Income Taxes (Tables)
|
12 Months Ended |
Dec. 31, 2017 |
Income Tax Disclosure [Abstract] |
|
Income tax expense for continuing operations including noncontrolling interests |
Details of income tax expense for continuing operations including
noncontrolling interests were as follows:
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Dominion
Energy |
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Virginia
Power |
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|
Dominion Energy
Gas |
|
Year Ended December 31, |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|
2017 |
|
|
2016 |
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2015 |
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2017 |
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2016 |
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2015 |
|
(millions) |
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Current:
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Federal
|
|
$ |
(1 |
) |
|
$ |
(155 |
) |
|
$ |
(24 |
) |
|
$ |
432 |
|
|
$ |
168 |
|
|
$ |
316 |
|
|
$ |
16 |
|
|
$ |
(27 |
) |
|
$ |
90 |
|
State
|
|
|
(26 |
) |
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|
85 |
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|
75 |
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|
73 |
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|
90 |
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|
92 |
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|
8 |
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|
4 |
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|
30 |
|
Total current expense (benefit)
|
|
|
(27 |
) |
|
|
(70 |
) |
|
|
51 |
|
|
|
505 |
|
|
|
258 |
|
|
|
408 |
|
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|
24 |
|
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|
(23 |
) |
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|
120 |
|
Deferred:
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Federal
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2017 Tax Reform Act impact
|
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|
(851 |
) |
|
|
— |
|
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|
— |
|
|
|
(93 |
) |
|
|
— |
|
|
|
— |
|
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|
(197 |
) |
|
|
— |
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|
|
— |
|
Taxes before operating loss carryforwards and investment tax
credits
|
|
|
739 |
|
|
|
1,050 |
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|
|
384 |
|
|
|
319 |
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|
435 |
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|
154 |
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|
199 |
|
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|
239 |
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|
156 |
|
Tax utilization expense (benefit) of operating loss
carryforwards
|
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|
174 |
|
|
|
(161 |
) |
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|
539 |
|
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|
4 |
|
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|
(2 |
) |
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|
96 |
|
|
|
5 |
|
|
|
(2 |
) |
|
|
6 |
|
Investment tax credits
|
|
|
(200 |
) |
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|
(248 |
) |
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|
(134 |
) |
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|
(23 |
) |
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|
(25 |
) |
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|
(11 |
) |
|
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— |
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— |
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— |
|
State
|
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|
132 |
|
|
|
50 |
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|
66 |
|
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|
