XML 35 R22.htm IDEA: XBRL DOCUMENT v3.24.2.u1
Derivatives and Hedge Accounting Activities
 6 Months Ended
Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedge Accounting Activities

Note 9. Derivatives and Hedge Accounting Activities

The Companies’ accounting policies, objectives and strategies for using derivative instruments and cash collateral or other instruments under master netting or similar arrangements are discussed in Notes 2 and 7 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2023. See Note 8 in this report for additional information about fair value measurements and associated valuation methods for derivatives. See Note 18 for additional information regarding credit-related contingent features for the Companies’ derivative instruments.

Balance Sheet Presentation

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

 

 

 

Dominion Energy Gross Amounts Not Offset in the Consolidated Balance Sheet

 

 

Virginia Power Gross Amounts Not Offset in the Consolidated Balance Sheet

 

 

 

Gross Assets
Presented in the
Consolidated
Balance Sheet(1)

 

 

Financial
Instruments

 

 

Cash
Collateral
Received

 

 

Net
Amounts

 

 

Gross Assets
Presented in the
Consolidated
Balance Sheet(1)

 

 

Financial
Instruments

 

 

Cash
Collateral
Received

 

 

Net
Amounts

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

$

253

 

 

$

41

 

 

$

—

 

 

$

212

 

 

$

160

 

 

$

19

 

 

$

—

 

 

$

141

 

Exchange

 

 

100

 

 

 

95

 

 

 

—

 

 

 

5

 

 

 

4

 

 

 

4

 

 

 

—

 

 

 

—

 

Interest rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

 

998

 

 

 

374

 

 

 

—

 

 

 

624

 

 

 

208

 

 

 

1

 

 

 

—

 

 

 

207

 

Foreign currency exchange rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

 

1

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

1

 

 

 

—

 

 

 

—

 

Total derivatives,
   subject to a
   master netting
   or similar
   arrangement

 

$

1,352

 

 

$

511

 

 

$

—

 

 

$

841

 

 

$

373

 

 

$

25

 

 

$

—

 

 

$

348

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

$

289

 

 

$

26

 

 

$

—

 

 

$

263

 

 

$

112

 

 

$

13

 

 

$

—

 

 

$

99

 

Exchange

 

 

118

 

 

 

33

 

 

 

15

 

 

 

70

 

 

 

4

 

 

 

3

 

 

 

—

 

 

 

1

 

Interest rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

 

800

 

 

 

191

 

 

 

—

 

 

 

609

 

 

 

181

 

 

 

11

 

 

 

—

 

 

 

170

 

Total derivatives,
   subject to a
   master netting
   or similar
   arrangement

 

$

1,207

 

 

$

250

 

 

$

15

 

 

$

942

 

 

$

297

 

 

$

27

 

 

$

—

 

 

$

270

 

 

(1)
Excludes derivative assets of $232 million and $143 million at Dominion Energy and $16 million and $1 million at Virginia Power at June 30, 2024 and December 31, 2023, respectively, which are not subject to master netting or other similar arrangements.

 

 

 

Dominion Energy Gross Amounts Not Offset in the Consolidated Balance Sheet

 

 

Virginia Power Gross Amounts Not Offset in the Consolidated Balance Sheet

 

 

 

Gross Liabilities
Presented in
the Consolidated
Balance Sheet(1)

 

 

Financial
Instruments

 

 

Cash
Collateral
Paid

 

 

Net
Amounts

 

 

Gross Liabilities
Presented in
the Consolidated
Balance Sheet(1)

 

 

Financial
Instruments

 

 

Cash
Collateral
Paid

 

 

Net
Amounts

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

$

92

 

 

$

39

 

 

$

—

 

 

$

53

 

 

$

25

 

 

$

17

 

 

$

—

 

 

$

8

 

Exchange

 

 

95

 

 

 

95

 

 

 

—

 

 

 

—

 

 

 

4

 

 

 

4

 

 

 

—

 

 

 

—

 

Interest rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

 

536

 

 

 

376

 

 

 

—

 

 

 

160

 

 

 

11

 

 

 

3

 

 

 

—

 

 

 

8

 

Foreign currency exchange rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

 

112

 

 

 

1

 

 

 

—

 

 

 

111

 

 

 

112

 

 

 

1

 

 

 

—

 

 

 

111

 

Total derivatives,
   subject to a
   master netting
   or similar
   arrangement

 

$

835

 

 

$

511

 

 

$

—

 

 

