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Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2023
or
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
| Commission File Number | Exact name of registrants as specified in their charters, address of principal executive offices and registrants’ telephone number | I.R.S. Employer Identification Number | ||
| 001-08489 | DOMINION ENERGY, INC. | 54-1229715 | ||
| 000-55337 | VIRGINIA ELECTRIC AND POWER COMPANY | 54-0418825 | ||
| 120 Tredegar Street Richmond**,** Virginia 23219 (804) 819-2284 |
State or other jurisdiction of incorporation or organization of the registrants: Virginia
Securities registered pursuant to Section 12(b) of the Act:
| Registrant | Trading Symbol | Title of Each Class | Name of Each Exchange on Which Registered |
| DOMINION ENERGY, INC. | D | Common Stock, no par value | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Dominion Energy, Inc. Yes ☒ No ☐ Virginia Electric and Power Company Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Dominion Energy, Inc. Yes ☒ No ☐ Virginia Electric and Power Company Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Dominion Energy, Inc.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | Emerging growth company | ☐ | |
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Virginia Electric and Power Company
| Large accelerated filer | ☐ | Accelerated filer | ☐ | Emerging growth company | ☐ | |
| Non-accelerated filer | ☒ | Smaller reporting company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Dominion Energy, Inc. Yes ☐ No ☒ Virginia Electric and Power Company Yes ☐ No ☒
At November 2, 2023, the latest practicable date for determination, Dominion Energy, Inc. had 836,796,771 shares of common stock outstanding and Virginia Electric and Power Company had 314,178 shares of common stock outstanding. Dominion Energy, Inc. is the sole holder of Virginia Electric and Power Company’s common stock.
This combined Form 10-Q represents separate filings by Dominion Energy, Inc. and Virginia Electric and Power Company. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Virginia Electric and Power Company makes no representation as to the information relating to Dominion Energy, Inc.’s other operations.
VIRGINIA ELECTRIC AND POWER COMPANY MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND IS FILING THIS FORM 10-Q UNDER THE REDUCED DISCLOSURE FORMAT.
COMBINED INDEX
| Page Number | ||
| Glossary of Terms | 3 | |
| PART I. Financial Information | ||
| Item 1. | Financial Statements | 9 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 71 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 89 |
| Item 4. | Controls and Procedures | 90 |
| PART II. Other Information | ||
| Item 1. | Legal Proceedings | 91 |
| Item 1A. | Risk Factors | 91 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 91 |
| Item 5. | Other Information | 92 |
| Item 6. | Exhibits | 93 |
GLOSSARY OF TERMS
The following abbreviations or acronyms used in this Form 10-Q are defined below:
| Abbreviation or Acronym | Definition | |
| 2017 Tax Reform Act | An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (previously known as The Tax Cuts and Jobs Act) enacted on December 22, 2017 | |
| 2019 Equity Units | Dominion Energy’s 2019 Series A Equity Units issued in June 2019, initially in the form of 2019 Series A Corporate Units, which consisted of a stock purchase contract and a 1/10 interest in a share of the Series A Preferred Stock | |
| 2021 Triennial Review | Virginia Commission review of Virginia Power’s earned return on base rate generation and distribution services for the four successive 12-month test periods beginning January 1, 2017 and ending December 31, 2020 | |
| 2023 Biennial Review | Virginia Commission review of Virginia Power’s earned return on base rate generation and distribution services for the two successive 12-month test periods beginning January 1, 2021 and ending December 31, 2022 and prospective rate base setting for the succeeding annual periods beginning January 1, 2024 and ending December 31, 2025 | |
