Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

Contents of MD&A

MD&A consists of the following information:

•	Forward-Looking Statements

•	Accounting Matters – Dominion Energy

•	Dominion Energy

	•	Results of Operations

	•	Outlook

	•	Segment Results of Operations

•	Virginia Power

	•	Results of Operations

•	Liquidity and Capital Resources – Dominion Energy

•	Future Issues and Other Matters – Dominion Energy

Forward-Looking Statements

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

•	Changes in operating, maintenance and construction costs;

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

•

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

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

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

•

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

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

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

•	The expected timing and likelihood of the completion of the proposed sale of Hope, including the ability to obtain the requisite regulatory approval and the terms and conditions of such regulatory approval;

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

•	Counterparty credit and performance risk;

•	Fluctuations in the value of investments held in nuclear decommissioning trusts by the Companies and in benefit plan trusts by Dominion Energy;

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

•	Fluctuations in interest rates;

•	Fluctuations in currency exchange rates of the Euro or Danish Krone associated with the CVOW Commercial Project;

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

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

•	Political and economic conditions, including inflation and deflation;

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

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

Additionally, other risks that could cause actual results to differ from predicted results are set forth in Part I. Item 1A. Risk Factors in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.

The Companies’ forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. The Companies caution the reader not to place undue reliance on their forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. The Companies undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

Accounting Matters

Critical Accounting Policies and Estimates

As of June 30, 2022, there have been no significant changes with regard to the critical accounting policies and estimates disclosed in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. The policies disclosed included the accounting for regulated operations, AROs, income taxes, accounting for derivative contracts and financial instruments at fair value, use of estimates in goodwill impairment testing, use of estimates in long-lived asset and equity method investment impairment testing, employee benefit plans and held for sale classification.

Dominion Energy

Results of Operations

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

		2022				2021				$ Change
(millions, except EPS)
Second Quarter
Net income (loss) attributable to Dominion Energy		$	(453	)		$	285			$	(738	)
Diluted EPS			(0.58	)			0.33				(0.91	)
Year-To-Date
Net income attributable to Dominion Energy		$	258			$	1,293			$	(1,035	)
Diluted EPS			0.25				1.56				(1.31	)

Overview

Second Quarter 2022 vs. 2021

Net income attributable to Dominion Energy decreased $738 million, primarily due to a loss associated with the sale of Kewaunee, a decrease in net investment earnings on nuclear decommissioning trust funds, a charge for RGGI compliance costs deemed recovered through base rates and a charge in connection with a proposed comprehensive settlement agreement for Virginia fuel expenses, partially offset by the absence of charges associated with the settlement of the South Carolina electric base rate case and increased unrealized gains on economic hedging activities.

Year-To-Date 2022 vs. 2021

Net income attributable to Dominion Energy decreased 80%, primarily due to a loss associated with the sale of Kewaunee, a decrease in net investment earnings on nuclear decommissioning trust funds, a charge for RGGI compliance costs deemed recovered through

base rates, a charge in connection with a proposed comprehensive settlement agreement for Virginia fuel expenses and a charge to reflect the recognition of deferred taxes on the outside basis of Hope’s stock upon meeting the classification as held for sale. These decreases were partially offset by the absence of charges associated with the settlement of the South Carolina electric base rate case and increased unrealized gains on economic hedging activities.

Analysis of Consolidated Operations

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

		Second Quarter												Year-To-Date
		2022				2021				$ Change				2022				2021				$ Change
(millions)
Operating revenue		$	3,596			$	3,038			$	558			$	7,875			$	6,908			$	967
Electric fuel and other energy-related purchases			730				487				243				1,408				1,037				371
Purchased electric capacity			16				25				(9	)			29				36				(7	)
Purchased gas			202				121				81				847				605				242
Other operations and maintenance			985				895				90				2,039				1,881				158
Depreciation, depletion and amortization			695				604				91				1,393				1,212				181
Other taxes			235				222				13				488				479				9
Impairment of assets and other charges			415				321				94				405				416				(11	)
Losses (gains) on sales of assets			636				—				636				608				1				607
Earnings from equity method investees			83				65				18				163				145				18
Other income (expense)			(287	)			312				(599	)			(241	)			599				(840	)
Interest and related charges			47				518				(471	)			221				571				(350	)
Income tax expense (benefit)			(117	)			(47	)			(70	)			119				165				(46	)
Net income (loss) from discontinued operations including noncontrolling interests			(1	)			26				(27	)			18				54				(36	)
Noncontrolling interests			—				10				(10	)			—				10				(10	)

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

Second Quarter 2022 vs. 2021

Operating revenue increased 18%, primarily reflecting:

•	A $308 million increase in the fuel cost component included in utility rates as a result of an increase in commodity costs associated with sales to electric utility retail customers ($213 million) and gas utility customers ($95 million);

•	A $145 million increase from Virginia Power riders;

•	A $67 million increase in sales to electric utility retail customers associated with economic and other usage factors;

•	A $60 million net increase from customers who elect to pay market-based rates, including settlements of economic hedges, at Virginia Power;

•	A $21 million increase in sales to customers from non-jurisdictional solar generation facilities at Virginia Power;

•	A $16 million increase from gas utility capital cost riders; and

•	A $5 million increase associated with market prices affecting Millstone, including economic hedging impacts of net realized and unrealized losses on freestanding derivatives ($42 million).

These increases were partially offset by:

•	A $56 million decrease from a planned outage at Millstone;

•	A $53 million decrease from the sale of non-wholly-owned nonregulated solar facilities; and

•	A $15 million decrease as a result of the contribution of certain nonregulated gas retail energy contracts to Wrangler.

