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;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

•	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;

•	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 September 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)
Third Quarter
Net income attributable to Dominion Energy		$	778			$	654			$	124
Diluted EPS			0.91				0.79				0.12
Year-To-Date
Net income attributable to Dominion Energy		$	1,036			$	1,947			$	(911	)
Diluted EPS			1.17				2.35				(1.18	)

Overview

Third Quarter 2022 vs. 2021

Net income attributable to Dominion Energy increased 19%, primarily due to increased unrealized gains on economic hedging activities, partially offset by a decrease in net investment earnings on nuclear decommissioning trust funds.

Year-To-Date 2022 vs. 2021

Net income attributable to Dominion Energy decreased 47%, primarily due to a loss associated with the sale of Kewaunee, a decrease in net investment earnings on nuclear decommissioning trust funds, a net decrease associated with the impacts of Virginia Power’s 2021 Triennial Review, a charge for RGGI compliance costs deemed recovered through base rates and a charge in connection with a comprehensive settlement agreement for Virginia fuel expenses. 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:

		Third Quarter												Year-To-Date
		2022				2021				$ Change				2022				2021				$ Change
(millions)
Operating revenue		$	4,386			$	3,176			$	1,210			$	12,261			$	10,084			$	2,177
Electric fuel and other energy-related purchases			1,217				703				514				2,625				1,740				885
Purchased electric capacity			16				26				(10	)			45				62				(17	)
Purchased gas			138				60				78				985				665				320
Other operations and maintenance			991				927				64				3,030				2,808				222
Depreciation, depletion and amortization			727				621				106				2,120				1,833				287
Other taxes			231				223				8				719				702				17
Impairment of assets and other charges (benefits)			21				(222	)			243				426				194				232
Losses (gains) on sales of assets			(27	)			(3	)			(24	)			581				(2	)			583
Earnings from equity method investees			92				69				23				255				214				41
Other income (expense)			70				133				(63	)			(171	)			732				(903	)
Interest and related charges			329				407				(78	)			550				978				(428	)
Income tax expense			124				35				89				243				200				43
Net income (loss) from discontinued operations including noncontrolling interests			(3	)			65				(68	)			15				119				(104	)
Noncontrolling interests			—				12				(12	)			—				22				(22	)

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

Third Quarter 2022 vs. 2021

Operating revenue increased 38%, primarily reflecting:

•	A $569 million increase in fuel-related revenue as a result of an increase in commodity costs associated with sales to electric utility retail customers ($495 million) and gas utility customers ($74 million);

•	The absence of a $350 million decrease for refunds provided to retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review;

•	A $195 million increase associated with market prices affecting Millstone, including economic hedging impacts of net realized and unrealized gains on freestanding derivatives ($109 million);

•	A $131 million increase to recover the costs and an authorized return, as applicable, associated with Virginia Power non-fuel riders; and

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

These increases were partially offset by:

•	A $54 million decrease from the sale of non-wholly-owned nonregulated solar facilities; and

•	A $20 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 73%, primarily due to higher commodity costs for electric utilities ($495 million) and an increase in the use of purchased renewable energy credits at Virginia Power ($15 million), which are offset in operating revenue and do not impact net income.

Purchased gas increased $78 million, primarily due to an increase in commodity costs for gas utilities, which are offset in operating revenue and do not impact net income.

Other operations and maintenance increased 7%, primarily due to an increase in certain Virginia Power expenditures which are primarily recovered through state- and FERC-regulated rates and do not impact net income ($38 million) and an increase in the materials and supplies expense primarily as a result of higher prices ($26 million), partially offset by a decrease in salaries, wages and benefits ($17 million).

Depreciation, depletion and amortization increased 17%, primarily due to an increase for amortization of a regulatory asset established in the settlement of the 2021 Triennial Review ($61 million), an increase due to various projects being placed into service ($52 million) and an increase in RGGI related amortization ($33 million), which except for the suspended period of Rider RGGI is offset in operating revenue and does not impact net income, partially offset by depreciation rates revised in the first quarter of 2022 at Virginia Power ($21 million).

