanding borrowings, net of repayments under the Dominion Energy money pool for its nonregulated subsidiaries as of December 31, 2021 and 2020. Interest charges related to Virginia Power’s borrowings from Dominion Energy were immaterial for the years ended December 31, 2021, 2020 and 2019.

There were no issuances of Virginia Power’s common stock to Dominion Energy in 2021, 2020 or 2019.

NOTE 26. OPERATING SEGMENTS

The Companies are organized primarily on the basis of products and services sold in the U.S. A description of the operations included in the Companies’ primary operating segments is as follows:

Primary Operating Segment		Description of Operations		Dominion Energy		Virginia Power
Dominion Energy Virginia		Regulated electric distribution		X		X
		Regulated electric transmission		X		X
		Regulated electric generation fleet(1)		X		X
Gas Distribution		Regulated gas distribution and storage(2)		X
Dominion Energy South Carolina		Regulated electric distribution		X
		Regulated electric transmission		X
		Regulated electric generation fleet		X
		Regulated gas distribution and storage		X
Contracted Assets		Nonregulated electric generation fleet(3)		X
		Noncontrolling interest in Cove Point		X

(1) Includes Virginia Power’s non-jurisdictional generation operations.

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

(3) Includes solar generation facility development operations.

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

Dominion Energy

The Corporate and Other Segment of Dominion Energy includes its corporate, service companies and other functions (including unallocated debt) as well as nonregulated retail energy marketing operations (prior to December 1, 2021), including Dominion Energy’s noncontrolling interest in Wrangler. In addition, Corporate and Other includes specific items attributable to Dominion Energy’s operating segments that are not included in profit measures evaluated by executive management in assessing the segments’ performance or in allocating resources, as well as the net impact of the gas transmission and storage operations held in discontinued operations which are discussed in Note 3.

In 2021, Dominion Energy reported after-tax net expenses of $99 million in the Corporate and Other segment, including $97 million of after-tax net benefit for specific items with $493 million of after tax-net expenses attributable to its operating segments.

The net expenses for specific items attributable to Dominion Energy’s operating segments in 2021 primarily related to the impact of the following items:

•	A $347 million ($261 million after-tax) loss related to economic hedging activities, attributable to Contracted Assets;

•	$266 million ($199 million after-tax) of charges associated with the settlement of the South Carolina electric base rate case, attributable to Dominion Energy South Carolina;

•	A $211 million ($161 million after-tax) net loss on the sale of non-wholly-owned nonregulated solar facilities, attributable to Contracted Assets;

•	A $151 million ($112 million after-tax) loss from an unbilled revenue reduction at Virginia Power, attributable to Dominion Energy Virginia;

•	A $125 million ($93 million after-tax) net charge associated with the settlement of the 2021 Triennial Review, attributable to Dominion Energy Virginia;

•	A $77 million ($57 million after-tax) charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process, attributable to Dominion Energy Virginia;

•	A $70 million ($53 million after-tax) charge associated with litigation acquired in the SCANA Combination, attributable to Dominion Energy South Carolina;

•	A $68 million ($50 million after-tax) charge associated with storm damage and service restoration in Virginia Power’s service territory, attributable to Dominion Energy Virginia;

•	A $61 million ($45 million after-tax) charge for amortization of a regulatory asset established in connection with the settlement of the 2021 Triennial Review, attributable to Dominion Energy Virginia; and

•	A $44 million ($35 million after-tax) charge related to a revision in estimated recovery of spent nuclear fuel costs associated with the decommissioning of Kewaunee, attributable to Contracted Assets; partially offset by

•	A $568 million ($445 million after-tax) gain related to investments in nuclear decommissioning trust funds, attributable to:

	•	Contracted Assets ($390 million after-tax); and

	•	Dominion Energy Virginia ($55 million after-tax); and

•	A $130 million ($97 million after-tax) benefit for a change in the expected CCRO to be provided to Virginia retail electric customers under the GTSA, attributable to Dominion Energy Virginia.

In 2020, Dominion Energy reported after-tax net expenses of $3.7 billion in the Corporate and Other segment, including $3.4 billion of after-tax net expenses for specific items with $1.2 billion of after-tax net expenses attributable to its operating segments.

The net expenses for specific items attributable to Dominion Energy’s operating segments in 2020 primarily related to the impact of the following items:

•	A $751 million ($564 million after-tax) charge primarily related to the planned early retirement of certain Virginia Power electric generation facilities, attributable to Dominion Energy Virginia;

•	A $405 million ($325 million after-tax) charge associated with certain nonregulated solar generation facilities, attributable to Contracted Assets;

•	A $221 million ($171 million after-tax) charge associated with the sale of Fowler Ridge, attributable to Contracted Assets; and

•	A $130 million ($97 million after-tax) charge for the expected CCRO to be provided to Virginia retail electric customers under the GTSA, attributable to Dominion Energy Virginia;

•	A $127 million ($94 million after-tax) charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to legislation enacted in November 2020, attributable to Dominion Energy Virginia; and

•	A $117 million ($93 million after-tax) of charges associated with litigation acquired in the SCANA Combination, attributable to Dominion Energy South Carolina; partially offset by

•	A $335 million ($264 million after-tax) net gain related to investments in nuclear decommissioning trust funds attributable to:

	•	Dominion Energy Virginia ($27 million after-tax); and

	•	Contracted Assets ($237 million after-tax).