| 2025 Biennial Review | Future Virginia Commission review of Virginia Power’s earned return on base rate generation and distribution services for the two successive 12-month test periods beginning January 1, 2023 and ending December 31, 2024 and prospective rate base setting for the succeeding annual periods beginning January 1, 2026 and ending December 31, 2027 | |
| ACE Rule | Affordable Clean Energy Rule | |
| AFUDC | Allowance for funds used during construction | |
| AMI | Advanced Metering Infrastructure | |
| AOCI | Accumulated other comprehensive income (loss) | |
| ARO | Asset retirement obligation | |
| Atlantic Coast Pipeline | Atlantic Coast Pipeline, LLC, a limited liability company owned by Dominion Energy and Duke Energy | |
| Atlantic Coast Pipeline Project | A previously proposed approximately 600-mile natural gas pipeline running from West Virginia through Virginia to North Carolina which would have been owned by Dominion Energy and Duke Energy | |
| bcf | Billion cubic feet | |
| Bear Garden | A 622 MW combined-cycle, natural gas-fired power station in Buckingham County, Virginia | |
| BHE | The legal entity, Berkshire Hathaway Energy Company, one or more of its consolidated subsidiaries (including Eastern Energy Gas Holdings, LLC, Northeast Midstream Partners, LP and Cove Point effective November 2020), or the entirety of Berkshire Hathaway Energy Company and its consolidated subsidiaries | |
| CAA | Clean Air Act | |
| CCR | Coal combustion residual | |
| CCRO | Customer credit reinvestment offset | |
| CEO | Chief Executive Officer | |
| CEP | Capital Expenditure Program, as established by House Bill 95, Ohio legislation enacted in 2011, deployed by East Ohio to recover certain costs associated with capital investment | |
| CERCLA | Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund | |
| CFIUS | The Committee on Foreign Investment in the U.S. | |
| CFO | Chief Financial Officer | |
| CO2 | Carbon dioxide |
| Colonial Trail West | A 142 MW utility-scale solar power station located in Surry County, Virginia | |
| Companies | Dominion Energy and Virginia Power, collectively | |
| Contracted Energy | Contracted Energy operating segment, formerly known as the Contracted Assets operating segment | |
| Cooling degree days | Units measuring the extent to which the average daily temperature is greater than 65 degrees Fahrenheit, or 75 degrees Fahrenheit in DESC’s service territory, calculated as the difference between 65 or 75 degrees, as applicable, and the average temperature for that day | |
| Cove Point | Cove Point LNG, LP (formerly known as Dominion Energy Cove Point LNG, LP) | |
| CPCN | Certificate of Public Convenience and Necessity | |
| CVOW Commercial Project | A proposed 2.6 GW wind generation facility 27 miles off the coast of Virginia Beach, Virginia in federal waters adjacent to the CVOW Pilot Project and associated interconnection facilities in and around Virginia Beach, Virginia | |
| CVOW Pilot Project | A 12 MW wind generation facility 27 miles off the coast of Virginia Beach, Virginia in federal waters | |
| CWA | Clean Water Act | |
| DECP Holdings | The legal entity DECP Holdings, Inc., which holds Dominion Energy's noncontrolling interest in Cove Point | |
| DEQPS | MountainWest Pipeline Services, Inc. (formerly known as Dominion Energy Questar Pipeline Services, Inc.) | |
| DES | Dominion Energy Services, Inc. | |
| DESC | The legal entity, Dominion Energy South Carolina, Inc., one or more of its consolidated entities or operating segment, or the entirety of Dominion Energy South Carolina, Inc. and its consolidated entities | |
| DGI | Dominion Generation, Inc. | |
| DOE | U.S. Department of Energy | |
| Dominion Energy | The legal entity, Dominion Energy, Inc., one or more of its consolidated subsidiaries (other than Virginia Power) or operating segments, or the entirety of Dominion Energy, Inc. and its consolidated subsidiaries | |
| Dominion Energy Direct® | A dividend reinvestment and open enrollment direct stock purchase plan | |
| Dominion Energy Questar Pipeline | The legal entity, MountainWest Pipeline, LLC (formerly known as Dominion Energy Questar Pipeline, LLC), one or more of its consolidated subsidiaries (including its 50% noncontrolling interest in White River Hub, LLC), or the entirety of Dominion Energy Questar Pipeline, LLC and its consolidated subsidiaries | |