Impairment of assets and other charges (benefits) increased $243 million, primarily due to the absence of a benefit from the establishment of a regulatory asset associated with the early retirements of certain coal- and oil-fired generating units associated with the settlement of the 2021 Triennial Review ($549 million) and dismantling costs associated with certain retired electric generation facilities at Virginia Power ($18 million), partially offset by the absence of charges for CCRO benefits provided to retail electric customers in Virginia associated with Virginia Power’s 2021 Triennial Review ($318 million).

Losses (gains) on sales of assets decreased $24 million, primarily due to a gain on the transfer of certain non-utility property in South Carolina.

Earnings from equity method investees increased 33%, primarily due to an increase in equity method earnings from Cove Point as a result of additional processing services provided to existing customers during 2022.

Other income decreased 47%, primarily due to net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust funds ($99 million), partially offset by an increase in non-service components of pension and other postretirement employee benefit plan credits ($30 million).

Interest and related charges decreased 19%, primarily due to unrealized gains in 2022 compared to unrealized losses in 2021 associated with freestanding derivatives ($100 million), the absence of charges associated with the early redemption of certain securities in the third quarter of 2021 ($23 million), benefits associated with the early redemption of certain securities in the third quarter of 2022 ($17 million) and higher premiums received on interest rate derivatives ($17 million), partially offset by an increase from net debt issuances ($52 million) and increased interest on commercial paper borrowings due to higher interest rates ($18 million).

Income tax expense increased $89 million, primarily due to higher pre-tax income including lower state income tax benefits on pre-tax losses from nuclear decommissioning trusts and economic hedges.

Net income from discontinued operations including noncontrolling interests decreased $68 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 22%, primarily reflecting:

•	A $1.2 billion increase in fuel-related revenue as a result of an increase in commodity costs associated with sales to electric utility retail customers ($827 million) and gas utility customers ($362 million);

•	The absence of a $350 million decrease for refunds provided to retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review;

•	A $345 million increase to recover the costs and an authorized return, as applicable, associated with Virginia Power non-fuel riders;

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

•	A $78 million net increase from electric utility customers who elect to pay market based or other negotiated rates, including settlements of economic hedges at Virginia Power;

•	A $59 million net increase associated with market prices affecting Millstone, including economic hedging impacts of net realized and unrealized losses on freestanding derivatives ($182 million);

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

•	A $42 million increase from gas utility capital cost riders;

•	A $42 million increase following the approved base rate case for PSNC;

•	A $37 million increase in sales to electric utility retail customers associated with growth;

•	A $32 million increase in sales to customers from non-jurisdictional solar generation facilities at Virginia Power;

•	A $25 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 ($5 million); and

•	A $20 million increase in non-fuel base rates associated with the settlement in 2021 of the South Carolina electric base rate case.

These increases were partially offset by:

•	A $136 million decrease from the sale of non-wholly-owned nonregulated solar facilities;

•	A $72 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 $45 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 51%, primarily due to higher commodity costs for electric utilities ($827 million) and an increase in the use of purchased renewable energy credits at Virginia Power ($27 million), which are offset in operating revenue and do not impact net income.

Purchased gas increased 48%, primarily due to an increase in commodity costs for gas utilities ($362 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 ($51 million).

Other operations and maintenance increased 8%, primarily reflecting:

•	A $76 million increase in certain Virginia Power expenditures which are primarily recovered through state- and FERC-regulated rates and do not impact net income;

•	A $73 million increase in outage costs at Millstone ($61 million) and Virginia Power ($12 million);

•	A $36 million increase in the materials and supplies expense primarily as a result of higher prices;

•	A $33 million increase in storm damage and restoration costs in Virginia Power’s service territory; and

•	A $23 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;

•	A $27 million decrease in salaries, wages and benefits; and

•	A $26 million decrease in merger and integration-related costs associated with the SCANA Combination.

Depreciation, depletion and amortization increased 16%, primarily due to an increase for amortization of a regulatory asset established in the settlement of the 2021 Triennial Review ($183 million), an increase in RGGI related amortization ($120 million), which except for the suspended period 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 ($115 million), partially offset by depreciation rates revised in the first quarter of 2022 at Virginia Power ($62 million) and a decrease from the sale of non-wholly-owned nonregulated solar facilities ($40 million).