Electric fuel and other energy-related purchases increased 50%, primarily due to higher commodity costs for electric utilities, which are offset in operating revenue and do not impact net income.

Purchased gas increased 67%, primarily due to an increase in commodity costs for gas utilities ($95 million), which are offset in operating revenue and do not impact net income, partially offset by a decrease as a result of the contribution of certain nonregulated natural gas retail energy contracts to Wrangler ($14 million).

Other operations and maintenance increased 10%, primarily due to an increase in outage costs at Millstone ($61 million) and Virginia Power ($3 million) and an increase in certain Virginia Power expenditures which are primarily recovered through state- and FERC-regulated rates and do not impact net income ($52 million), partially offset by the absence of a charge related to a revision in estimated recovery of spent nuclear fuel costs associated with the decommissioning of Kewaunee ($44 million).

Depreciation, depletion and amortization increased 15%, primarily due to an increase for amortization of a regulatory asset established in the settlement of the 2021 Triennial Review ($61 million), an increase in RGGI related amortization ($42 million), which prior to the suspension of Rider RGGI is offset in operating revenue and does not impact net income, and an increase due to various projects being placed into service ($31 million), partially offset by depreciation rates revised in the first quarter of 2022 at Virginia Power ($20 million) and a decrease from the sale of non-wholly-owned nonregulated solar facilities ($14 million).

Impairment of assets and other charges increased 29%, primarily due to a charge in connection with a proposed comprehensive settlement agreement for Virginia fuel expenses ($191 million), a charge for RGGI compliance costs deemed recovered through base rates ($180 million) and dismantling costs associated with certain retired electric generation facilities at Virginia Power ($37 million), partially offset by the absence of charges associated with the settlement of the South Carolina electric base rate case ($249 million), the absence of charges associated with litigation acquired in the SCANA Combination ($40 million) and the absence of the write-off of nonregulated retail software development assets ($20 million).

Losses (gains) on sales of assets increased $636 million, primarily due to a loss associated with the sale of Kewaunee ($649 million), partially offset by a gain on the sale of certain utility property in South Carolina ($16 million).

Other income decreased $599 million, primarily due to net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust funds ($642 million), partially offset by an increase in non-service components of pension and other postretirement employee benefit plan credits ($31 million) and the absence of charges associated with the settlement of the South Carolina electric base rate case ($18 million).

Interest and related charges decreased 91%, primarily due to unrealized gains in 2022 compared to unrealized losses in 2021 associated with freestanding derivatives ($483 million), a decrease due to junior subordinated note repayments in 2021 ($17 million) and higher premiums received on interest rate derivatives ($16 million), partially offset by an increase from net debt issuances ($35 million).

Income tax benefit increased $70 million, primarily due to lower pre-tax income including lower state income tax benefits on pre-tax losses from nuclear decommissioning trusts and economic hedges ($128 million), partially offset by lower interim period allocation of investment tax credits ($31 million) and the absence of the benefit from a state legislative change ($21 million).

Net income from discontinued operations including noncontrolling interests decreased $27 million, primarily due to the absence of operations in connection with the sale of the Q-Pipe Group.

Year-To-Date 2022 vs. 2021

Operating revenue increased 14%, primarily reflecting:

•	A $620 million increase in the fuel cost component included in utility rates as a result of an increase in commodity costs associated with sales to electric utility retail customers ($332 million) and gas utility customers ($288 million);

•	A $214 million increase from Virginia Power riders;

•	The absence of a $151 million decrease from an unbilled revenue reduction at Virginia Power;

•	A $76 million net increase from customers who elect to pay market-based rates, including settlements of economic hedges, at Virginia Power;

•	A $54 million increase in sales to electric utility retail customers associated with economic and other usage factors;

•	A $41 million increase following the approved base rate case for PSNC;

•	A $30 million increase in sales to customers from non-jurisdictional solar generation facilities at Virginia Power;

•	A $26 million increase from gas utility capital cost riders;

•	A $26 million increase in sales to electric utility retail customers from an increase in heating degree days during the heating season ($20 million) and a net increase in cooling degree days during the cooling season ($6 million); and

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

These increases were partially offset by:

•	A $136 million decrease associated with market prices affecting Millstone, including economic hedging impacts of net realized and unrealized losses on freestanding derivatives ($291 million);

•	A $82 million decrease from the sale of non-wholly-owned nonregulated solar facilities;

•	A $66 million decrease as a result of the contribution of certain nonregulated gas retail energy contracts to Wrangler;

•	A $56 million decrease from a planned outage at Millstone; and

•	A $25 million decrease reflecting a reduction in base rates associated with the settlement of the 2021 Triennial Review.

Electric fuel and other energy-related purchases increased 36%, primarily due to higher commodity costs for electric utilities, which are offset in operating revenue and do not impact net income.

Purchased gas increased 40%, primarily due to an increase in commodity costs for gas utilities ($288 million), which are offset in operating revenue and do not impact net income, partially offset by a decrease as a result of the contribution of certain nonregulated natural gas retail energy contracts to Wrangler ($54 million).

Other operations and maintenance increased 8%, primarily reflecting:

•	A $72 million increase in outage costs at Millstone ($67 million) and Virginia Power ($5 million);

•	A $38 million increase in certain Virginia Power expenditures which are primarily recovered through state- and FERC-regulated rates and do not impact net income;

•	A $36 million increase in storm damage and restoration costs in Virginia Power’s service territory; and

•	A $20 million increase in bad debt expense; partially offset by

•	The absence of a $44 million charge related to a revision in estimated recovery of spent nuclear fuel costs associated with the decommissioning of Kewaunee; and

•	A $20 million decrease in merger and integration-related costs associated with the SCANA Combination.