In 2019, Dominion Energy reported after-tax net expenses of $1.8 billion in the Corporate and Other segment, including $1.5 billion of after-tax net expenses for specific items with $1.9 billion of after-tax net expenses attributable to its operating segments.

The net expenses for specific items attributable to Dominion Energy’s operating segments in 2019 primarily related to the impact of the following items:

•	A $1.0 billion ($756 million after-tax) charge for refunds of amounts previously collected from retail electric customers of DESC for the NND Project, attributable to Dominion Energy South Carolina;

•	$641 million ($480 million after-tax) of charges associated with litigation acquired in the SCANA Combination, attributable to Dominion Energy South Carolina;

•	$427 million ($320 million after-tax) of charges for merger and integration-related costs associated with the SCANA Combination, including a $394 million ($295 million after-tax) charge related to a voluntary retirement program, attributable to:

	•	Dominion Energy Virginia ($151 million after-tax);

	•	Gas Distribution ($56 million after-tax);

	•	Dominion Energy South Carolina ($75 million after-tax); and

	•	Contracted Assets ($38 million after-tax).

•	A $346 million ($257 million after-tax) charge related to the early retirement of certain Virginia Power electric generation facilities, attributable to Dominion Energy Virginia;

•	A $194 million tax charge for $258 million of income tax-related regulatory assets acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery, attributable to Dominion Energy South Carolina;

•	A $160 million ($119 million after-tax) charge related to Virginia Power’s planned early retirement of certain automated meter reading infrastructure, attributable to Dominion Energy Virginia;

•	A $135 million ($100 million after-tax) charge related to Virginia Power’s contract termination with a non-utility generator, attributable to Dominion Energy Virginia;

•	A $114 million ($86 million after-tax) charge for property, plant and equipment acquired in the SCANA Combination primarily for which Dominion Energy committed to forgo recovery, attributable to Dominion Energy South Carolina; partially offset by

•	A $553 million ($411 million after-tax) net gain related to investments in nuclear decommissioning trust funds attributable to:

	•	Dominion Energy Virginia ($49 million after-tax); and

	•	Contracted Assets ($362 million after-tax); and

•	A $113 million ($84 million after-tax) benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019, attributable to Dominion Energy Virginia.

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

Year Ended December 31,		Dominion Energy Virginia				Gas Distribution				Dominion Energy South Carolina				Contracted Assets				Corporate and Other				Adjustments & Eliminations				Consolidated Total
(millions)
2021
Total revenue from external customers		$	8,012			$	2,660			$	2,968			$	1,018			$	(759	)		$	60			$	13,959
Intersegment revenue			(13	)			5				7				67				943				(1,004	)			5
Total operating revenue			7,999				2,665				2,975				1,085				184				(944	)			13,964
Depreciation, depletion and amortization			1,299				380				486				162				151				—				2,478
Equity in earnings of equity method investees			—				—				(3	)			259				20				—				276
Interest income			13				6				10				81				17				(26	)			101
Interest and related charges			537				86				206				52				499				(26	)			1,354
Income tax expense (benefit)			462				116				125				112				(390	)			—				425
Net income from discontinued operations			—				—				—				—				641				—				641
Net income (loss) attributable to Dominion Energy			1,919				600				437				431				(99	)			—				3,288
Investment in equity method investees(1)			—				106				—				2,738				88				—				2,932
Capital expenditures			3,762				1,252				694				277				76				—				6,061
Total assets (billions)			50.3				18.5				16.4				12.3				7.1				(5.0	)			99.6
2020
Total revenue from external customers		$	7,802			$	2,345			$	2,782			$	1,020			$	200			$	48			$	14,197
Intersegment revenue			(15	)			10				5				51				963				(1,039	)			(25	)
Total operating revenue			7,787				2,355				2,787				1,071				1,163				(991	)			14,172
Depreciation, depletion and amortization			1,247				344				474				182				85				—				2,332
Equity in earnings of equity method investees			—				—				(1	)			35				6				—				40
Interest income			13				6				12				91				73				(88	)			107
Interest and related charges			527				76				219				75				568				(88	)			1,377
Income tax expense (benefit)			496				121				107				(16	)			(625	)			—				83
Net income (loss) from discontinued operations			—				—				—				167				(2,045	)			—				(1,878	)
Net income (loss) attributable to Dominion Energy			1,891				560				419				402				(3,673	)			—				(401	)
Investment in equity method investees(1)			—				55				—				2,784				95				—				2,934
Capital expenditures			3,406				1,151				700				649				425				—				6,331
Total assets (billions)			46.0				17.1				16.0				13.1				8.6				(4.9	)			95.9
2019
Total revenue from external customers		$	8,170			$	2,367			$	2,948			$	1,083			$	(239	)		$	79			$	14,408
Intersegment revenue			(13	)			18				4				73				1,071				(1,160	)			(7	)
Total operating revenue			8,157				2,385				2,952				1,156				832				(1,081	)			14,401
Depreciation, depletion and amortization			1,216				335				452				180				100				—				2,283
Equity in earnings of equity method investees			—				2				(4	)			(1	)			11				—				8
Interest income			11				4				9				97				112				(136	)			97
Interest and related charges			530				116				242				98				636				(136	)			1,486
Income tax expense (benefit)			482				114				163				20				(570	)			—				209
Net income from discontinued operations			—				—				—				183				533				—				716
Net income (loss) attributable to Dominion Energy			1,786				487				430				460				(1,805	)			—				1,358
Capital expenditures			3,002				853				562				367				537				—				5,321

