XML 157 R44.htm IDEA: XBRL DOCUMENT v3.19.3
Fair Value Measurements (Tables)
Nov. 18, 2019
Fair Value Inputs, Assets, Quantitative Information
The following table presents Dominion Energy’s quantitative information about Level 3 fair value measurements at December 31, 2018. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.
 
    Fair Value    
(millions)
 
 
Valuation Techniques
 
Unobservable Input
 
Range
 
 
Weighted
    Average
(1)
    
 
Assets
 
 
 
 
 
 
 
 
 
 
 
Physical and financial forwards and futures:
 
 
 
 
 
 
 
 
 
 
 
Natural gas
(2)
 
$
42
 
 
Discounted cash flow
 
Market price (per Dth)
(3)
 
 
(2) - 8
 
 
 
(1)
 
FTRs
 
 
15
 
 
Discounted cash flow
 
Market price (per MWh)
(3)
 
 
(2) - 7
 
 
 
1
 
Physical options:
 
 
 
 
 
 
 
 
 
 
 
Natural gas
 
 
2
 
 
Option model
 
Market price (per Dth)
(3)
 
 
1 - 8
 
 
 
3
 
 
 
 
 
 
Price volatility
(4)
 
 
18%
 -
 73%
 
 
 
30
%
Electricity
 
 
11
 
 
Option model
 
Market price (per MWh)
(3)
 
 
34 - 50
 
 
 
42
 
 
 
 
 
 
Price volatility
(4)
 
 
39% - 60%
 
 
 
49
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
 
$
70
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
Financial forwards:
 
 
 
 
 
 
 
 
 
 
 
FTRs
 
$
6
 
 
Discounted cash flow
 
Market price (per MWh)
(3)
 
 
(2) - 6
 
 
 
—
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities
 
$
6
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Averages weighted by volume.
(2)
Includes basis.
(3)
Represents market prices beyond defined terms for Levels 1 and 2.
(4)
Represents volatilities unrepresented in published markets.
Fair Value, Option, Qualitative Disclosures
Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:
Significant Unobservable Inputs
 
        Position        
  
Change to Input
 
Impact on Fair
        Value Measurement        
Market price
 
Buy
 
Increase (decrease)
 
Gain (loss)
Market price
 
Sell
 
Increase (decrease)
 
Loss (gain)
Price volatility
 
Buy
 
Increase (decrease)
 
Gain (loss)
Price volatility
 
Sell
 
Increase (decrease)
 
Loss (gain)
Fair Value, by Balance Sheet Grouping
The following table presents Dominion Energy’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:
 
        Level 1        
    
        Level 2        
    
        Level 3        
    
        Total        
  
(millions)
 
   
   
   
 
December 31, 2018
 
 
 
  
 
 
  
 
 
  
 
 
Assets
 
 
 
  
 
 
  
 
 
  
 
 
Derivatives:
   
     
     
     
 
Commodity
 
$
—
 
  
$
180
 
  
$
70
 
  
$
250
 
Interest rate
 
 
—
 
  
 
18
 
  
 
—
 
  
 
18
 
Foreign currency
 
 
—
 
  
 
26
 
  
 
—
 
  
 
26
 
Investments
(1)
:
   
     
     
     
 
Equity securities:
   
     
     
     
 
U.S.
 
 
3,277
 
  
 
—
 
  
 
—
 
  
 
3,277
 
Fixed income:
   
     
     
     
 
Corporate debt instruments
 
 
—
 
  
 
431
 
  
 
—
 
  
 
431
 
Government securities
 
 
455
 
  
 
688
 
  
 
—
 
  
 
1,143
 
Cash equivalents and other
 
 
11
 
  
 
—
 
  
 
—
 
  
 
11
 
 
                                
Total assets
 
$
3,743
 
  
$
1,343
 
  
$
70
 
  
$
5,156
 
                                 
Liabilities
 
 
 
  
 
 
  
 
 
  
 
 
Derivatives:
   
     
     
     
 
Commodity
 
$
—
 
  
$
129
 
  
$
6
 
  
$
135
 
Interest rate
 
 
—
 
  
 
142
 
  
 
—
 
  
 
142
 
Foreign currency
 
 
—
 
  
 
2
 
  
 
—
 
  
 
2
 
 
                                
Total liabilities
 
$
—
 
  
$
273
 
  
$
6
 
  
$
279
 
                                 
December 31, 2017
 
 
 
  
 
 
  
 
 
  
 
 
Assets
 
 
 
  
 
 
  
 
 
  
 
 
Derivatives:
   
     
     
     
 
Commodity
  $
—
    $
101
    $
157
    $
258
 
Interest rate
   
—
     
17
     
—
     
17
 
Foreign currency
   
—
     
32
     
—
     
32
 
Investments
(1)
:
   
     
     
     
 
Equity securities:
   
     
     
     
 
U.S.
   