Impairment of assets and other charges (benefits) increased $232 million, primarily reflecting:

•	The absence of a benefit from the establishment of a regulatory asset associated with the early retirement of certain coal- and oil-fired generating units associated with the settlement of the 2021 Triennial Review ($549 million);

•	A charge in connection with a 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 ($60 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 for CCRO benefits provided to retail electric customers in Virginia associated with Virginia Power’s 2021 Triennial Review ($188 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 ($62 million); and

•	The absence of a write-off of nonregulated retail software development assets ($20 million).

Losses (gains) on sales of assets increased $583 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), a gain on the transfer of certain non-utility property in South Carolina ($18 million) and a gain on the sale of certain utility property in South Carolina ($16 million).

Earnings from equity method investees increased 19%, primarily due to an increase in equity method earnings from Cove Point as a result of additional processing services provided to existing customers during 2022.

Other income decreased $903 million, primarily due to net investment losses in 2022 compared to net investment gains in 2021 on nuclear decommissioning trust funds ($999 million), partially offset by an increase in non-service components of pension and other postretirement employee benefit plan credits ($84 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 44%, primarily due to higher unrealized gains associated with freestanding derivatives ($445 million), a decrease due to junior subordinated note repayments in 2021 ($52 million), higher premiums received on interest rate derivatives ($47 million), the absence of charges associated with the early redemption of certain securities in the third quarter of 2021 ($23 million) and benefits associated with the early redemption of certain securities in the third quarter of 2022 ($17 million), partially offset by an increase from net debt issuances ($119 million) and increased interest on commercial paper borrowings due to higher interest rates ($25 million).

Income tax expense increased 22%, primarily due to tax expense on the sale of Hope’s stock ($90 million), lower interim period allocation of investment tax credits ($34 million) and the absence of the benefit from a state legislative change ($21 million), partially offset by lower pre-tax income including lower state income tax benefits on pre-tax losses from nuclear decommissioning trusts and economic hedges ($109 million).

Net income from discontinued operations including noncontrolling interests decreased 87%, primarily due to the absence of operations in connection with the sale of the Q-Pipe Group.

Noncontrolling interests decreased $22 million, primarily due to the absence of operations in connection with the sale of certain nonregulated solar generating projects held in partnerships.

Outlook

As of September 30, 2022, there have been no material changes to Dominion Energy’s 2022 outlook as described in Item 2. MD&A in the Companies’ Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

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)
Third Quarter
Dominion Energy Virginia		$	617			$	599			$	18			$	0.74			$	0.74			$	—
Gas Distribution			67				69				(2	)			0.08				0.08				—
Dominion Energy South Carolina			175				151				24				0.21				0.19				0.02
Contracted Assets			121				119				2				0.15				0.15				—
Corporate and Other			(202	)			(284	)			82				(0.27	)			(0.37	)			0.10
Consolidated		$	778			$	654			$	124			$	0.91			$	0.79			$	0.12
Year-To-Date
Dominion Energy Virginia		$	1,575			$	1,464			$	111			$	1.92			$	1.81			$	0.11
Gas Distribution			486				415				71				0.59				0.52				0.07
Dominion Energy South Carolina			408				337				71				0.50				0.42				0.08
Contracted Assets			242				373				(131	)			0.29				0.46				(0.17	)
Corporate and Other			(1,675	)			(642	)			(1,033	)			(2.13	)			(0.86	)			(1.27	)
Consolidated		$	1,036			$	1,947			$	(911	)		$	1.17			$	2.35			$	(1.18	)

(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:

		Third Quarter												Year-To-Date
		2022				2021				% Change				2022				2021				% Change
Electricity delivered (million MWh)			24.9				24.0				4	%			67.9				65.0				4	%
Electricity supplied (million MWh):
Utility			25.0				24.1				4				68.1				65.5				4
Non-Jurisdictional			0.5				0.3				67				1.3				0.8				63
Degree days (electric distribution and utility service area):
Cooling			1,222				1,176				4				1,735				1,696				2
Heating			17				—				N/A				2,209				2,174				2
Average electric distribution customer accounts (thousands)			2,727				2,702				1				2,721				2,693				1