59 |
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|
27 |
|
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|
13 |
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20 |
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|
1 |
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|
1 |
|
Total deferred expense (benefit)
|
|
|
(6 |
) |
|
|
691 |
|
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|
855 |
|
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|
266 |
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|
435 |
|
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|
252 |
|
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|
27 |
|
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|
238 |
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|
163 |
|
Investment tax credit-gross deferral
|
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|
5 |
|
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|
35 |
|
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— |
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5 |
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|
35 |
|
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— |
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|
— |
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|
— |
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|
|
— |
|
Investment tax credit-amortization
|
|
|
(2 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
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|
(2 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
— |
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|
|
— |
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|
|
— |
|
Total income tax expense (benefit)
|
|
$ |
(30 |
) |
|
$ |
655 |
|
|
$ |
905 |
|
|
$ |
774 |
|
|
$ |
727 |
|
|
$ |
659 |
|
|
$ |
51 |
|
|
$ |
215 |
|
|
$ |
283 |
|
|
Effective Income Tax |
For continuing operations including noncontrolling interests, the
statutory U.S. federal income tax rate reconciles to the
Companies’ effective income tax rate as follows:
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Dominion
Energy |
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|
Virginia
Power |
|
|
Dominion Energy
Gas |
|
Year Ended December 31, |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|
2017 |
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|
2016 |
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|
2015 |
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|
2017 |
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|
2016 |
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|
2015 |
|
U.S. statutory rate
|
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|
35.0 |
% |
|
|
35.0 |
% |
|
|
35.0 |
% |
|
|
35.0 |
% |
|
|
35.0 |
% |
|
|
35.0 |
% |
|
|
35.0 |
% |
|
|
35.0 |
% |
|
|
35.0 |
% |
Increases (reductions) resulting from:
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State taxes, net of federal benefit
|
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|
2.0 |
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|
2.4 |
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|
3.7 |
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|
3.7 |
|
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3.8 |
|
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|
3.9 |
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|
2.4 |
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|
0.5 |
|
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|
2.7 |
|
Investment tax credits
|
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|
(6.3 |
) |
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|
(11.7 |
) |
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|
(4.7 |
) |
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|
(0.8 |
) |
|
|
— |
|
|
|
(0.6 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Production tax credits
|
|
|
(0.7 |
) |
|
|
(0.8 |
) |
|
|
(0.8 |
) |
|
|
(0.4 |
) |
|
|
(0.5 |
) |
|