3,493
     
—
     
—
     
3,493
 
Fixed income:
   
     
     
     
 
Corporate debt instruments
   
—
     
444
     
—
     
444
 
Government securities
   
307
     
794
     
—
     
1,101
 
Cash equivalents and other
   
34
     
—
     
—
     
34
 
 
                                
Total assets
  $
3,834
    $
1,388
    $
157
    $
5,379
 
                                 
Liabilities
 
 
 
  
 
 
  
 
 
  
 
 
Derivatives:
   
     
     
     
 
Commodity
  $
—
    $
190
    $
7
    $
197
 
Interest rate
   
—
     
85
     
—
     
85
 
Foreign currency
   
—
     
2
     
—
     
2
 
 
                                
Total liabilities
  $
—
    $
277
    $
7
    $
284
 
                                 
 
(1)
Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes $
220
million and $
88
million of assets at December 31, 2018 and 2017, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation
The following table presents the net change in Dominion Energy’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:
 
            2018            
 
  
            2017            
    
            2016            
  
(millions)
 
   
   
 
Balance at January 1,
 
$
150
 
   $
139
    $
95
 
Total realized and unrealized gains (losses):
 
 
 
    
     
 
Included in earnings:
 
 
 
    
     
 
Operating Revenue
 
 
(2
)
   
3
     
—
 
Electric fuel and other energy-related purchases
 
 
(15
)
   
(42
 )    
(35
 )
Purchased gas
 
 
—
 
    
1
     
—
 
Included in other comprehensive income (loss)
 
 
1
 
    
(2
 )    
—
 
Included in regulatory assets/liabilities
 
 
(44
)
   
42
     
(39
 )
Settlements
 
 
(27
)
   
6
     
38
 
Purchases
 
 
—
 
    
—
     
87
 
Transfers out of Level 3
 
 
1
 
    
3
     
(7
 )
                         
Balance at December 31,
 
$
64
 
   $
150
    $
139
 
                         
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at the reporting date:
 
 
 
    
     
 
Operating Revenue
 
$
—
 
   $
2
    $
—
 
Electric fuel and other energy-related purchases
 
 
—
 
    
—
     
(1
 )
                         
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments For the Companies’ financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:
December 31,
 
2018
   
2017
 
  
Carrying
        Amount        
 
  
Estimated
        Fair Value
(1)
        
 
  
Carrying         Amount        
    
Estimated Fair
Value
(1)
  
(millions)
 
 
  
 
  
 
  
 
Dominion Energy
 
 
 
  
 
 
  
 
 
  
 
 
Long-term debt, including securities due within one year
(2)
  
$
29,952
 
  
$
31,045
 
   $
28,666
    $
31,233
 
Credit facility borrowings
 
 
73
 
  
 
73
 
    
—
     
—
 
Junior subordinated notes
(3)
  
 
3,430
 
  
 
3,358
 
    
3,981
     
4,102
 
Remarketable subordinated notes
(3)
  
 
1,386
 
  
 
1,340
 
    
1,379
     
1,446
 
                                 
Virginia Power
 
 
 
  
 
 
  
 
 
  
 
 
Long-term debt, including securities due within one year
(3)
  
$
11,671
 
  
$
12,400
 
   $
11,346
    $
12,842
 
                                 
Dominion Energy Gas
 
 
 
  
 
 
  
 
 
  
 
 
Long-term debt, including securities due within one year
(4)
  
$
7,770
 
  
$
7,803
 
   $
4,300
    $
4,480
 
Credit facility borrowings
 
 
73
 
  
 
73
 
    
—
     
—
 
                                 
(1)
Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issuances with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value.
(2)
Carrying amount includes amounts which represent, the unamortized debt issuance costs, discount or premium, and foreign currency remeasurement adjustments. At December 31, 2018, and 2017, includes the valuation of certain fair value hedges associated with Dominion Energy’s fixed rate debt of $(
20
) million and
$(
22
) million, respectively.
(3)
Carrying amount includes amounts which represent the unamortized debt issuance costs, discount or premium.
(4)
Carrying amount includes amounts which represent the unamortized debt issuance costs, discount or premium, and foreign currency remeasurement adjustments.
Virginia Electric and Power Company  
Fair Value Inputs, Assets, Quantitative Information
The following table presents Virginia Power’s quantitative information about Level 3 fair value measurements at December 31, 2018. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.
 