$

324

 

 

$

152

 

 

$

25

 

 

$

—

 

 

$

127

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

$

266

 

 

$

26

 

 

$

30

 

 

$

210

 

 

$

153

 

 

$

13

 

 

$

30

 

 

$

110

 

Exchange

 

 

33

 

 

 

33

 

 

 

—

 

 

 

—

 

 

 

3

 

 

 

3

 

 

 

—

 

 

 

—

 

Interest rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

 

359

 

 

 

186

 

 

 

—

 

 

 

173

 

 

 

45

 

 

 

6

 

 

 

—

 

 

 

39

 

Foreign currency exchange rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

 

39

 

 

 

5

 

 

 

—

 

 

 

34

 

 

 

39

 

 

 

5

 

 

 

—

 

 

 

34

 

Total derivatives,
   subject to a
   master netting
   or similar
   arrangement

 

$

697

 

 

$

250

 

 

$

30

 

 

$

417

 

 

$

240

 

 

$

27

 

 

$

30

 

 

$

183

 

 

(1)
Excludes derivative liabilities of $4 million at Dominion Energy at June 30, 2024 and $47 million and $76 million at Virginia Power at June 30, 2024 and December 31, 2023, respectively, which are not subject to master netting or similar arrangements. Dominion Energy did not have any derivative liabilities at December 31, 2023 which were not subject to master netting or similar arrangements.

Volumes

The following table presents the volume of the Companies’ derivative activity at June 30, 2024. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of its long and short positions.

 

 

 

Dominion Energy

 

 

Virginia Power

 

 

 

Current

 

 

Noncurrent

 

 

Current

 

 

Noncurrent

 

Natural Gas (bcf):

 

 

 

 

 

 

 

 

 

 

 

 

Fixed price(1)

 

 

41

 

 

 

10

 

 

 

37

 

 

 

10

 

Basis(2)

 

 

195

 

 

 

329

 

 

 

163

 

 

 

329

 

Electricity (MWh in millions):

 

 

 

 

 

 

 

 

 

 

 

 

Fixed price

 

 

18

 

 

 

38

 

 

 

8

 

 

 

4

 

FTRs

 

 

100

 

 

 

 

 

 

100

 

 

 

 

Interest rate(3) (in millions)

 

$

3,862

 

 

$

10,112

 

 

$

1,200

 

 

$

1,050

 

Foreign currency exchange rate(3) (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

Danish Krone

 

1,486 kr.

 

 

1,983 kr.

 

 

1,486 kr.

 

 

1,983 kr.

 

Euro

 

€861

 

 

€832

 

 

€861

 

 

€832

 
(1)
Includes options at Dominion Energy.
(2)
Includes options.
(3)
Maturity is determined based on final settlement period.

AOCI

The following table presents selected information related to gains (losses) on cash flow hedges included in AOCI in the Companies’ Consolidated Balance Sheets at June 30, 2024:

 

 

 

Dominion Energy

 

Virginia Power

 

 

AOCI After-Tax

 

 

Amounts Expected to be
Reclassified to Earnings
During the Next 12 Months
After-Tax

 

 

Maximum Term

 

AOCI After-Tax

 

 

Amounts Expected to be
Reclassified to Earnings
During the Next 12 Months
After-Tax

 

 

Maximum Term

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

$

(191

)

 

$

(30

)

 

378 months

 

$

24

 

 

$

—

 

 

378 months

Total

 

$

(191

)

 

$

(30

)

 

 

 

$

24

 

 

$

—

 

 

 

 

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

Fair Value and Gains and Losses on Derivative Instruments

The following table presents the fair values of the Companies’ derivatives and where they are presented in their Consolidated Balance Sheets:

 

 

 

Dominion Energy

 

 

Virginia Power

 

 

 

Fair Value –
Derivatives
under Hedge
Accounting

 

 

Fair Value –
Derivatives
not under
Hedge
Accounting

 

 

Total Fair
Value

 

 

Fair Value –
Derivatives
under Hedge
Accounting

 

 

Fair Value –
Derivatives
not under
Hedge
Accounting

 

 

Total Fair
Value

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

288

 

 

$

288

 

 

$

—

 

 

$

166

 

 

$

166

 

Interest rate

 

 

109

 

 

 

352

 

 

 

461

 

 

 

109

 

 

 

—

 

 

 

109

 

Total current derivative assets(1)

 

 

109

 

 

 

640

 

 

 

749

 

 

 

109

 