|
(0.6 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Valuation allowances
|
|
|
0.2 |
|
|
|
1.2 |
|
|
|
(0.3 |
) |
|
|
— |
|
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|
0.1 |
|
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|
— |
|
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|
0.3 |
|
|
|
— |
|
|
|
— |
|
Federal legislative change
|
|
|
(27.5 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4.0 |
) |
|
|
— |
|
|
|
— |
|
|
|
(29.5 |
) |
|
|
— |
|
|
|
— |
|
State legislative change
|
|
|
— |
|
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|
(0.6 |
) |
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|
(0.1 |
) |
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|
— |
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|
— |
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|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
AFUDC—equity
|
|
|
(1.4 |
) |
|
|
(0.6 |
) |
|
|
(0.3 |
) |
|
|
(0.6 |
) |
|
|
(0.6 |
) |
|
|
(0.6 |
) |
|
|
(0.9 |
) |
|
|
(0.2 |
) |
|
|
0.2 |
|
Employee stock ownership plan deduction
|
|
|
(0.6 |
) |
|
|
(0.6 |
) |
|
|
(0.6 |
) |
|
|
— |
|
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|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Other, net
|
|
|
(1.7 |
) |
|
|
(1.4 |
) |
|
|
0.1 |
|
|
|
0.6 |
|
|
|
(0.4 |
) |
|
|
0.6 |
|
|
|
0.4 |
|
|
|
0.1 |
|
|
|
0.3 |
|
Effective tax rate
|
|
|
(1.0 |
)% |
|
|
22.9 |
% |
|
|
32.0 |
% |
|
|
33.5 |
% |
|
|
37.4 |
% |
|
|
37.7 |
% |
|
|
7.7 |
% |
|
|
35.4 |
% |
|
|
38.2 |
% |
|
Deferred income taxes components |
The Companies’ deferred income taxes consist of the
following:
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|
Dominion Energy |
|
|
Virginia
Power |
|
|
Dominion Energy
Gas |
|
At
December 31, |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income
taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred income tax
assets
|
|
$ |
2,686 |
|
|
$ |
1,827 |
|
|
$ |
923 |
|
|
|
$ 268 |
|
|
|
$ 320 |
|
|
$ |
126 |
|
Total deferred income tax
liabilities
|
|
|
7,158 |
|
|
|
10,381 |
|
|
|
3,600 |
|
|
|
5,323 |
|
|
|
1,774 |
|
|
|
2,564 |
|
Total net deferred income tax
liabilities
|
|
$ |
4,472 |
|
|
$ |
8,554 |
|
|
$ |
2,677 |
|
|
|
$5,055 |
|
|
|
$1,454 |
|
|
$ |
2,438 |
|
Total deferred income
taxes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant and equipment, primarily
depreciation method and basis differences
|
|
$ |
5,056 |
|
|
$ |
7,782 |
|
|
$ |
2,969 |
|
|
|
$4,604 |
|
|
|
$1,132 |
|
|
$ |
1,726 |
|
Excess deferred income
taxes
|
|
|
(1,050 |
) |
|
|
— |
|
|
|
(687 |
) |
|
|
— |
|
|
|
(244 |
) |
|
|
— |
|
Nuclear decommissioning
|
|
|
829 |
|
|
|
1,240 |
|
|
|
260 |
|
|
|
406 |
|
|
|
— |
|
|
|
— |
|
Deferred state income taxes
|
|
|
834 |
|
|
|
747 |
|
|
|
378 |
|
|
|
321 |
|
|
|
227 |
|
|
|
204 |
|
Federal benefit of deferred state
income taxes
|
|
|
(175 |
) |
|
|
(261 |
) |
|
|
(79 |
) |
|
|
(112 |
) |
|
|
(48 |
) |
|
|
(71 |
) |
Deferred fuel, purchased energy and
gas costs
|
|
|
1 |
|
|
|
(25 |
) |
|
|
(3 |
) |
|
|
(29 |
) |
|
|
2 |
|
|
|
4 |
|
Pension benefits
|
|
|
141 |
|
|
|
155 |
|
|
|
(104 |
) |
|
|
(138 |
) |
|
|
419 |
|
|
|
646 |
|
Other postretirement
benefits
|
|
|
(51 |
) |
|
|
(68 |
) |
|
|
44 |
|
|
|
49 |
|
|
|
(2 |
) |
|
|
(6 |
) |
Loss and credit
carryforwards
|
|
|
(1,536 |
) |
|
|
(1,547 |
) |
|
|
(111 |
) |
|
|
(88 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
Valuation allowances
|
|
|
146 |
|
|
|
135 |
|
|
|
5 |
|
|
|
3 |
|
|
|
3 |
|
|
|
— |
|
Partnership basis
differences
|
|
|
473 |
|
|
|
688 |
|
|
|
— |
|
|
|
— |
|
|
|
26 |
|
|
|
43 |
|
Other
|
|
|
(196 |
) |
|
|
(292 |
) |
|
|
5 |
|
|
|
39 |
|
|
|
(57 |
) |
|
|
(103 |
) |
Total net deferred income tax
liabilities
|
|
$ |
4,472 |
|
|
$ |
8,554 |
|
|
$ |
2,677 |
|
|
|
$5,055 |
|
|
|
$1,454 |
|
|
$ |
2,438 |
|
Deferred Investment Tax Credits
– Regulated Operations
|
|
|
51 |
|
|
|
48 |
|
|
|
51 |
|
|
|
48 |
|
|
|
— |
|
|
|
— |
|
Total Deferred Taxes and Deferred
Investment Tax Credits
|
|
$ |