Depreciation, depletion and amortization increased 15%, primarily due to an increase for amortization of a regulatory asset established in the settlement of the 2021 Triennial Review ($122 million), an increase in RGGI related amortization ($87 million), which prior to the suspension of Rider RGGI is offset in operating revenue and does not impact net income, and an increase due to various projects being placed into service ($63 million), partially offset by depreciation rates revised in the first quarter of 2022 at Virginia Power ($41 million) and a decrease from the sale of non-wholly-owned nonregulated solar facilities ($28 million).

Impairment of assets and other charges decreased 3%, primarily reflecting:

•	The absence of charges associated with the settlement of the South Carolina electric base rate case ($249 million);

•	The absence of charges associated with litigation acquired in the SCANA Combination ($100 million);

•	The absence of a charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process ($77 million);

•	The absence of a charge for corporate office lease termination ($71 million); and

•	The absence of a write-off of nonregulated retail software development assets ($20 million); partially offset by

•	A charge in connection with a proposed comprehensive settlement agreement for Virginia fuel expenses ($191 million);

•	A charge for RGGI compliance costs deemed recovered through base rates ($180 million);

•	The absence of a benefit for a change in the CCRO reserve associated with the 2021 Triennial Review ($130 million); and

•	Dismantling costs associated with certain retired electric generation facilities at Virginia Power ($42 million).

Losses (gains) on sales of assets increased $607 million, primarily due to a loss associated with the sale of Kewaunee ($649 million), partially offset by a gain on the contribution of certain privatization operations to Dominion Privatization ($23 million) and a gain on the sale of certain utility property in South Carolina ($16 million).

Other income decreased $840 million, primarily due to net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust funds ($900 million), partially offset by an increase in non-service components of pension and other postretirement employee benefit plan credits ($54 million) and the absence of charges associated with the settlement of the South Carolina electric base rate case ($18 million).

Interest and related charges decreased 61%, primarily due to higher unrealized gains associated with freestanding derivatives ($345 million), a decrease due to junior subordinated note repayments in 2021 ($42 million) and higher premiums received on interest rate derivatives ($30 million), partially offset by an increase from net debt issuances ($67 million).

Income tax expense decreased 28%, primarily due to lower pre-tax income including lower state income tax benefits on pre-tax losses from nuclear decommissioning trusts and economic hedges ($209 million), partially offset by charges reflecting the recognition of deferred taxes on the outside basis of Hope’s stock upon meeting the classification as held for sale that will reverse when the sale is completed ($90 million), lower interim period allocation of investment tax credits ($40 million) and the absence of the benefit from a state legislative change ($21 million).

Net income from discontinued operations including noncontrolling interests decreased 67%, primarily due to the absence of operations in connection with the sale of the Q-Pipe Group.

Outlook

Dominion Energy’s 2022 net income is expected to decrease on a per share basis as compared to 2021 primarily due to losses associated with the sale of Kewaunee, charges for certain Virginia Power RGGI compliance costs deemed recovered through base rates and a charge associated with a proposed comprehensive settlement agreement associated with Virginia fuel expenses in addition to the items discussed in Dominion Energy’s 2022 outlook as described in Item 7. MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.

Segment Results of Operations

Segment results include the impact of intersegment revenues and expenses, which may result in intersegment profit and loss. Presented below is a summary of contributions by Dominion Energy’s operating segments to net income (loss) attributable to Dominion Energy:

		Net Income (Loss) Attributable to Dominion Energy												EPS(1)
		2022				2021				$ Change				2022				2021				$ Change
(millions, except EPS)
Second Quarter
Dominion Energy Virginia		$	440			$	431			$	9			$	0.54			$	0.53			$	0.01
Gas Distribution			125				95				30				0.15				0.12				0.03
Dominion Energy South Carolina			124				84				40				0.15				0.10				0.05
Contracted Assets			20				104				(84	)			0.02				0.13				(0.11	)
Corporate and Other			(1,162	)			(429	)			(733	)			(1.44	)			(0.55	)			(0.89	)
Consolidated		$	(453	)		$	285			$	(738	)		$	(0.58	)		$	0.33			$	(0.91	)
Year-To-Date
Dominion Energy Virginia		$	958			$	865			$	93			$	1.18			$	1.07			$	0.11
Gas Distribution			419				346				73				0.51				0.43				0.08
Dominion Energy South Carolina			233				186				47				0.29				0.23				0.06
Contracted Assets			121				254				(133	)			0.15				0.31				(0.16	)
Corporate and Other			(1,473	)			(358	)			(1,115	)			(1.88	)			(0.48	)			(1.40	)
Consolidated		$	258			$	1,293			$	(1,035	)		$	0.25			$	1.56			$	(1.31	)

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

Dominion Energy Virginia

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

		Second Quarter												Year-To-Date
		2022				2021				% Change				2022				2021				% Change
Electricity delivered (million MWh)			20.7				19.3				7	%			43.0				41.0				5	%
Electricity supplied (million MWh):
Utility			20.8				19.5				7				43.1				41.4				4
Non-Jurisdictional			0.5				0.3				67				0.8				0.5				60
Degree days (electric distribution and utility service area):
Cooling			502				509				(1	)			513				520				(1	)
Heating			297				285				4				2,192				2,174				1
Average electric distribution customer accounts (thousands)			2,720				2,693				1				2,718				2,688				1