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

		Third Quarter 2022 vs. 2021 Increase (Decrease)								Year-To-Date 2022 vs. 2021 Increase (Decrease)
		Amount				EPS				Amount				EPS
(millions, except EPS)
Weather		$	(6	)		$	(0.01	)		$	1			$	—
Customer usage and other factors			11				0.01				41				0.05
Customer-elected rate impacts			(14	)			(0.02	)			42				0.05
Base rate case impacts			(15	)			(0.02	)			(33	)			(0.04	)
Rider equity return			28				0.03				56				0.07
Electric capacity			6				0.01				(6	)			(0.01	)
Depreciation and amortization			9				0.01				25				0.03
Renewable energy investment tax credits			28				0.03				51				0.06
Interest expense, net			(5	)			(0.01	)			(16	)			(0.02	)
Other			(24	)			(0.01	)			(50	)			(0.05	)
Share dilution			—				(0.02	)			—				(0.03	)
Change in net income contribution		$	18			$	—			$	111			$	0.11

Gas Distribution

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

		Third Quarter												Year-To-Date
		2022(1)				2021				% Change				2022(1)				2021				% Change
Gas distribution throughput (bcf):
Sales			13				14				(7	%)			128				124				3	%
Transportation			240				216				11				758				705				8
Heating degree days (gas distribution service area):
North Carolina			24				6				300				1,796				1,979				(9	)
Ohio and West Virginia			80				40				100				3,614				3,489				4
Utah, Wyoming and Idaho			3				49				(94	)			3,143				2,982				5
Average gas distribution customer accounts (thousands):
Sales			1,948				1,936				1				1,959				1,929				2
Transportation			1,127				1,126				—				1,134				1,133				—

(1)	Includes Hope through August 2022.

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

		Third Quarter 2022 vs. 2021 Increase (Decrease)								Year-To-Date 2022 vs. 2021 Increase (Decrease)
		Amount				EPS				Amount				EPS
(millions, except EPS)
Weather		$	1			$	—			$	3			$	—
Customer usage and other factors			6				0.01				25				0.03
Base rate case impacts			(2	)			—				33				0.04
Rider equity return			6				0.01				19				0.02
Interest expense, net			(5	)			(0.01	)			(7	)			(0.01	)
Other			(8	)			(0.01	)			(2	)			—
Share dilution			—				—				—				(0.01	)
Change in net income contribution		$	(2	)		$	—			$	71			$	0.07

Dominion Energy South Carolina

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

		Third Quarter												Year-To-Date
		2022				2021				% Change				2022				2021				% Change
Electricity delivered (million MWh)			6.6				6.6				—	%			17.7				17.3				2	%
Electricity supplied (million MWh)			6.9				6.8				1				18.6				18.1				3
Degree days (electric distribution service areas):
Cooling			514				448				15				767				620				24
Heating			—				—				—				783				839				(7	)
Average electric distribution customer accounts (thousands)			779				769				1				776				765				1
Gas distribution throughput (bcf):
Sales			15				16				(6	)			50				51				(2	)
Average gas distribution customer accounts (thousands)			428				414				3				425				411				3

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

		Third Quarter 2022 vs. 2021 Increase (Decrease)								Year-To-Date 2022 vs. 2021 Increase (Decrease)
		Amount				EPS				Amount				EPS
(millions, except EPS)
Weather		$	5			$	0.01			$	18			$	0.02
Customer usage and other factors			9				0.01				27				0.03
Customer-elected rate impacts			5				0.01				15				0.02
Base rate case & Natural Gas Rate Stabilization Act impacts			5				0.01				19				0.02
Capital cost rider			(2	)			—				(6	)			(0.01	)
Depreciation and amortization			(4	)			—				(12	)			(0.01	)
Interest expense, net			(7	)			(0.01	)			(10	)			(0.01	)
Other			13				—				20				0.03
Share dilution			—				(0.01	)			—				(0.01	)
Change in net income contribution		$	24			$	0.02			$	71			$	0.08