| Dominion Energy South Carolina | Dominion Energy South Carolina operating segment | |
| Dominion Energy Virginia | Dominion Energy Virginia operating segment | |
| Dominion Privatization | Dominion Utility Privatization, LLC, a joint venture between Dominion Energy and Patriot | |
| DSM | Demand-side management | |
| Dth | Dekatherm | |
| Duke Energy | The legal entity, Duke Energy Corporation, one or more of its consolidated subsidiaries, or the entirety of Duke Energy Corporation and its consolidated subsidiaries | |
| East Ohio | The East Ohio Gas Company, doing business as Dominion Energy Ohio | |
| East Ohio Transaction | The proposed sale by Dominion Energy to Enbridge of all issued and outstanding capital stock in Dominion Energy Questar Corporation and its consolidated subsidiaries, which following a proposed reorganization will include East Ohio and Dominion Energy Gas Distribution, LLC, pursuant to a purchase and sale agreement entered into on September 5, 2023 |
| Enbridge | The legal entity, Enbridge Inc., one or more of its consolidated subsidiaries (including Enbridge Elephant Holdings, LLC, Enbridge Parrot Holdings, LLC, and Enbridge Quail Holdings, LLC), or the entirety of Enbridge Inc. and its consolidated subsidiaries | |
| EnergySolutions | EnergySolutions, LLC | |
| EPA | U.S. Environmental Protection Agency | |
| EPS | Earnings per common share | |
| FCC | Federal Communications Commission | |
| FERC | Federal Energy Regulatory Commission | |
| FTRs | Financial transmission rights | |
| GAAP | U.S. generally accepted accounting principles | |
| Gas Distribution | Gas Distribution operating segment | |
| GENCO | South Carolina Generating Company, Inc. | |
| GHG | Greenhouse gas | |
| Greensville County | A 1,629 MW combined-cycle, natural gas-fired power station in Greensville County, Virginia | |
| GTSA | Virginia Grid Transformation and Security Act of 2018 | |
| GW | Gigawatt | |
| Heating degree days | Units measuring the extent to which the average daily temperature is less than 65 degrees Fahrenheit, or 60 degrees Fahrenheit in DESC’s service territory, calculated as the difference between 65 or 60 degrees, as applicable, and the average temperature for that day | |
| Hope | Hope Gas, Inc., doing business as Dominion Energy West Virginia through August 2022 | |
| ISO | Independent system operator | |
| Jones Act | The Coastwise Merchandise Statute (commonly known as the Jones Act) 46 U.S.C. §55102 regulating U.S. maritime commerce | |
| Kewaunee | Kewaunee nuclear power station | |
| kV | Kilovolt | |
| LNG | Liquefied natural gas | |
| MD&A | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |
| MGD | Million gallons per day | |
| Millstone | Millstone nuclear power station | |
| MW | Megawatt | |
| MWh | Megawatt hour | |
| NAV | Net asset value | |
| NND Project | V.C. Summer Units 2 and 3 nuclear development project under which DESC and Santee Cooper undertook to construct two Westinghouse AP1000 Advanced Passive Safety nuclear units in Jenkinsville, South Carolina | |
| North Anna | North Anna nuclear power station | |
| North Carolina Commission | North Carolina Utilities Commission | |
| NOX | Nitrogen oxide | |
| NRC | U.S. Nuclear Regulatory Commission | |
| Ohio Commission | Public Utilities Commission of Ohio |
| Order 1000 | Order issued by FERC adopting requirements for electric transmission planning, cost allocation and development | |
| ozone season | The period May 1st through September 30th, as determined on a federal level | |
| Patriot | Patriot Utility Privatizations, LLC, a joint venture between Foundation Infrastructure Partners, LLC and John Hancock Life Insurance Company (U.S.A.) and affiliates | |
| PFAS | Per- and polyfluorinated substances, a group of widely used chemicals that break down very slowly over time in the environment | |
| PIPP | Percentage of Income Payment Plan deployed by East Ohio | |
| PIR | Pipeline Infrastructure Replacement program deployed by East Ohio | |
| PJM | PJM Interconnection, LLC | |
| PSD | Prevention of significant deterioration | |
| PSNC | Public Service Company of North Carolina, Incorporated, doing business as Dominion Energy North Carolina | |