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

		Second Quarter 2022 vs. 2021 Increase (Decrease)								Year-To-Date 2022 vs. 2021 Increase (Decrease)
		Amount				EPS				Amount				EPS
(millions, except EPS)
Regulated electric sales:
Weather		$	(7	)		$	(0.01	)		$	7			$	0.01
Other			77				0.10				68				0.08
Rider equity return			12				0.01				28				0.03
Electric capacity			(4	)			—				(12	)			(0.01	)
Storm damage and restoration costs			(8	)			(0.01	)			(8	)			(0.01	)
Depreciation and amortization			9				0.01				16				0.02
Renewable energy investment tax credits			(38	)			(0.05	)			23				0.03
Interest expense, net			(8	)			(0.01	)			(11	)			(0.01	)
Other			(24	)			(0.02	)			(18	)			(0.02	)
Share dilution			—				(0.01	)			—				(0.01	)
Change in net income contribution		$	9			$	0.01			$	93			$	0.11

Gas Distribution

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

		Second Quarter												Year-To-Date
		2022				2021				% Change				2022				2021				% Change
Gas distribution throughput (bcf):
Sales			26				24				8	%			115				110				5	%
Transportation			217				216				—				518				489				6
Heating degree days (gas distribution service area):
North Carolina			189				281				(33	)			1,772				1,973				(10	)
Ohio and West Virginia			622				691				(10	)			3,534				3,449				2
Utah, Wyoming and Idaho			662				535				24				3,140				2,933				7
Average gas distribution customer accounts (thousands):
Sales			1,971				1,926				2				1,967				1,925				2
Transportation			1,136				1,137				—				1,137				1,135				—

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

		Second Quarter 2022 vs. 2021 Increase (Decrease)								Year-To-Date 2022 vs. 2021 Increase (Decrease)
		Amount				EPS				Amount				EPS
(millions, except EPS)
Regulated gas sales:
Weather		$	—			$	—			$	2			$	—
Other			20				0.02				54				0.07
Rider equity return			5				0.01				13				0.02
Interest expense, net			(3	)			—				(2	)			—
Other			8				—				6				—
Share dilution			—				—				—				(0.01	)
Change in net income contribution		$	30			$	0.03			$	73			$	0.08

Dominion Energy South Carolina

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

		Second Quarter												Year-To-Date
		2022				2021				% Change				2022				2021				% Change
Electricity delivered (million MWh)			5.9				5.4				9	%			11.1				10.7				4	%
Electricity supplied (million MWh)			6.2				5.7				9				11.7				11.3				4
Degree days (electric distribution service areas):
Cooling			253				171				48				253				172				47
Heating			33				53				(38	)			783				839				(7	)
Average electric distribution customer accounts (thousands)			776				764				2				774				762				2
Gas distribution throughput (bcf):
Sales			15				15				—				35				35				—
Average gas distribution customer accounts (thousands)			425				411				3				424				409				4

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

		Second Quarter 2022 vs. 2021 Increase (Decrease)								Year-To-Date 2022 vs. 2021 Increase (Decrease)
		Amount				EPS				Amount				EPS
(millions, except EPS)
Regulated electric sales:
Weather		$	12			$	0.01			$	13			$	0.02
Other			23				0.03				38				0.05
Capital cost rider			(2	)			—				(4	)			—
Regulated gas sales			1				—				4				—
Depreciation and amortization			(5	)			(0.01	)			(8	)			(0.01	)
Interest expense, net			(3	)			—				(3	)			—
Other			14				0.02				7				—
Share dilution			—				—				—				—
Change in net income contribution		$	40			$	0.05			$	47			$	0.06

Contracted Assets

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

		Second Quarter												Year-To-Date
		2022				2021				% Change				2022				2021				% Change
Electricity supplied (million MWh)			3.4				5.6				(39	%)			8.0				10.7				(25	%)

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

		Second Quarter 2022 vs. 2021 Increase (Decrease)								Year-To-Date 2022 vs. 2021 Increase (Decrease)
		Amount				EPS				Amount				EPS
(millions, except EPS)
Margin(1)		$	(24	)		$	(0.03	)		$	(27	)		$	(0.03	)
Sale of non-wholly-owned nonregulated solar facilities			(10	)			(0.01	)			(9	)			(0.01	)
Planned outage costs			(45	)			(0.06	)			(49	)			(0.06	)
Renewable energy investment tax credits			—				—				(29	)			(0.04	)
Interest expense, net			(13	)			(0.02	)			(25	)			(0.03	)
Other			8				0.01				6				0.01
Share dilution			—				—				—				—
Change in net income contribution		$	(84	)		$	(0.11	)		$	(133	)		$	(0.16	)

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

Corporate and Other

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

		Second Quarter												Year-To-Date
		2022				2021				$ Change				2022				2021				$ Change
(millions, except EPS)
Specific items attributable to operating segments		$	(1,254	)		$	(227	)		$	(1,027	)		$	(1,523	)		$	(314	)		$	(1,209	)
Specific items attributable to Corporate and Other segment			143				(116	)			259				123				86				37
Total specific items			(1,111	)			(343	)			(768	)			(1,400	)			(228	)			(1,172	)
Other corporate operations:
Interest expense, net			(82	)			(106	)			24				(161	)			(217	)			56
Other			31				20				11				88				87				1
Total other corporate operations			(51	)			(86	)			35				(73	)			(130	)			57
Total net expense		$	(1,162	)		$	(429	)		$	(733	)		$	(1,473	)		$	(358	)		$	(1,115	)
EPS impact		$	(1.44	)		$	(0.55	)		$	(0.89	)		$	(1.88	)		$	(0.48	)		$	(1.40	)