    Fair Value    
(millions)
   
    Valuation Techniques    
  
        Unobservable Input        
  
            Range            
    
        Weighted        
Average
(1)
  
Assets
 
 
 
  
 
 
 
 
  
 
 
Physical and financial forwards and futures:
   
   
 
   
     
 
Natural gas
(2)
   $
38
   
Discounted cash flow
 
Market price (per Dth)
(3)
    
(2)
 -
 8
      
(1
 )
FTRs
   
15
   
Discounted cash flow
 
Market price (per MWh)
(3)
    
(2)
 -
 7
      
1
 
Physical options:
   
   
 
   
     
 
Natural gas
   
2
   
Option model
 
Market price (per Dth)
(3)
    
1
 -
 8
      
3
 
  
 
 
  
 
Price volatility
(4)
    
18%
 -
 73%
      
30
 %
Electricity
   
11
   
Option model
 
Market price (per MWh)
(3)
    
34
 -
 50
      
42
 
  
 
 
  
 
Price volatility
(4)
    
39%
 -
 60%
      
49
 %
 
                                
Total assets
  $
66
   
 
   
     
 
                                 
Liabilities
 
 
 
  
 
   
     
 
Financial forwards:
   
   
 
   
     
 
FTRs
  $
6
   
Discounted cash flow
 
Market price (per MWh)
(3)
    
(2) - 6
     
—
 
 
                                
Total liabilities
  $
6
   
 
   
     
 
                                 
(1)
Averages weighted by volume.
(2)
Includes basis.
(3)
Represents market prices beyond defined terms for Levels 1 and 2.
(4)
Represents volatilities unrepresented in published markets.
Fair Value, Option, Qualitative Disclosures
Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:
 
             
Significant Unobservable Inputs
 
            Position            
 
Change to Input
 
Impact on Fair
        Value Measurement        
Market price
 
Buy
 
Increase (decrease)            
 
Gain (loss)
Market price
 
Sell
 
Increase (decrease)
 
Loss (gain)
Price volatility
 
Buy
 
Increase (decrease)
 
Gain (loss)
Price volatility
 
Sell
 
Increase (decrease)
 
Loss (gain)
 
 
 
 
 
 
Fair Value, by Balance Sheet Grouping
The following table presents Virginia Power’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:
                                 
 
        Level 1        
    
        Level 2        
    
        Level 3        
    
        Total        
  
(millions)
 
 
  
 
  
 
  
 
December 31, 2018
 
 
 
  
 
 
  
 
 
  
 
 
Assets
 
 
 
  
 
 
  
 
 
  
 
 
Derivatives:
   
     
     
     
 
Commodity
 
$
—
 
  
$
24
 
  
$
66
 
  
$
90
 
Interest rate
 
 
—
 
  
 
3
 
  
 
—
 
  
 
3
 
Investments
(1)
:
   
     
     
     
 
Equity securities:
   
     
     
     
 
U.S.
 
 
1,476
 
  
 
—
 
  
 
—
 
  
 
1,476
 
Fixed income:
   
     
     
     
 
Corporate debt instruments
 
 
—
 
  
 
221
 
  
 
—
 
  
 
221
 
Government securities
 
 
164
 
  
 
343
 
  
 
—
 
  
 
507
 
 
                                
Total assets
 
$
1,640
 
  
$
591
 
  
$
66
 
  
$
2,297
 
                                 
Liabilities
 
 
 
  
 
 
  
 
 
  
 
 
Derivatives:
   
     
     
     
 
Commodity
 
$
—
 
  
$
9
 
  
$
6
 
  
$
15
 
Interest rate
 
 
—
 
  
 
88
 
  
 
—
 
  
 
88
 
 
                                
Total liabilities
 
$
—
 
  
$
97
 
  
$
6
 
  
$
103
 
                                 
December 31, 2017
 
 
 
  
 
 
  
 
 
  
 
 
Assets
 
 
 
  
 
 
  
 
 
  
 
 
Derivatives:
   
     
     
     
 
Commodity
  $
—
    $
14
    $
152
    $
166
 
Investments
(1)
:
   
     
     
     
 
Equity securities:
   
     
     
     
 
U.S.
   
