Related-Party Transactions

Virginia Power and Dominion Gas engage in related-party transactions primarily with other Dominion subsidiaries (affiliates). Virginia Power's and Dominion Gas' receivable and payable balances with affiliates are settled based on contractual terms or on a monthly basis, depending on the nature of the underlying transactions. Virginia Power and Dominion Gas are included in Dominion's consolidated federal income tax return. Dominion's transactions with equity method investments are described in Note 10. A discussion of significant related-party transactions follows.

Virginia Power

Transactions with Affiliates

Virginia Power transacts with affiliates for certain quantities of natural gas and other commodities in the ordinary course of business. Virginia Power also enters into certain commodity derivative contracts with affiliates. Virginia Power uses these contracts, which are principally comprised of commodity physical forwards and options, to manage commodity price risks associated with purchases of natural gas. As of March 31, 2016, Virginia Power’s derivative assets and liabilities with affiliates were each $14 million. As of December 31, 2015, Virginia Power’s derivative assets and liabilities with affiliates were $13 million and $22 million, respectively. See Note 9 for more information.

Virginia Power participates in certain Dominion benefit plans described in Note 18. In Virginia Power's Consolidated Balance

Sheets at March 31, 2016 and December 31, 2015, amounts due to Dominion associated with these benefit plans included in other deferred credits and other liabilities were $336 million and $316 million, respectively, and amounts due from Dominion at March 31, 2016 and December 31, 2015 included in other deferred charges and other assets were $87 million and $77 million, respectively.

DRS and other affiliates provide accounting, legal, finance and certain administrative and technical services to Virginia Power. In addition, Virginia Power provides certain services to affiliates, including charges for facilities and equipment usage.

Presented below are Virginia Power's significant transactions with DRS and other affiliates:



	Three Months Ended March 31,
	2016		2015
(millions)
Commodity purchases from affiliates	$	145	$	252
Services provided by affiliates⁽¹⁾	140		110
Services provided to affiliates	5		5


(1)	Includes capitalized expenditures of $39 million and $35 million for the three months ended March 31, 2016 and 2015, respectively.

Virginia Power has borrowed funds from Dominion under short-term borrowing arrangements. Virginia Power had no short-term demand note borrowings from Dominion as of March 31, 2016. There were $376 million in short-term demand note borrowings from Dominion as of December 31, 2015. Virginia Power had no outstanding borrowings under the Dominion money pool for its nonregulated subsidiaries as of March 31, 2016 and December 31, 2015. Interest charges related to Virginia Power's borrowings from Dominion were immaterial for the three months ended March 31, 2016 and 2015.

There were no issuances of Virginia Power's common stock to Dominion for the three months ended March 31, 2016 and 2015.

Dominion Gas

Transactions with Related Parties

Dominion Gas transacts with affiliates for certain quantities of natural gas and other commodities at market prices in the ordinary course of business. Additionally, Dominion Gas provides transportation and storage services to affiliates. Dominion Gas also enters into certain other contracts with affiliates, which are presented separately from contracts involving commodities or services. As of March 31, 2016 and December 31, 2015, all of Dominion Gas' commodity derivatives were with affiliates. See Notes 7 and 9 for more information.

Dominion Gas participates in certain Dominion benefit plans as described in Note 18. In Dominion Gas' Consolidated Balance Sheets at March 31, 2016 and December 31, 2015, amounts due from Dominion associated with these benefit plans included in noncurrent pension and other postretirement benefit assets were $663 million and $652 million, respectively, and amounts due to Dominion at March 31, 2016 and December 31, 2015 included in other deferred credits and other liabilities were $1 million and $2 million, respectively.

DRS and other affiliates provide accounting, legal, finance and certain administrative and technical services to Dominion Gas. Dominion Gas provides certain services to related parties, including technical services. The amounts recognized for these services were as follows:



	Three Months Ended March 31,
	2016		2015
(millions)
Purchases of natural gas and transportation and storage services from affiliates	$	3	$	2
Sales of natural gas and transportation and storage services to affiliates	17		18
Services provided by related parties⁽¹⁾	39		34
Services provided to related parties ⁽²⁾	27		20


(1)	Includes capitalized expenditures of $12 million and $13 million for the three months ended March 31, 2016 and 2015, respectively.


(2)	Amounts primarily attributable to Atlantic Coast Pipeline.

The following table presents affiliated and related-party activity reflected in Dominion Gas' Consolidated Balance Sheets:



	March 31, 2016		December 31, 2015
(millions)
Other receivables ⁽¹⁾	$	8	$	7
Customer receivables from related parties	2		4
Imbalances receivable from affiliates⁽²⁾	3		1
Affiliated notes receivable⁽³⁾	15		14

(1) Represents amounts due from Atlantic Coast Pipeline, a related-party VIE.

(2) Amounts are presented in other current assets in Dominion Gas' Consolidated Balance Sheets.

(3) Amounts are presented in other deferred charges and other assets in Dominion Gas' Consolidated Balance Sheets.

Dominion Gas' borrowings under the intercompany revolving credit agreement with Dominion totaled $40 million and $95 million as of March 31, 2016 and December 31, 2015, respectively. Interest charges related to Dominion Gas' total borrowings from Dominion were immaterial for the three months ended March 31, 2016 and 2015.