 

 

166

 

 

 

275

 

Noncurrent Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

—

 

 

 

297

 

 

 

297

 

 

 

—

 

 

 

14

 

 

 

14

 

Interest rate

 

 

99

 

 

 

438

 

 

 

537

 

 

 

99

 

 

 

—

 

 

 

99

 

Foreign currency
   exchange rate

 

 

—

 

 

 

1

 

 

 

1

 

 

 

—

 

 

 

1

 

 

 

1

 

Total noncurrent derivative assets(2)

 

 

99

 

 

 

736

 

 

 

835

 

 

 

99

 

 

 

15

 

 

 

114

 

Total derivative assets

 

$

208

 

 

$

1,376

 

 

$

1,584

 

 

$

208

 

 

$

181

 

 

$

389

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

123

 

 

$

123

 

 

$

—

 

 

$

61

 

 

$

61

 

Interest rate

 

 

11

 

 

 

132

 

 

 

143

 

 

 

11

 

 

 

—

 

 

 

11

 

Foreign currency exchange rate

 

 

—

 

 

 

52

 

 

 

52

 

 

 

—

 

 

 

52

 

 

 

52

 

Total current derivative liabilities(3)

 

 

11

 

 

 

307

 

 

 

318

 

 

 

11

 

 

 

113

 

 

 

124

 

Noncurrent Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

—

 

 

 

68

 

 

 

68

 

 

 

—

 

 

 

15

 

 

 

15

 

Interest rate

 

 

—

 

 

 

393

 

 

 

393

 

 

 

—

 

 

 

—

 

 

 

—

 

Foreign currency exchange rate

 

 

—

 

 

 

60

 

 

 

60

 

 

 

—

 

 

 

60

 

 

 

60

 

Total noncurrent derivative liabilities(4)

 

 

—

 

 

 

521

 

 

 

521

 

 

 

—

 

 

 

75

 

 

 

75

 

Total derivative liabilities

 

$

11

 

 

$

828

 

 

$

839

 

 

$

11

 

 

$

188

 

 

$

199

 

December 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

312

 

 

$

312

 

 

$

—

 

 

$

91

 

 

$

91

 

Interest rate

 

 

143

 

 

 

298

 

 

 

441

 

 

 

143

 

 

 

—

 

 

 

143

 

Total current derivative assets(1)

 

 

143

 

 

 

610

 

 

 

753

 

 

 

143

 

 

 

91

 

 

 

234

 

Noncurrent Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

—

 

 

 

238

 

 

 

238

 

 

 

—

 

 

 

26

 

 

 

26

 

Interest rate

 

 

38

 

 

 

321

 

 

 

359

 

 

 

38

 

 

 

—

 

 

 

38

 

Total noncurrent derivative assets(2)

 

 

38

 

 

 

559

 

 

 

597

 

 

 

38

 

 

 

26

 

 

 

64

 

Total derivative assets

 

$

181

 

 

$

1,169

 

 

$

1,350

 

 

$

181

 

 

$

117

 

 

$

298

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

$

—

 

 

$

244

 

 

$

244

 

 

$

—

 

 

$

188

 

 

$

188

 

Interest rate

 

 

45

 

 

 

76

 

 

 

121

 

 

 

45

 

 

 

—

 

 

 

45

 

Foreign currency exchange rate

 

 

—

 

 

 

11

 

 

 

11

 

 

 

—

 

 

 

11

 

 

 

11

 

Total current derivative liabilities(3)

 

 

45

 

 

 

331

 

 

 

376

 

 

 

45

 

 

 

199

 

 

 

244

 

Noncurrent Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity

 

 

—

 

 

 

55

 

 

 

55

 

 

 

—

 

 

 

44

 

 

 

44

 

Interest rate

 

 

—

 

 

 

238

 

 

 

238

 

 

 

—

 

 

 

—

 

 

 

—

 

Foreign currency exchange rate

 

 

—

 

 

 

28

 

 

 

28

 

 

 

—

 

 

 

28

 

 

 

28

 

Total noncurrent derivative liabilities(4)

 

 

—

 

 

 

321

 

 

 

321

 

 

 

—

 

 

 

72

 

 

 

72

 

Total derivative liabilities

 

$

45

 

 

$

652

 

 

$

697

 

 

$

45

 

 

$

271

 

 

$

316

 
(1)
Includes $21 million and $54 million recorded in current assets held for sale in Dominion Energy’s Consolidated Balance Sheets at June 30, 2024 and December 31, 2023, respectively, with the remaining current derivative assets presented in other current assets in the Companies’ Consolidated Balance Sheets.
(2)
Noncurrent derivative assets are presented in other deferred charges and other assets in the Companies’ Consolidated Balance Sheets.
(3)
Includes less than $1 million and $30 million recorded in current liabilities held for sale in Dominion Energy’s Consolidated Balance Sheets at June 30, 2024 and December 31, 2023, respectively.
(4)
Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in the Companies’ Consolidated Balance Sheets.