1,566
     
—
     
—
     
1,566
 
Fixed income:
   
     
     
     
 
Corporate debt instruments
   
—
     
224
     
—
     
224
 
Government securities
   
168
     
326
     
—
     
494
 
Cash equivalents and other
   
16
     
—
     
—
     
16
 
 
                                
Total assets
  $
1,750
    $
564
    $
152
    $
2,466
 
                                 
Liabilities
 
 
 
  
 
 
  
 
 
  
 
 
Derivatives:
   
     
     
     
 
Commodity
  $
—
    $
4
    $
5
    $
9
 
Interest rate
   
—
     
57
     
—
     
57
 
 
                                
Total liabilities
  $
—
    $
61
    $
5
    $
66
 
                                 
 
 
 
 
 
 
 
 
(1)
Includes investments held in the nuclear decommissioning trusts. Excludes $
160
 million and $
27
 million of assets at December 31, 2018 and 2017, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.
 
 
 
 
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation
The following table presents the net change in Virginia Power’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:
                         
 
        2018        
 
  
                2017
   
        2016        
  
(millions)
 
 
  
 
  
 
Balance at January 1,
 
$
147
 
   $
143
    $
93
 
Total realized and unrealized gains (losses):
 
 
 
    
     
 
Included in earnings:
 
 
 
    
     
 
Electric fuel and other energy-related purchases
 
 
(17
)
   
(43
 )    
(35
 )
Included in regulatory assets/liabilities
 
 
(45
)
   
40
     
(37
 )
Settlements
 
 
(25
)
   
7
     
35
 
Purchases
 
 
—
 
    
—
     
87
 
                         
Balance at December 31,
 
$
60
 
   $
147
    $
143
 
                         
 
 
 
 
 
Dominion Energy Gas Holdings, LLC  
Fair Value, by Balance Sheet Grouping
The following table presents Dominion Energy Gas’ assets and liabilities for derivatives that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:
                                 
 
        Level 1        
    
        Level 2        
    
        Level 3        
    
        Total        
  
(millions)
 
 
  
 
  
 
  
 
December 31, 2018
 
 
 
  
 
 
  
 
 
  
 
 
Assets
 
 
 
  
 
 
  
 
 
  
 
 
Commodity
 
$
—
 
  
$
3
 
  
$
—
 
  
$
3
 
Interest rate
 
 
—
 
  
 
2
 
  
 
—
 
  
 
2
 
Foreign currency
 
 
—
 
  
 
26
 
  
 
—
 
  
 
26
 
 
                                
Total assets
 
$
—
 
  
$
31
 
  
$
—
 
  
$
31
 
                                 
Liabilities
 
 
 
  
 
 
  
 
 
  
 
 
Interest rate
 
$
—
 
  
$
17
 
  
$
—
 
  
$
17
 
Foreign currency
 
 
—
 
  
 
2
 
  
 
—
 
  
 
2
 
 
                                
Total liabilities
 
$
—
 
  
$
19
 
  
$
—
 
  
$
19
 
                                 
December 31, 2017
 
 
 
  
 
 
  
 
 
  
 
 
Assets
 
 
 
  
 
 
  
 
 
  
 
 
Interest rate
  $
—
    $
1
    $
—
    $
1
 
Foreign currency
   
—
     
32
     
—
     
32
 
 
                                
Total assets
  $
—
    $
33
    $
—
    $
33
 
                                 
Liabilities
 
 
 
  
 
 
  
 
 
  
 
 
Commodity
  $
—
    $
4
    $
2
    $
6
 
Foreign currency
   
—
     
2
     
—
     
2
 
 
                                
Total liabilities
  $
—
    $
6
    $
2
    $
8
 
                                 
 
 
 
 
 
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation
The following table presents the net change in Dominion Energy Gas’ derivative assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:
                         
 
        2018        
 
  
        2017        
    
        2016        
  
(millions)
 
 
  
 
  
 
Balance at January 1,
 
$
(2
)
  $
(2
 )   $
6
 
Total realized and unrealized gains (losses):
 
 
 
    
     
 
Included in other comprehensive income (loss)
 
 
1
 
    
(3
 )    
—
 
Transfers out of Level 3
 
 
1
 
    
3
     
(8
 )
                         
Balance at December 31,
 
$
—
 
   $
(2
 )   $
(2)