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Asset Retirement Obligations
Nov. 18, 2019
Asset Retirement Obligation Disclosure [Abstract]  
Asset Retirement Obligations
NOTE 14. ASSET RETIREMENT OBLIGATIONS
AROs represent obligations that result from laws, statutes, contracts and regulations related to the eventual retirement of certain of the Companies’ long-lived assets. Dominion Energy and Virginia Power’s AROs are primarily associated with the decommissioning of their nuclear generation facilities and ash pond and landfill closures. Dominion Energy Gas’ AROs primarily include plugging and abandonment of gas and oil wells and the interim retirement of natural gas gathering, transmission, distribution and storage pipeline components.
The Companies have also identified, but not recognized, AROs related to the retirement of Dominion Energy and Dominion Energy Gas’ LNG facility and storage wells in their underground natural gas storage network, certain Virginia Power electric transmission and distribution assets located on property with easements, rights of way, franchises and lease agreements, Virginia Power’s hydroelectric generation facilities and the abatement of certain asbestos not expected to be disturbed in Dominion Energy and Virginia Power’s generation facilities. The Companies currently do not have sufficient information to estimate a reasonable range of expected retirement dates for any of these assets since the economic lives of these assets can be extended indefinitely through regular repair and maintenance and they currently have no plans to retire or dispose of any of these assets. As a result, a settlement date is not determinable for these assets and AROs for these assets will not be reflected in the Consolidated Financial Statements until sufficient information becomes available to determine a reasonable estimate of the fair value of the activities to be performed. The Companies continue to monitor operational and strategic developments to identify if sufficient information exists to reasonably estimate a retirement date for these assets. The changes to AROs during 2017 and 2018 were as follows:
 
         
 
                      Amount                      
 
(millions)
 
 
Dominion Energy
 
 
 
AROs at December 31, 2016
  $
                         2,485
 
Obligations incurred during the period
   
37
 
Obligations settled during the period
   
(214
 )
Revisions in estimated cash flows
   
7
 
Accretion
   
117
 
         
AROs at December 31, 2017
(1)
   $
2,432
 
         
Obligations incurred during the period
 
 
20
 
Obligations settled during the period
 
 
(159
)
Revisions in estimated cash flows
(2)
  
 
120
 
Accretion
 
 
119
 
         
AROs at December 31, 2018
(1)
  
$
2,532
 
         
Virginia Power
 
 
 
AROs at December 31, 2016
  $
1,443
 
Obligations incurred during the period
   
11
 
Obligations settled during the period
   
(152
 )
Revisions in estimated cash flows
   
(1
 )
Accretion
   
64
 
         
AROs at December 31, 2017
  $
1,365
 
         
Obligations incurred during the period
 
 
14
 
Obligations settled during the period
 
 
(119
)
Revisions in estimated cash flows
(2)
  
 
120
 
Accretion
 
 
65
 
         
AROs at December 31, 2018
 
$
1,445
 
         
Dominion Energy Gas
 
 
 
AROs at December 31, 2016
  $
83
 
Obligations incurred during the period
   
1
 
Obligations settled during the period
   
(4
 )
Accretion
   
5
 
         
AROs at December 31, 2017
(3)
   $
85
 
         
Obligations incurred during the period
 
 
3
 
Obligations settled during the period
 
 
(6
)
Accretion
 
 
6
 
         
AROs at December 31, 2018
(3)
  
$
88
 
         
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Includes $263 million and $282 million reported in other current liabilities at December 31, 2017, and 2018, respectively.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(2)
Reflects future ash pond and landfill closure costs at certain utility generation facilities. See Note 22 for further information.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3)
Includes $76 million and $74 million reported in other deferred credits and other liabilities, with the remainder recorded in other current liabilities, at December 31, 2017 and 2018, respectively.
 
 
 
 
Dominion Energy and Virginia Power have established trusts dedicated to funding the future decommissioning of their nuclear plants. At December 31, 2018 and 2017, the aggregate fair value of Dominion Energy’s trusts, consisting primarily of equity and debt securities, totaled $4.9 billion and $5.1 billion, respectively. At December 31, 2018 and 2017, the aggregate fair value of Virginia Power’s trusts, consisting primarily of debt and equity securities, totaled $2.4 billion for both periods.