| PSNC Transaction | The proposed sale by Dominion Energy to Enbridge of all of its membership interests in Fall North Carolina Holdco LLC and its consolidated subsidiaries, which following a proposed reorganization will include PSNC, pursuant to a purchase and sale agreement entered into on September 5, 2023 | |
| Q-Pipe Group | Collectively, Dominion Energy Questar Pipeline, DEQPS and MountainWest Energy Holding Company, LLC (formerly known as QPC Holding Company, LLC and its subsidiary MountainWest Southern Trails Pipeline Company (formerly known as Questar Southern Trails Pipeline Company)) | |
| Questar Gas | Questar Gas Company, doing business as Dominion Energy Utah, Dominion Energy Wyoming and Dominion Energy Idaho | |
| Questar Gas Transaction | The proposed sale by Dominion Energy to Enbridge of all of its membership interests in Fall West Holdco LLC and its consolidated subsidiaries, which following a proposed reorganization will include Questar Gas, Wexpro, Wexpro II Company, Wexpro Development Company, Dominion Energy Wexpro Services Company, Questar InfoComm Inc. and Dominion Gas Projects Company, LLC, pursuant to a purchase and sale agreement entered into on September 5, 2023 | |
| Regulation Act | Legislation effective July 1, 2007, that amended the Virginia Electric Utility Restructuring Act and fuel factor statute, which legislation is also known as the Virginia Electric Utility Regulation Act, as amended in 2015, 2018 and 2023 | |
| RGGI | Regional Greenhouse Gas Initiative | |
| Rider CCR | A rate adjustment clause associated with the recovery of costs related to the removal of CCR at certain power stations | |
| Rider CE | A rate adjustment clause associated with the recovery of costs related to certain renewable generation, energy storage and related transmission facilities in Virginia as well as certain small-scale distributed generation projects and related transmission facilities | |
| Rider D | A rate mechanism which allows PSNC to recover from customers all prudently incurred gas costs and the related portion of uncollectible expenses as well as losses on negotiated gas and transportation sales | |
| Rider E | A rate adjustment clause associated with the recovery of costs related to certain capital projects at Virginia Power's electric generating stations to comply with federal and state environmental laws and regulations | |
| Rider GT | A rate adjustment clause associated with the recovery of costs associated with electric distribution grid transformation projects that the Virginia Commission has approved as authorized by the GTSA | |
| Rider GV | A rate adjustment clause associated with the recovery of costs related to Greensville County | |
| Rider OSW | A rate adjustment clause associated with costs incurred to construct, own and operate the CVOW Commercial Project |
| Rider PPA | A rate adjustment clause associated with the recovery of costs associated with power purchase agreements for the energy, capacity, ancillary services and renewable energy credits owned by third parties | |
| Rider R | A rate adjustment clause associated with the recovery of costs related to Bear Garden | |
| Rider RBB | A rate adjustment clause associated with the recovery of costs related to installation of broadband capacity in certain unserved rural areas | |
| Rider RGGI | A rate adjustment clause associated with the recovery of costs related to the purchase of allowances through the RGGI market-based trading program for CO2 | |
| Rider RPS | A rate adjustment clause associated with the recovery of costs related to the mandatory renewable portfolio standard program established by the VCEA | |
| Rider S | A rate adjustment clause associated with the recovery of costs related to the Virginia City Hybrid Energy Center | |
| Rider SNA | A rate adjustment clause associated with costs relating to the preparation of the applications for subsequent license renewal to the NRC to extend the operating licenses of Surry and North Anna and related projects | |
| Rider T1 | A rate adjustment clause to recover the difference between revenues produced from transmission rates included in base rates, and the new total revenue requirement developed annually for the rate years effective September 1 | |