(1)	Excludes liability to Atlantic Coast Pipeline.

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

Virginia Power

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

In 2021, Virginia Power reported after-tax net expenses of $202 million in the Corporate and Other segment, including $202 million of after-tax net expenses for specific items all of which were attributable to its operating segment.

The net expenses for specific items attributable to its operating segment in 2021 primarily related to the impact of the following items:

•	A $151 million ($112 million after-tax) loss from an unbilled revenue reduction;

•	A $125 million ($93 million after-tax) net charge associated with the settlement of the 2021 Triennial Review;

•	A $77 million ($57 million after-tax) charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process;

•	A $68 million ($50 million after-tax) charge associated with storm damage and service restoration in its service territory; and

•	A $61 million ($45 million after-tax) charge for amortization of a regulatory asset established in connection with the settlement of the 2021 Triennial Review; partially offset by

•	A $130 million ($97 million after-tax) benefit for a change in the expected CCRO to be provided to Virginia retail electric customers under the GTSA.

In 2020, Virginia Power reported after-tax net expenses of $863 million in the Corporate and Other segment, including $915 million of after-tax net expenses for specific items all of which were attributable to its operating segment.

The net expenses for specific items attributable to its operating segment in 2020 primarily related to a $751 million ($559 million after-tax) charge related to the planned early retirement of certain electric generation facilities, a $130 million ($97 million after-tax) charge for the expected CCRO to be provided to Virginia retail electric customers under the GTSA and a $127 million ($94 million after-tax) charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to legislation enacted in November 2020.

In 2019, Virginia Power reported after-tax net expenses of $634 million in the Corporate and Other segment, including $627 million of after-tax net expenses for specific items all of which were attributable to its operating segment.

The net expenses for specific items attributable to its operating segment in 2019 primarily related to the impact of the following items:

•	A $346 million ($257 million after-tax) charge related to the early retirement of certain electric generation facilities;

•	A $198 million ($146 million after-tax) charge related to a voluntary retirement program;

•	A $160 million ($119 million after-tax) charge related to the planned early retirement of certain automated meter reading infrastructure;

•	A $135 million ($100 million after-tax) charge related to a contract termination with a non-utility generator; and

•	A $62 million ($46 million after-tax) charge related to the abandonment of a project at an electric generating facility; partially offset by

•	A $113 million ($84 million after-tax) benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019.

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

Year Ended December 31,		Dominion Energy Virginia				Corporate and Other				Consolidated Total
(millions)
2021
Operating revenue		$	7,976			$	(506	)		$	7,470
Depreciation and amortization			1,296				68				1,364
Interest income			11				—				11
Interest expense (benefit) and related charges			535				(1	)			534
Income tax expense (benefit)			467				(70	)			397
Net income (loss)			1,914				(202	)			1,712
Capital expenditures			3,756				—				3,756
Total assets (billions)			47.9				—				47.9
2020
Operating revenue		$	7,763			$	—			$	7,763
Depreciation and amortization			1,245				7				1,252
Interest income			11				—				11
Interest expense (benefit) and related charges			524				(8	)			516
Income tax expense (benefit)			500				(271	)			229
Net income (loss)			1,884				(863	)			1,021
Capital expenditures			3,372				—				3,372
Total assets (billions)			43.7				—				43.7
2019
Operating revenue		$	8,137			$	(29	)		$	8,108
Depreciation and amortization			1,215				8				1,223
Interest income			11				—				11
Interest expense (benefit) and related charges			529				(5	)			524
Income tax expense (benefit)			481				(217	)			264
Net income (loss)			1,783				(634	)			1,149
Capital expenditures			2,981				—				2,981