Contracted Assets

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

		Third Quarter												Year-To-Date
		2022				2021				% Change				2022				2021				% Change
Electricity supplied (million MWh)			5.0				5.7				(12	%)			13.0				16.4				(21	%)

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

		Third Quarter 2022 vs. 2021 Increase (Decrease)								Year-To-Date 2022 vs. 2021 Increase (Decrease)
		Amount				EPS				Amount				EPS
(millions, except EPS)
Margin(1)		$	30			$	0.04			$	3			$	—
Sale of non-wholly-owned nonregulated solar facilities			(10	)			(0.01	)			(19	)			(0.02	)
Planned outage costs			5				0.01				(44	)			(0.05	)
Renewable energy investment tax credits			—				—				(29	)			(0.04	)
Interest expense, net			(14	)			(0.02	)			(39	)			(0.05	)
Other			(9	)			(0.02	)			(3	)			—
Share dilution			—				—				—				(0.01	)
Change in net income contribution		$	2			$	—			$	(131	)		$	(0.17	)

(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:

		Third Quarter												Year-To-Date
		2022				2021				$ Change				2022				2021				$ Change
(millions, except EPS)
Specific items attributable to operating segments		$	(269	)		$	(303	)		$	34			$	(1,792	)		$	(617	)		$	(1,175	)
Specific items attributable to Corporate and Other segment			103				39				64				226				125				101
Total specific items			(166	)			(264	)			98				(1,566	)			(492	)			(1,074	)
Other corporate operations:
Interest expense, net			(77	)			(100	)			23				(238	)			(317	)			79
Other			41				80				(39	)			129				167				(38	)
Total other corporate operations			(36	)			(20	)			(16	)			(109	)			(150	)			41
Total net expense		$	(202	)		$	(284	)		$	82			$	(1,675	)		$	(642	)		$	(1,033	)
EPS impact		$	(0.27	)		$	(0.37	)		$	0.10			$	(2.13	)		$	(0.86	)		$	(1.27	)

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 September 30, 2022, other than the effects of required interim period provision for income taxes, this primarily included a $90 million benefit for the reversal of a deferred tax charge upon closing of the sale of Hope. For the nine months ended September 30, 2022, other than the effects of required interim period provision for income taxes, this primarily included a $231 million after-tax benefit for derivative mark-to-market changes and $15 million net income from discontinued operations, primarily associated with the Q-Pipe Group.

For the three months ended September 30, 2021, this primarily included $65 million net income from discontinued operations, primarily associated with the Q-Pipe Group, $17 million of after-tax charges associated with the early redemption of certain debt securities and an $11 million after-tax loss for derivative mark-to-market changes. For the nine months ended September 30, 2021, this primarily included $119 million net income from discontinued operations, primarily associated with the Q-Pipe Group, a $105 million after-tax benefit for derivative mark-to-market changes, $61 million of after-tax charges for workplace realignment, primarily related to a corporate office lease termination, $31 million of after-tax charges for merger and integration-related costs associated with the SCANA Combination and $17 million of after-tax charges associated with the early redemption of certain debt securities.

Virginia Power

Results of Operations

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

		Third Quarter												Year-To-Date
		2022				2021				$ Change				2022				2021				$ Change
(millions)
Net income		$	571			$	556			$	15			$	975			$	1,344			$	(369	)

Overview

Third Quarter 2022 vs. 2021

Net income increased 3%, primarily due to a net increase associated with the impacts of the 2021 Triennial Review.

Year-To-Date 2022 vs. 2021

Net income decreased 27%, primarily due to a decrease in net investment earnings on nuclear decommissioning trust funds, a net decrease associated with the impacts of the 2021 Triennial Review, a charge for RGGI compliance costs deemed recovered through base rates and a charge in connection with a comprehensive settlement agreement for Virginia fuel expenses.