Total Specific Items

Corporate and Other includes specific items attributable to Dominion Energy’s primary operating segments that are not included in profit measures evaluated by executive management in assessing the segments' performance or in allocating resources. See Note 21 to the Consolidated Financial Statements in this report for discussion of these items in more detail. Corporate and Other also includes items attributable to the Corporate and Other segment. For the three months ended June 30, 2022, other than the effects of required interim period provision for income taxes, this primarily included a $188 million after-tax benefit for derivative mark-to-market changes. For the six months ended June 30, 2022, other than the effects of required interim period provision for income taxes, this primarily included a $240 million after-tax benefit for derivative mark-to-market changes, a $90 million charge to reflect the recognition of deferred taxes on the outside basis of Hope’s stock upon meeting the classification as held for sale that will reverse when the sale is completed and $18 million net income from discontinued operations, primarily associated with the Q-Pipe Group.

For the three months ended June 30, 2021, this primarily included a $118 million after-tax loss for derivative mark-to-market changes, $23 million of after-tax charges for merger and integration-related costs associated with the SCANA Combination and $26 million net income from discontinued operations, primarily associated with the Q-Pipe Group. For the six months ended June 30, 2021, this primarily included a $116 million after-tax benefit for derivative mark-to-market changes, $54 million net income from discontinued operations, primarily associated with the Q-Pipe Group, a $53 million after-tax charge for corporate office lease termination associated with workplace realignment and $30 million of after-tax charges for merger and integration-related costs associated with the SCANA Combination.

Virginia Power

Results of Operations

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

		Second Quarter												Year-To-Date
		2022				2021				$ Change				2022				2021				$ Change
(millions)
Net income		$	47			$	414			$	(367	)		$	404			$	788			$	(384	)

Overview

Second Quarter 2022 vs. 2021

Net income decreased 89%, primarily due to a decrease in net investment earnings on nuclear decommissioning trust funds, a charge for RGGI compliance costs deemed recovered through base rates and a charge in connection with a proposed comprehensive settlement agreement for Virginia fuel expenses.

Year-To-Date 2022 vs. 2021

Net income decreased 49%, primarily due to a decrease in net investment earnings on nuclear decommissioning trust funds, a charge for RGGI compliance costs deemed recovered through base rates and a charge in connection with a proposed comprehensive settlement agreement for Virginia fuel expenses.

Analysis of Consolidated Operations

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

		Second Quarter												Year-To-Date
		2022				2021				$ Change				2022				2021				$ Change
(millions)
Operating revenue		$	2,175			$	1,741			$	434			$	4,342			$	3,571			$	771
Electric fuel and other energy-related purchases			533				349				184				1,049				755				294
Purchased electric capacity			11				4				7				22				1				21
Other operations and maintenance			478				399				79				1,048				912				136
Depreciation and amortization			425				323				102				854				647				207
Other taxes			83				83				—				158				176				(18	)
Impairment of assets and other charges (benefit)			409				12				397				413				(39	)			452
Other income (expense)			(44	)			40				(84	)			(40	)			72				(112	)
Interest and related charges			145				128				17				293				264				29
Income tax expense			—				69				(69	)			61				139				(78	)

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

Second Quarter 2022 vs. 2021

Operating revenue increased 25%, primarily reflecting:

•	A $164 million increase in the fuel cost component included in utility rates as a result of a net increase in commodity costs associated with sales to electric utility retail customers;

•	A $145 million increase from riders;

•	A $60 million net increase from customers who elect to pay market-based rates, including settlements of economic hedges;

•	A $50 million increase in sales to electric utility retail customers associated with economic and other usage factors; and

•	A $21 million increase in sales to customers from non-jurisdictional solar generation facilities.

Electric fuel and other energy-related purchases increased 53%, primarily due to higher commodity costs for electric utilities, which are offset in operating revenue and do not impact net income.

Other operations and maintenance increased 20%, primarily due to an increase in certain expenses which are primarily recovered through state- and FERC-regulated rates and do not impact net income.

Depreciation and amortization increased 32%, primarily due to an increase for amortization of a regulatory asset established in the settlement of the 2021 Triennial Review ($61 million), an increase in RGGI related amortization ($42 million), which prior to the suspension of Rider RGGI is offset in operating revenue and does not impact net income, and an increase due to various projects being placed into service ($17 million), partially offset by depreciation rates revised in the first quarter of 2022 ($20 million).

Impairment of assets and other charges increased $397 million, primarily due to a charge in connection with a proposed comprehensive settlement agreement for Virginia fuel expenses ($191 million), a charge for RGGI compliance costs deemed recovered through base rates ($180 million) and dismantling costs associated with certain retired electric generation facilities ($37 million).

Other income decreased $84 million, primarily due to net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust funds.

Interest and related charges increased 13%, primarily due to an increase from net debt issuances in 2022 and 2021.

Income tax expense decreased $69 million, primarily due to lower pre-tax income ($84 million), partially offset by the absence of the benefit from a state legislative change ($16 million).

