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Operating Segments
Nov. 18, 2019
Segment Reporting [Abstract]  
Operating Segments
Note 22. Operating Segments
The Companies are organized primarily on the basis of products and services sold in the U.S. A description of the operations included in the Companies’ primary operating segments is as follows:
                             
Primary Operating Segment
 
Description of Operations
 
Dominion
        Energy        
 
  
Virginia Power  
 
  
Dominion
    Energy Gas    
 
Power Delivery
 
Regulated electric distribution
 
 
X
 
  
 
X
 
  
 
 
 
Regulated electric transmission
 
 
X
 
  
 
X
 
  
 
 
Power Generation
 
Regulated electric generation fleet
 
 
X
 
  
 
X
 
  
 
 
 
Merchant electric generation fleet
 
 
X
 
  
 
 
  
 
 
Gas Infrastructure
 
Gas transmission and storage
 
 
X
 
  
 
 
  
 
X
 
 
Gas distribution and storage
 
 
X
 
  
 
 
  
 
 
 
Gas gathering and processing
 
 
X
 
  
 
 
  
 
 
 
LNG terminalling and storage
 
 
X
 
  
 
 
  
 
X
 
 
Nonregulated retail energy marketing                    
  
 
X
 
  
 
 
  
 
 
Southeast Energy
 
Regulated electric distribution
 
 
X
 
  
 
 
  
 
 
 
Regulated electric transmission
 
 
X
 
  
 
 
  
 
 
 
Regulated electric generation fleet
 
 
X
 
  
 
 
  
 
 
 
Gas distribution and storage
 
 
X
 
  
 
 
  
 
 
 
Nonregulated retail energy marketing
 
 
X
 
  
 
 
  
 
 
 
 
In addition to the operating segments above, the Companies also report a Corporate and Other segment.
Dominion Energy
The Corporate and Other Segment of Dominion Energy
includes its corporate, service company and other functions (including unallocated debt). In addition, Corporate and Other includes specific items attributable to Dominion Energy’s operating segments that are not included in profit measures evaluated by executive management in assessing the segments’ performance or in allocating resources.
In the six months ended June 30, 2019, Dominion Energy reported
after-tax
net expenses of $2.1 billion for specific items in the Corporate and Other segment, with $1.9 billion of net expenses attributable to its operating segments. In the six months ended June 30, 2018, Dominion Energy reported
after-tax
net expenses of $349 million for specific items in the Corporate and Other segment, with $310 million of net expenses attributable to its operating segments.
The net expense for specific items attributable to Dominion Energy’s operating segments in 2019 primarily related to the impact of the following items:
●
 A $1.0 billion ($760 million
after-tax)
charge for refunds of amounts previously collected primarily from retail electric customers of DESC for the NND Project, attributable to Southeast Energy;
 
 
 
 
 
 
●
 $548 million ($418 million
after-tax)
of merger and integration-related costs associated with the SCANA Combination, including a $425 million ($317 million
after-tax)
charge related to a voluntary retirement program, attributable to:
 
 
 
 
 
 
 
●
 Power Delivery ($73 million
after-tax);
 
 
 
 
 
 
 
●
 Power Generation ($109 million
after-tax);
 
 
 
 
 
 
 
●
 Gas Infrastructure ($80 million
after-tax);
and
 
 
 
 
 
 
 
●
 Southeast Energy ($156 million
after-tax);
 
 
 
 
 
 
●
 A $369 million ($275 million
after-tax)
charge related to the early retirement of certain Virginia Power electric generation facilities, attributable to Power Generation;
 
 
 
 
 
 
●
 $278 million ($209 million
after-tax)
of charges associated with litigation acquired in the SCANA Combination, attributable to Southeast Energy;
 
 
 
 
 
 
●
 A $198 million tax charge for $264 million of income
tax-related
regulatory assets acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery, attributable to Southeast Energy;
 
 
 
 
 
 
●
 A $160 million ($119 million
after-tax)
charge related to Virginia Power’s planned early retirement of certain automated meter reading infrastructure, attributable to Power Delivery;
 
 
 
 
 
 
●
 A $135 million ($100 million
after-tax)
charge related to Virginia Power’s contract termination with a
non-utility
generator, attributable to Power Generation; and
 
 
 
 
 
 
●
 A $114 million ($86 million
after-tax)
charge for property, plant and equipment acquired in the SCANA Combination primarily for which Dominion Energy committed to forgo recovery, attributable to Southeast Energy; partially offset by
 
 
 
 
 
 
●
 A $336 million ($251 million
after-tax)
net gain related to investments in nuclear decommissioning trust funds, attributable to Power Generation; and
 
●
 A $113 million ($84 million
after-tax)
benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019, attributable to Power Generation.
The net expense for specific items attributable to Dominion Energy’s operating segments in 2018 primarily related to the impact of the following items:
●
 A $215 million ($160 million
after-tax)
charge associated with Virginia legislation enacted in March 2018 that requires
one-time
rate credits of certain amounts to utility customers, attributable to:
 