Analysis of Consolidated Operations

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

		Third Quarter												Year-To-Date
		2022				2021				$ Change				2022				2021				$ Change
(millions)
Operating revenue		$	2,875			$	1,976			$	899			$	7,217			$	5,547			$	1,670
Electric fuel and other energy-related purchases			981				515				466				2,030				1,270				760
Purchased electric capacity			11				15				(4	)			33				16				17
Other operations and maintenance			531				470				61				1,579				1,382				197
Depreciation and amortization			451				343				108				1,305				990				315
Other taxes			80				86				(6	)			238				262				(24	)
Impairment of assets and other charges (benefit)			19				(230	)			249				432				(269	)			701
Other income (expense)			3				21				(18	)			(37	)			93				(130	)
Interest and related charges			168				136				32				461				400				61
Income tax expense			66				106				(40	)			127				245				(118	)

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

Third Quarter 2022 vs. 2021

Operating revenue increased 45%, primarily reflecting:

•	A $445 million increase in fuel-related revenue as a result of a net increase in commodity costs associated with sales to electric utility retail customers;

•	The absence of a $350 million decrease for refunds provided to retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review; and

•	A $131 million increase to recover the costs and an authorized return, as applicable, associated with non-fuel riders; partially offset by

•	A $20 million decrease reflecting a reduction in base rates associated with the settlement of the 2021 Triennial Review; and

•	A $18 million net decrease from electric utility customers who elect to pay market based or other negotiated rates, including settlements of economic hedges.

Electric fuel and other energy-related purchases increased 90%, primarily due to higher commodity costs for electric utilities ($445 million) and an increase in the use of purchased renewable energy credits ($15 million), which are offset in operating revenue and do not impact net income.

Other operations and maintenance increased 13%, 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 31%, 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 ($33 million), which except for the suspended period 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 ($33 million), partially offset by depreciation rates revised in the first quarter of 2022 ($21 million).

Impairment of assets and other charges increased $249 million, primarily due to the absence of a benefit from the establishment of a regulatory asset associated with the early retirements of certain coal- and oil-fired generating units associated with the settlement of the 2021 Triennial Review ($549 million) and dismantling costs associated with certain retired electric generation facilities ($18 million), partially offset by the absence of charges for CCRO benefits provided to retail electric customers in Virginia associated with Virginia Power’s 2021 Triennial Review ($318 million).

Other income decreased 86%, 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 24%, primarily due to an increase from net debt issuances in 2022 and 2021.

Income tax expense decreased 38%, primarily due to higher interim period tax allocation benefits.

Year-To-Date 2022 vs. 2021

Operating revenue increased 30%, primarily reflecting:

•	A $717 million increase in fuel-related revenue as a result of a net increase in commodity costs associated with sales to electric utility retail customers;

•	The absence of a $350 million decrease for refunds provided to retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review;

•	A $345 million increase to recover the costs and an authorized return, as applicable, associated with non-fuel riders;

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

•	A $58 million net increase from electric utility customers who elect to pay market based or other negotiated rates, including settlements of economic hedges;

•	A $35 million increase in sales to electric utility retail customers associated with economic and other usage factors;

•	A $32 million increase in sales to customers from non-jurisdictional solar generation facilities;

•	A $20 million increase in sales to electric utility retail customers associated with growth; and

•	A $1 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 ($18 million).

These increases were partially offset by:

•	A $45 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 60%, primarily due to higher commodity costs for electric utilities ($717 million) and an increase in the use of purchased renewable energy credits ($27 million), which are offset in operating revenue and do not impact net income.

Purchased electric capacity increased $17 million, primarily due to an increase in expense related to the annual PJM capacity performance market effective June 2021.

Other operations and maintenance increased 14%, primarily reflecting:

•	A $76 million increase in certain expenses which are primarily recovered through state- and FERC-regulated rates and do not impact net income;

•	A $33 million increase in storm damage and service restoration costs;

•	A $25 million increase in outside services;

•	A $17 million increase in bad debt expense; and

•	A $17 million increase in the materials and supplies expense primarily as a result of higher prices.

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 ($183 million), an increase in RGGI related amortization ($120 million), which except for the suspended period 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 ($72 million), partially offset by depreciation rates revised in the first quarter of 2022 ($62 million).