Year-To-Date 2022 vs. 2021

Operating revenue increased 22%, primarily reflecting:

•	A $272 million increase in the fuel cost component included in utility rates as a result of a net increase in commodity costs associated with sales to electric utility retail customers;

•	A $214 million increase from riders;

•	The absence of a $151 million decrease from an unbilled revenue reduction;

•	A $76 million net increase from customers who elect to pay market-based rates, including settlements of economic hedges;

•	A $30 million increase in sales to customers from non-jurisdictional solar generation facilities;

•	A $29 million increase in sales to electric utility retail customers associated with economic and other usage factors;

•	A $13 million increase in sales to electric utility retail customers associated with growth; and

•	A $9 million net increase in sales to retail customers from an increase in heating degree days during the heating season ($19 million), partially offset by a decrease in cooling degree days during the cooling season ($10 million).

These increases were partially offset by:

•	A $25 million decrease reflecting a reduction in base rates associated with the settlement of the 2021 Triennial Review.

Electric fuel and other energy-related purchases increased 39%, primarily due to higher commodity costs for electric utilities, which are offset in operating revenue and do not impact net income.

Purchased electric capacity increased $21 million, primarily due to an increase in expense related to the annual PJM capacity performance market effective June 2021.

Other operations and maintenance increased 15%, primarily reflecting:

•	A $38 million increase in certain expenses which are primarily recovered through state- and FERC-regulated rates and do not impact net income;

•	A $36 million increase in storm damage and service restoration costs;

•	A $21 million increase in outside services;

•	A $19 million increase in bad debt expense; and

•	A $11 million increase in materials and supplies; partially offset by

•	A $16 million decrease in salaries, wages and benefits and administrative costs.

Depreciation and amortization increased 32%, primarily due to an increase for amortization of a regulatory asset established in the settlement of the 2021 Triennial Review ($122 million), an increase in RGGI related amortization ($87 million), which prior to the suspension of Rider RGGI is offset in operating revenue and does not impact net income, and an increase due to various projects being placed into service ($39 million), partially offset by depreciation rates revised in the first quarter of 2022 ($41 million).

Other taxes decreased 10%, primarily due to lower business and occupational taxes as a result of a West Virginia legislative change.

Impairment of assets and other charges increased $452 million, primarily due to a charge in connection with a proposed comprehensive settlement agreement for Virginia fuel expenses ($191 million), a charge for RGGI compliance costs deemed recovered through base rates ($180 million), the absence of a benefit for a change in the CCRO reserve associated with the 2021 Triennial Review ($130 million) and dismantling costs associated with certain retired electric generation facilities ($42 million), partially offset by the absence of a charge for the forgiveness of Virginia retail electric customer accounts in arrears pursuant to Virginia’s 2021 budget process ($77 million).

Other income decreased $112 million, primarily due to net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust funds.

Interest and related charges increased 11%, primarily due to an increase from net debt issuances in 2022 and 2021.

Income tax expense decreased 56%, primarily due to lower pre-tax income ($95 million), partially offset by the absence of the benefit from a state legislative change ($16 million).

Liquidity and Capital Resources

Dominion Energy depends on both cash generated from operations and external sources of liquidity to provide working capital and as a bridge to long-term financings. Dominion Energy’s material cash requirements include capital and investment expenditures, repaying short-term and long-term debt obligations and paying dividends on its common and preferred stock. This section should be read in conjunction with Item 7. MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.

Analysis of Cash Flows

Presented below are selected amounts related to Dominion Energy’s cash flows:

		2022				2021
(millions)
Cash, restricted cash and equivalents at January 1		$	408			$	247
Cash flows provided by (used in):
Operating activities			1,361				2,240
Investing activities			(5,148	)			(3,768	)
Financing activities			3,786				1,585
Net increase (decrease) in cash, restricted cash and equivalents			(1	)			57
Cash, restricted cash and equivalents at June 30		$	407			$	304

Operating Cash Flows

Net cash provided by Dominion Energy's operating activities decreased $879 million, inclusive of a $108 million decrease from discontinued operations. Net cash from continuing operations decreased $771 million, primarily due to lower deferred fuel cost recoveries ($557 million), current year refund payments to Virginia electric customers associated with the settlement of the 2021 Triennial Review ($297 million), increased margin deposits ($116 million) and changes in working capital ($332 million), partially offset by an increase of $531 million primarily associated with higher cash flows from electric and gas utilities driven by riders and customer usage factors.

Investing Cash Flows

Net cash used in Dominion Energy’s investing activities increased $1.4 billion, primarily due to the issuance of a short-term deposit ($2.0 billion) and an increase in plant construction and other property additions ($555 million), partially offset by a decrease in contributions to equity method affiliates including Atlantic Coast Pipeline ($952 million) and proceeds from the sale of assets and equity method investments ($146 million).

Financing Cash Flows

Net cash provided by Dominion Energy's financing activities increased $2.2 billion, primarily due to higher net issuances of long term debt ($1.6 billion), settlement of the stock purchase contract component of the 2019 Equity Units ($1.6 billion) and higher net credit facility borrowings ($425 million), partially offset by lower net issuances of short-term debt ($1.4 billion).

Credit Facilities and Short-Term Debt

As discussed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, Dominion Energy generally uses proceeds from short-term borrowings, including commercial paper, to satisfy short-term cash requirements not met through cash from operations. The levels of borrowing may vary significantly during the course of the year, depending on the timing and amount of cash requirements not satisfied by cash from operations. There have been no significant changes to Dominion Energy’s use of credit facilities and/or short-term debt during the six months ended June 30, 2022.