4,523 |
|
|
$ |
8,602 |
|
|
$ |
2,728 |
|
|
|
$5,103 |
|
|
|
$1,454 |
|
|
$ |
2,438 |
|
|
Summary of deductible loss and credit carryforwards |
At December 31, 2017, Dominion Energy had the following
deductible loss and credit carryforwards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deductible
Amount
|
|
|
Deferred
Tax Asset
|
|
|
Valuation
Allowance |
|
|
Expiration
Period
|
|
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Federal losses
|
|
|
$ 560 |
|
|
|
$ 118 |
|
|
|
$ — |
|
|
|
2034 |
|
Federal investment credits
|
|
|
— |
|
|
|
938 |
|
|
|
— |
|
|
|
2033-2037 |
|
Federal production credits
|
|
|
— |
|
|
|
129 |
|
|
|
— |
|
|
|
2031-2037 |
|
Other federal credits
|
|
|
— |
|
|
|
58 |
|
|
|
— |
|
|
|
2031-2037 |
|
State losses
|
|
|
1,366 |
|
|
|
103 |
|
|
|
(63 |
) |
|
|
2018-2037 |
|
State minimum tax credits
|
|
|
— |
|
|
|
90 |
|
|
|
— |
|
|
|
No expiration |
|
State investment and other credits
|
|
|
— |
|
|
|
100 |
|
|
|
(83 |
) |
|
|
2018-2027 |
|
Total
|
|
|
$1,926 |
|
|
|
$1,536 |
|
|
|
$(146 |
) |
|
|
|
|
At December 31, 2017, Virginia Power had the following
deductible loss and credit carryforwards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deductible
Amount
|
|
|
Deferred
Tax Asset
|
|
|
Valuation
Allowance
|
|
|
Expiration
Period |
|
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Federal losses
|
|
|
$ 1 |
|
|
|
$ — |
|
|
|
$— |
|
|
|
2034 |
|
Federal investment credits
|
|
|
— |
|
|
|
51 |
|
|
|
— |
|
|
|
2034-2037 |
|
Federal production and other credits
|
|
|
— |
|
|
|
51 |
|
|
|
— |
|
|
|
2031-2037 |
|
State investment credits
|
|
|
— |
|
|
|
9 |
|
|
|
(5 |
) |
|
|
2024 |
|
Total
|
|
|
$ 1 |
|
|
|
$111 |
|
|
|
$(5 |
) |
|
|
|
|
At December 31, 2017, Dominion Energy Gas had the following
deductible loss and credit carryforwards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deductible
Amount
|
|
|
Deferred
Tax Asset
|
|
|
Valuation
Allowance
|
|
|
Expiration
Period
|
|
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
Other federal credits
|
|
|
$ — |
|
|
|
$1 |
|
|
|
$ — |
|
|
|
2032-2036 |
|
State losses
|
|
|
33 |
|
|
|
3 |
|
|
|
(3 |
) |
|
|
2036-2037 |
|
Total
|
|
|
$33 |
|
|
|
$4 |
|
|
|
$ (3 |
) |
|
|
|
|
|
Reconciliation of changes in unrecognized tax benefits |
A reconciliation of changes in the Companies’ unrecognized
tax benefits follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dominion
Energy |
|
|
Virginia
Power |
|
|
Dominion Energy
Gas |
|
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
(millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1
|
|
$ |
64 |
|
|
$ |
103 |
|
|
$ |
145 |
|
|
$ |
13 |
|
|
$ |
12 |
|
|
$ |
36 |
|
|
|
$ 7 |
|
|
$ |
29 |
|
|
|
$29 |
|
Increases-prior period positions
|
|
|
1 |
|
|
|
9 |
|
|
|
2 |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
Decreases-prior period positions
|
|
|
(9 |
) |
|
|
(44 |
) |
|
|
(40 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
(25 |
) |
|
|
— |
|
|
|
(19 |
) |
|
|
— |
|
Increases-current period positions
|
|
|
5 |
|
|
|
6 |
|
|
|
8 |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Settlements with tax authorities
|
|
|
(23 |
) |
|
|
(8 |
) |
|
|
(5 |
) |
|
|
(8 |
) |
|
|
— |
|
|
|
— |
|
|
|
(7 |
) |
|
|
(4 |
) |
|
|
— |
|
Expiration of statutes of limitations
|
|
|
— |
|
|
|
(2 |
) |
|
|
(7 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Balance at December 31
|
|
$ |
38 |
|
|
$ |
64 |
|
|
$ |
103 |
|
|
$ |
4 |
|
|
$ |
13 |
|
|
$ |
12 |
|
|
|
$— |
|
|
$ |
7 |
|
|
|
$29 |
|
|
Earliest tax year remaining |
For each of the major states in which Dominion Energy operates, the
earliest tax year remaining open for examination is as follows:
|
|
|
|
|
State |
|
Earliest
Open Tax
Year
|
|
Pennsylvania(1)
|
|
|
2012 |
|
Connecticut
|
|
|
2014 |
|
Virginia(2)
|
|
|
2014 |
|
West Virginia(1)
|
|
|
2014 |
|
New York(1)
|
|
|
2011 |
|
Utah
|
|
|
2014 |
|
(1) |
Considered a major state for
Dominion Energy Gas’ operations. |
(2) |
Considered a major state for
Virginia Power’s operations. |
|