Impairment of assets and other charges increased $701 million, primarily reflecting:

•	The absence of a benefit from the establishment of a regulatory asset associated with the early retirement of certain coal- and oil-fired generating units associated with the settlement of the 2021 Triennial Review ($549 million);

•	A charge in connection with a 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 ($60 million); partially offset by

•	The absence of charges for CCRO benefits provided to retail electric customers in Virginia associated with Virginia Power’s 2021 Triennial Review ($188 million); and

•	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 $130 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 15%, primarily due to an increase from net debt issuances in 2022 and 2021.

Income tax expense decreased 48%, primarily due to lower pre-tax income ($141 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			2,671				3,535
Investing activities			(4,519	)			(6,607	)
Financing activities			1,780				3,092
Net increase (decrease) in cash, restricted cash and equivalents			(68	)			20
Cash, restricted cash and equivalents at September 30		$	340			$	267

Operating Cash Flows

Net cash provided by Dominion Energy's operating activities decreased $864 million, inclusive of a $172 million decrease from discontinued operations. Net cash from continuing operations decreased $692 million, primarily due to lower deferred fuel cost recoveries ($994 million), current year refund payments to Virginia electric customers associated with the settlement of the 2021 Triennial Review ($315 million) and changes in working capital ($469 million), partially offset by lower margin deposits ($387 million) and an increase of $699 million primarily as the result of higher operating cash flows from electric utility and gas distribution operations driven by riders, customer usage and other factors.

Investing Cash Flows

Net cash used in Dominion Energy’s investing activities decreased $2.1 billion, primarily due to the absence of the repayment of the Q-Pipe Transaction deposit ($1.3 billion), a decrease in contributions to equity method affiliates including Atlantic Coast Pipeline ($972 million) and net proceeds from the sale of Hope ($722 million), partially offset by an increase in plant construction and other property additions ($1.1 billion).

Financing Cash Flows

Net cash provided by Dominion Energy's financing activities decreased $1.3 billion primarily due to lower net issuances of short-term debt ($2.4 billion), the redemption of the Series A Preferred Stock ($1.6 billion) and lower issuance of short-term notes ($1.3 billion), partially offset by higher net issuances of long-term debt ($2.6 billion) and settlement of the stock purchase contract component of the 2019 Equity Units ($1.6 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 nine months ended September 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 September 30, 2022, Dominion Energy’s Consolidated Balance Sheets include $343 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 September 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 September 30, 2022, Dominion Energy had $450 million outstanding under this supplemental credit facility.

Issuances and Borrowings of Long-Term Debt

Through September 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
August		Senior notes		Public		Dominion Energy			400				4.350		%		2032
August		Senior notes		Public		Dominion Energy			600				4.850		%		2052
August		Senior notes		Private		Questar Gas			125				4.390		%		2032
August		Senior notes		Private		Questar Gas			125				4.700		%		2052
Total issuances and borrowings								$	3,450

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 September 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 September 30, 2022:

Month		Type		Entity		Principal (1)				Rate				Stated Maturity
						(millions)
Debt scheduled to mature in 2022						$	772			various
Early repurchases & redemptions
July		Senior Note		Dominion Energy		5					4.250	%		2028
Multiple		Senior Note		Dominion Energy		98					2.250	%		2031
Multiple		Senior Note		Dominion Energy		14					3.300	%		2041
Multiple		Senior Note		Dominion Energy		28					1.450	%		2026
September		Senior Note		Dominion Energy		4					4.700	%		2044
Total repayments, repurchases and redemptions						$	921

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

In addition, in October 2022, Dominion Energy repurchased $61 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 2022, Dominion Energy completed the remarketing of $165 million of its tax-exempt bonds, composed of the Virginia Power bonds remarketed in April 2022 and the Dominion Energy bonds remarketed in October 2022. See Note 16 to the Consolidated Financial Statements in this report for additional information.

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 September 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 September 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 September 30, 2022, Dominion Energy has issued $134 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 September 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 redeemed all outstanding shares of Series A Preferred Stock in September 2022 for $1.6 billion.