| Rider U | A rate adjustment clause associated with the recovery of costs of new underground distribution facilities | |
| Rider US-3 | A rate adjustment clause associated with the recovery of costs related to Colonial Trail West and Spring Grove 1 | |
| Rider US-4 | A rate adjustment clause associated with the recovery of costs related to Sadler Solar | |
| Rider W | A rate adjustment clause associated with the recovery of costs related to Warren County | |
| ROE | Return on equity | |
| RTO | Regional transmission organization | |
| Sadler Solar | A 100 MW utility-scale solar power station located in Greensville County, Virginia | |
| Santee Cooper | South Carolina Public Service Authority | |
| SCANA | The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries, or the entirety of SCANA Corporation and its consolidated subsidiaries | |
| SCANA Combination | Dominion Energy’s acquisition of SCANA completed on January 1, 2019 pursuant to the terms of the agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA | |
| SCANA Merger Approval Order | Final order issued by the South Carolina Commission on December 21, 2018 setting forth its approval of the SCANA Combination | |
| SCDOR | South Carolina Department of Revenue | |
| SEC | U.S. Securities and Exchange Commission | |
| SEEM | Southeast Energy Exchange Market | |
| Series A Preferred Stock | Dominion Energy’s Series A Cumulative Perpetual Convertible Preferred Stock, without par value, with a liquidation preference of $1,000 per share (previously designated the 1.75% Series A Cumulative Perpetual Convertible Preferred Stock) | |
| Series B Preferred Stock | Dominion Energy’s 4.65% Series B Fixed-Rate Cumulative Redeemable Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000 per share | |
| Series C Preferred Stock | Dominion Energy’s 4.35% Series C Fixed-Rate Cumulative Redeemable Perpetual Preferred Stock, without par value, with a liquidation preference of $1,000 per share | |
| South Carolina Commission | Public Service Commission of South Carolina |
| Southwest Gas | The legal entity, Southwest Gas Holdings, Inc., one or more of its consolidated subsidiaries, or the entirety of Southwest Gas Holdings, Inc. and its consolidated subsidiaries | |
| Spring Grove 1 | A 98 MW utility-scale solar power station located in Surry County, Virginia | |
| Spruce Power | The legal entity, Spruce Power Holding Corporation, one or more of its consolidated subsidiaries, or the entirety of Spruce Power Holding Corporation and its consolidated subsidiaries | |
| Standard & Poor’s | Standard & Poor’s Ratings Services, a division of S&P Global Inc. | |
| Summer | V.C. Summer nuclear power station | |
| Surry | Surry nuclear power station | |
| UEX | Uncollectible Expense Rider deployed by East Ohio | |
| Utah Commission | Utah Public Service Commission | |
| VCEA | Virginia Clean Economy Act of March 2020 | |
| VEBA | Voluntary Employees’ Beneficiary Association | |
| VIE | Variable interest entity | |
| Virginia City Hybrid Energy Center | A 610 MW baseload carbon-capture compatible, clean coal powered electric generation facility in Wise County, Virginia | |
| Virginia Commission | Virginia State Corporation Commission | |
| Virginia Power | The legal entity, Virginia Electric and Power Company, one or more of its consolidated subsidiaries or operating segment, or the entirety of Virginia Electric and Power Company and its consolidated subsidiaries | |
| Warren County | A 1,349 MW combined-cycle, natural gas-fired power station in Warren County, Virginia | |
| Wexpro | The legal entity, Wexpro Company, one or more of its consolidated subsidiaries, or the entirety of Wexpro Company and its consolidated subsidiaries | |
| Wisconsin Commission | Public Service Commission of Wisconsin | |
| WP&L | Wisconsin Power and Light Company, a subsidiary of Alliant Energy Corporation | |
| WPSC | Wisconsin Public Service Corporation, a subsidiary of WEC Energy Group | |
| Wrangler | Wrangler Retail Gas Holdings, LLC, a partnership between Dominion Energy (through March 2022) and Interstate Gas Supply, Inc. |
PART I. FINANCI****AL INFORMATION
Next: Item 1. FINANCIAL STATEMENTS
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