The following tables present the gains and losses on the Companies’ derivatives, as well as where the associated activity is presented in their Consolidated Balance Sheets and Statements of Income.

 

 

 

Dominion Energy

 

 

Virginia Power

 

Derivatives in cash flow
   hedging relationships

 

Amount of Gain
(Loss)
Recognized
in AOCI on
Derivatives(1)

 

 

Amount of Gain
(Loss)
Reclassified
from AOCI
to Income

 

 

Increase (Decrease)
in Derivatives
Subject to
Regulatory
Treatment(2)

 

 

Amount of Gain
(Loss)
Recognized
in AOCI on
Derivatives(1)

 

 

Amount of Gain
(Loss)
Reclassified
from AOCI
to Income

 

 

Increase (Decrease)
in Derivatives
Subject to
Regulatory
Treatment(2)

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative type and location of gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate(3)

 

$

4

 

 

$

(11

)

 

$

42

 

 

$

4

 

 

$

—

 

 

$

41

 

Total

 

$

4

 

 

$

(11

)

 

$

42

 

 

$

4

 

 

$

—

 

 

$

41

 

Three Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative type and location of gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate(3)

 

$

8

 

 

 

(10

)

 

$

88

 

 

$

8

 

 

$

—

 

 

$

88

 

Total

 

$

8

 

 

$

(10

)

 

$

88

 

 

$

8

 

 

$

—

 

 

$

88

 

Six Months Ended June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative type and location of gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate(3)

 

$

12

 

 

$

(22

)

 

$

130

 

 

$

12

 

 

$

—

 

 

$

129

 

Total

 

$

12

 

 

$

(22

)

 

$

130

 

 

$

12

 

 

$

—

 

 

$

129

 

Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative type and location of gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate(3)

 

$

(4

)

 

$

(21

)

 

$

(32

)

 

$

(4

)

 

$

—

 

 

$

(32

)

Total

 

$

(4

)

 

$

(21

)

 

$

(32

)

 

$

(4

)

 

$

—

 

 

$

(32

)

 

(1)
Amounts deferred into AOCI have no associated effect in the Companies’ Consolidated Statements of Income.
(2)
Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in the Companies’ Consolidated Statements of Income.
(3)
Amounts recorded in the Companies’ Consolidated Statements of Income are classified in interest and related charges.

 

 

 

Amount of Gain (Loss) Recognized in Income on Derivatives(1)(2)

 

Derivatives not designated as hedging instruments

 

Dominion Energy

 

 

Virginia Power

 

 

 

Quarter-to-Date

 

 

Year-to-Date

 

 

Quarter-to-Date

 

 

Year-to-Date

 

Period Ended June 30,

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative type and location of gains (losses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commodity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenue

 

$

(15

)

 

$

26

 

 

$

61

 

 

$

421

 

 

$

35

 

 

$

10

 

 

$

76

 

 

$

19

 

Electric fuel and other energy-related
    purchases

 

 

(42

)

 

 

(73

)

 

 

(190

)

 

 

(118

)

 

 

(41

)

 

 

(73

)

 

 

(187

)

 

 

(119

)

Operations and maintenance

 

 

—

 

 

 

2

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

2

 

Discontinued operations

 

 

(1

)

 

 

—

 

 

 

(25

)

 

 

94

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and related charges

 

 

(13

)

 

 

29

 

 

 

(91

)

 

 

(47

)

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

—

 

 

 

50

 

 

 

—

 

 

 

24

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

(71

)

 

$

34

 

 

$

(245

)

 

$

376

 

 

$

(6

)

 

$

(61

)

 

$

(111

)

 

$

(98

)

 

(1)
Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in the Companies’ Consolidated Statements of Income.
(2)
Excludes amounts related to foreign currency exchange rate derivatives that are deferred to plant under construction within property, plant and equipment and regulatory assets/liabilities that will begin to amortize once the CVOW Commercial Project is placed in service.