Through September 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 September 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 September 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 September 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)		$	28			$	—			$	28
Non-investment grade(2)			35				34				1
No external ratings:
Internally rated—investment grade(3)			111				21				90
Internally rated—non-investment grade(4)			14				—				14
Total(5)		$	188			$	55			$	133

(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 13% of the total net credit exposure.

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

(3)	The five largest counterparty exposures, combined, for this category represented approximately 67% of the total net credit exposure.

(4)	The five largest counterparty exposures, combined, for this category represented approximately 5% 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 September 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.

Business Review

In November 2022, Dominion Energy announced the commencement of a business review of value-maximizing strategic business actions, alternatives to its current business mix and capital allocation and regulatory options which may assist customers to manage costs and provide greater predictability to its long-term, state-regulated utility value proposition. While the impacts cannot be estimated until the review is completed, which is expected in 2023, implementation of recommendations resulting from the business review could have a material impact on Dominion Energy's future results of operations, financial condition and/or cash flows.

Federal Income Tax Laws

The IRA extends the investment and production tax credits for renewable technologies including wind and solar, and expands the qualifying technologies to include stand-alone storage, hydrogen, renewable natural gas, nuclear and, after 2024, other zero-emissions facilities. The IRA supersedes prior renewable energy legislation discussed in Note 5 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The IRA contains a two-tiered credit system applicable to both the production and investment tax credits with a lower base credit amount that can be increased up to five times if the taxpayer can satisfy certain labor requirements.

The IRA imposes a 15% alternative minimum tax on GAAP net income, as adjusted for certain items, of corporations in excess of $1 billion, for tax years beginning after December 31, 2022. Entities that are subject to the alternative minimum tax may use tax credits to reduce the liability by up to 75% and will receive a tax credit carryforward with an indefinite life that can be claimed against the regular tax in future years. Deferred taxes will continue to be measured at the regular tax rate. Pending additional guidance, the alternative minimum tax is not expected to have an effect on the assessment of the realizability of Dominion Energy’s deferred tax assets or a material impact on Dominion Energy’s future results of operations or cash flows.

Future Environmental Regulations

The IRA includes provisions which impose an annual fee for waste methane emissions from the oil and natural gas industry beginning with emissions reported in calendar year 2024 to the extent that an entity’s emissions exceed a stated threshold, with implementation to be addressed by future rulemaking by the EPA. Pending the completion of such rulemaking, Dominion Energy currently does not expect these provisions to materially affect its 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. Also in August 2022, Virginia Power filed a petition for limited reconsideration relating to the performance standard for operation of the CVOW Commercial Project included in the Virginia Commission’s August order. The Virginia Commission granted reconsideration and suspended in part the August order pending its reconsideration with Rider OSW approved on an interim basis. In October 2022, Virginia Power, Office of the Attorney General of Virginia and other parties filed a settlement agreement with the Virginia Commission for approval. The settlement agreement provides for a voluntary cost sharing mechanism resulting from unforeseen construction cost increases; specifically, that Virginia Power will be eligible to recover 50% of such incremental costs which fall between $10.3 billion and $11.3 billion with no recovery of such incremental costs which fall between $11.3 billion and $13.7 billion. There is no voluntary cost sharing mechanism for any total construction costs in excess of $13.7 billion, the recovery of which would be determined in a future Virginia Commission preceding. The settlement agreement also provides for customers to receive the maximum benefits available under the IRA including that to the extent the IRA reduces the total construction costs, such reductions will also be applied to the cost sharing bands discussed above. In addition, the settlement agreement includes enhanced performance reporting provisions, in lieu of a performance guarantee, for the operation of the CVOW Commercial Project. To the extent the annual net capacity factor is below 42%, as determined on a three-year rolling average, Virginia Power is required to provide detailed explanation of the factors contributing to any shortfall to the Virginia Commission which could determine in a future proceeding a remedy for incremental costs incurred associated with any deemed unreasonable or imprudent actions of Virginia Power. If the performance standard included in the August order is maintained in the Virginia Commission’s final order, it could result in cancellation of the project with Virginia Power eligible to recover costs incurred to date.