Dominion Energy Reliability InvestmentSM Program

Dominion Energy has an effective shelf registration statement with the SEC for the sale of up to $3.0 billion of variable denomination floating rate demand notes, called Dominion Energy Reliability InvestmentSM. The registration limits the principal amount that may be outstanding at any one time to $1.0 billion. The notes are offered on a continuous basis and bear interest at a floating rate per annum determined by the Dominion Energy Reliability Investment Committee, or its designee, on a weekly basis. The notes have no stated maturity date, are non-transferable and may be redeemed in whole or in part by Dominion Energy or at the investor’s option at any time. At June 30, 2022, Dominion Energy’s Consolidated Balance Sheets include $379 million with respect to such notes presented within short-term debt. The proceeds are used for general corporate purposes and to repay debt.

Credit Facilities

Dominion Energy maintains a $6.0 billion joint revolving credit facility which provides for a discount in the pricing of certain annual fees and amounts borrowed by Dominion Energy under the facility if Dominion Energy achieves certain annual renewable electric generation and diversity and inclusion objectives. At June 30, 2022, Dominion Energy had $3.1 billion of unused capacity under its joint revolving credit facility. See Note 16 to the Consolidated Financial Statements in this report for the balances of commercial paper and letters of credit outstanding.

In addition to the primary sources of short-term liquidity discussed above, from time to time Dominion Energy enters into separate supplementary credit facilities or term loans as discussed in Note 16 to the Consolidated Financial Statements in this report.

Long-Term Debt

Sustainability Revolving Credit Facility

Dominion Energy maintains a $900 million Sustainability Revolving Credit Facility which matures in 2024 and bears interest at a variable rate. The facility offers a reduced interest rate margin with respect to borrowed amounts allocated to certain environmental sustainability or social investment initiatives. In May 2022, Dominion Energy borrowed $900 million with the proceeds used to support environmental sustainability and social investment initiatives ($450 million) and for general corporate purposes ($450

million). In June 2022, Dominion Energy repaid $450 million borrowed for general corporate purposes. At June 30, 2022, Dominion Energy had $450 million outstanding under this supplemental credit facility.

Issuances and Borrowings of Long-Term Debt

Through June 30, 2022, Dominion Energy issued or borrowed the following long-term debt. Unless otherwise noted, the proceeds were used for general corporate purposes and/or to repay short-term debt.

Month		Type		Public / Private		Entity		Principal				Rate					Stated Maturity
								(millions)
January		Senior notes		Public		Virginia Power		$	600				2.400		%		2032
January		Senior notes		Public		Virginia Power			400				2.950		%		2051
May		Senior notes		Public		Virginia Power			600				3.750		%		2027
May		Senior notes		Public		Virginia Power			600				4.625		%		2052
Total issuances and borrowings								$	2,200

Dominion Energy currently meets the definition of a well-known seasoned issuer under SEC rules governing the registration, communication and offering processes under the Securities Act of 1933, as amended. The rules provide for a streamlined shelf registration process to provide registrants with timely access to capital. This allows Dominion Energy to use automatic shelf registration statements to register any offering of securities, other than those for exchange offers or business combination transactions.

Dominion Energy anticipates, excluding potential opportunistic financings, issuing between approximately $3.2 billion and $4.4 billion of long-term debt during 2022, inclusive of amounts issued through June 30, 2022 as shown in the table above. The raising of external capital is subject to certain regulatory requirements, including registration with the SEC for certain issuances.

Repayment, Repurchases and Redemptions of Long-Term Debt

Dominion Energy may from time to time reduce its outstanding debt and level of interest expense through redemption of debt securities prior to maturity or repurchases of debt securities in the open market, in privately negotiated transactions, through tender offers or otherwise.

The following long-term debt was repaid, repurchased or redeemed through June 30, 2022:

Month		Type		Entity		Principal (1)				Rate		Stated Maturity
						(millions)
Debt scheduled to mature in 2022						$	83			various
Early redemptions
None
Total repayments, repurchases and redemptions						$	83

(1)	Total amount redeemed prior to maturity includes remaining principal plus accrued interest.

In addition, in July and August 2022, Dominion Energy repurchased $19 million of senior notes with various interest rates and maturity dates.

See Note 16 to the Consolidated Financial Statements in this report and Note 18 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 for additional information regarding scheduled maturities of Dominion Energy’s long-term debt, including related average interest rates.

Remarketing of Long-Term Debt

In April 2022, Virginia Power remarketed two series of tax-exempt bonds, with an aggregate outstanding principal of approximately $138 million to new investors. Both bonds will bear interest at a coupon of 1.65% until May 2024, after which they will bear interest at a market rate to be determined at that time. In 2022, Dominion Energy expects to remarket approximately $165 million of its senior notes and tax-exempt bonds, inclusive of the Virginia Power tax-exempt bonds remarketed in April 2022.

Credit Ratings

As discussed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, Dominion Energy’s credit ratings affect its liquidity, cost of borrowing under credit facilities and collateral posting requirements under commodity contracts, as well as the rates at which it is able to offer debt securities. The credit ratings for Dominion Energy are affected by its financial profile, mix of regulated and nonregulated businesses and respective cash flows, changes in methodologies used by the ratings agencies and event risk, if applicable, such as major acquisitions or dispositions. A credit rating is not a recommendation to buy, sell or hold securities and should be evaluated independently of any other rating. As of June 30, 2022, there have been no changes in Dominion Energy’s credit ratings. In August 2022, Standard & Poor’s revised its credit ratings outlook for Dominion Energy from positive to stable and affirmed all other current ratings.

Financial Covenants

As discussed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, Dominion Energy is subject to various covenants present in the enabling agreements underlying Dominion Energy’s debt. As of June 30, 2022, there have been no material changes to covenants, nor any events of default under Dominion Energy’s covenants.

Common Stock, Preferred Stock and Other Equity Securities

In the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021, there is a discussion of Dominion Energy’s existing equity financing programs, including an at-the-market program and Dominion Energy Direct®. Through June 30, 2022, Dominion Energy has issued $91 million of stock through these programs. See Note 16 to the Consolidated Financial Statements in this report for additional information. Dominion Energy anticipates raising between $300 million and $500 million of capital through the issuance of common stock in 2022 and may issue up to $150 million of stock under settlement agreements associated with litigation acquired in the SCANA Combination as discussed in Note 17 to the Consolidated Financial Statements in this report, inclusive of 1.3 million shares of its common stock, valued at $102 million, issued through June 30, 2022. As discussed in Note 16 to the Consolidated Financial Statements in this report, in June 2022, Dominion Energy issued 19.4 million shares to settle the stock purchase contract component of the 2019 Equity Units and received proceeds of $1.6 billion. Dominion Energy will redeem all outstanding shares of Series A Preferred Stock in September 2022.

Through June 30, 2022, Dominion Energy has not repurchased and does not plan to repurchase in 2022 any shares of common stock, except for shares tendered by employees to satisfy tax withholding obligations on vested restricted stock.

Capital Expenditures

As of June 30, 2022, there have been no material changes to Dominion Energy’s total planned capital expenditures for each segment through 2026 as disclosed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.

Dividends

Dominion Energy believes that its operations provide a stable source of cash flow to contribute to planned levels of capital expenditures and maintain or grow the dividend on common shares. See Note 16 to the Consolidated Financial Statements in this report for additional information regarding Dominion Energy’s outstanding preferred stock and associated dividend rates.

Subsidiary Dividend Restrictions

As of June 30, 2022, there have been no material changes to the subsidiary dividend restrictions disclosed in the Dividends section of MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.

Credit Risk

Dominion Energy’s exposure to potential concentrations of credit risk results primarily from its energy marketing and price risk management activities. Presented below is a summary of Dominion Energy’s credit exposure at June 30, 2022 for these activities. Gross credit exposure for each counterparty is calculated as outstanding receivables plus any unrealized on- or off-balance sheet exposure, taking into account contractual netting rights.

		Gross Credit Exposure				Credit Collateral				Net Credit Exposure
(millions)
Investment grade(1)		$	8			$	—			$	8
Non-investment grade(2)			1				—				1
No external ratings:
Internally rated—investment grade(3)			118				—				118
Internally rated—non-investment grade(4)			58				29				29
Total(5)		$	185			$	29			$	156

(1)	Designations as investment grade are based upon minimum credit ratings assigned by Moody’s Investors Service and Standard & Poor’s. The five largest counterparty exposures, combined, for this category represented approximately 5% of the total net credit exposure.

(2)	The five largest counterparty exposures, combined, for this category represented less than 1% of the total net credit exposure.

(3)	The five largest counterparty exposures, combined, for this category represented approximately 66% of the total net credit exposure.

(4)	The five largest counterparty exposures, combined, for this category represented approximately 12% of the total net credit exposure.

(5) Excludes long-term purchase power agreements entered to satisfy legislative or state regulatory commission requirements.

Fuel and Other Purchase Commitments

There have been no material changes outside of the ordinary course of business to Dominion Energy’s fuel and other purchase commitments included in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.

Other Material Cash Requirements

As of June 30, 2022, there have been no material changes outside of the ordinary course of business to Dominion Energy’s other material cash requirements included in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. Such obligations include:

	•	Operating and finance lease obligations – See Note 14 to the Consolidated Financial Statements in this report;

	•	Regulatory liabilities – See Note 12 to the Consolidated Financial Statements in this report;

	•	AROs – See Note 14 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021;

	•	Employee benefit plan obligations – See Note 22 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021;

	•	Charitable commitments – See Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021;

	•	Off-balance sheet leasing arrangements – See Note 15 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021; and

	•	Guarantees – See Note 17 to the Consolidated Financial Statements in this report.

Future Issues and Other Matters

See Item 1. Business, Future Issues and Other Matters in MD&A and Notes 13 and 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 and Notes 13 and 17 to the Consolidated Financial Statements in this report for additional information on various environmental, regulatory, legal and other matters that may impact future results of operations, financial condition and/or cash flows.

CVOW Commercial Project

In March 2022, the Virginia Commission approved Virginia Power’s application filed in December 2021 for approval of a lease contract with an affiliated entity for the use of a Jones Act compliant offshore wind installation vessel currently under development. In April 2022, Virginia Power filed an application with the North Carolina Commission for approval of the same lease contract.

In May 2022, Virginia Power entered into forward purchase agreements with a notional amount of approximately €3.2 billion to hedge its foreign currency rate risk exposure to certain fixed price contracts for the major offshore construction and equipment components of the CVOW Commercial Project.

In August 2022, the Virginia Commission approved the application for certification of the Virginia Facilities component of the CVOW Commercial Project, the revenue requirement for the initial rate year of Rider OSW and noted that no further action was required with respect to Virginia Power’s foreign currency risk mitigation plan. The Virginia Commission also included a performance standard for operation of the CVOW Commercial Project, which would require that customers be held harmless for any shortfall in energy production below an annual net capacity factor of 42%, as determined on a three-year rolling average, with details on the implementation of such standard to be determined in a future proceeding.