●
 Power Generation ($109 million
after-tax);
and
 
●
 Power Delivery ($51 million
after-tax).
●
 A $122 million ($89 million
after-tax)
charge for disallowance of FERC-regulated plant, attributable to Gas Infrastructure.
●
 An $81 million ($60 million
after-tax)
charge associated primarily with the asset retirement obligations for ash ponds and landfills at certain utility generation facilities in connection with the enactment of Virginia legislation in April 2018 attributable to Power Generation.
The following table presents segment information pertaining to Dominion Energy’s operations:
Dominion Energy
  
Power
  Delivery  
 
  
Power
Generation
 
  
Gas
Infrastructure
 
  
  Southeast  
Energy
 
  
Corporate
and Other
 
  
Adjustments/
Eliminations
 
  
Consolidated
Total
 
(millions)
 
 
  
 
  
 
  
 
  
 
  
 
  
 
                                                         
Three Months Ended
June
 3
0
, 2019
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
Total revenue from external customers
 
$
585
 
  
$
1,598
 
  
$
881
 
  
$
915
 
  
$
(9
)
  
$
—
 
  
$
3,970
 
Intersegment revenue
 
 
6
 
  
 
5
 
  
 
29
 
  
 
—
 
  
 
263
 
  
 
(303
)
  
 
—
 
                                                         
Total operating revenue
 
 
591
 
  
 
1,603
 
  
 
910
 
  
 
915
 
  
 
254
    
 
(303
)
  
 
3,970
 
Net income (loss) attributable to Dominion Energy
 
 
156
 
  
 
250
 
  
 
247
 
  
 
82
 
  
 
(681
)
  
 
—
 
  
 
54
  
                                                         
Three Months Ended
June
 3
0
, 2018
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
Total revenue from external customers
  $
528
    $
1,635
    $
914
     
    $
(3
 )   $
14
    $
3,088
 
Intersegment revenue
   
6
     
3
     
8
     
     
170
     
(187
 )    
—
 
                                                         
Total operating revenue
   
534
     
1,638
     
922
     
     
167
      
(173
 )    
3,088
 
Net income (loss) attributable to Dominion Energy
   
145
     
276
     
249
     
     
(221
 )    
—
     
449
 
Six Months Ended June 30, 2019
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
Total revenue from external customers
 
$
1,183
 
 
$
3,343
 
 
$
2,254
 
 
$
2,097
 
 
$
(1,049
)
 
$
—
 
 
$
7,828
 
Intersegment revenue
 
 
12
 
 
 
9
 
 
 
55
 
 
 
—
 
 
 
447
 
 
 
(523
)
 
 
 
—
 
Total operating revenue
 
 
1,195
 
 
 
3,352
 
 
 
2,309
 
 
 
2,097
 
 
 
(602
)
 
 
 
(523
)
 
 
 
7,828
 
Net income (loss) attributable to Dominion Energy
 
 
311
 
 
 
558
 
 
 
606
 
 
 
214
 
 
 
(2,315
)
 
 
 
—
 
 
 
(626
)
 
Six Months Ended June 30, 2018
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
Total revenue from external customers
 
$
1,091
 
 
$
3,495
 
 
$
2,136
 
 
 
  
 
 
$
(210
)
 
$
42
 
 
$
6,554
 
Intersegment revenue
 
 
12
 
 
 
5
 
 
 
14
 
 
 
  
 
 
 
345
 
 
 
(376
)
 
 
—
 
Total operating revenue
 
 
1,103
 
 
 
3,500
 
 
 
2,150
 
 
 
  
 
 
 
135
 
 
 
(334
)
 
 
6,554
 
Net income (loss) attributable to Dominion Energy
 
 
301
 
 
 
624
 
 
 
576
 
 
 
  
 
 
 
(549
)
 
 
—
 
 
 
952
 
Intersegment sales and transfers for Dominion Energy are based on contractual arrangements and may result in intersegment profit or loss that is eliminated in consolidation.
Virginia Power
The Corporate and Other Segment of Virginia Power
primarily includes specific items attributable to its operating segments that are not included in profit measures evaluated by executive management in assessing the segments’ performance or in allocating resources.
In the six months ended June 30, 2019, Virginia Power reported
after-tax
net expenses of $652 million for specific items in the Corporate and Other segment, with $607 million of net expenses attributable to its operating segments. In the six months ended June 30, 2018, Virginia Power reported
after-tax
net expenses of $237 million for specific items in the Corporate and Other segment, with $230 million of net expenses attributable to its operating segments.
The net expense for specific items attributable to Virginia Power’s operating segments in 2019 primarily related to the impact of the following items:
●
 A $369 million ($275 million
after-tax)
charge related to the early retirement of certain electric generation facilities, attributable to Power Generation;
●
 A $192 million ($143 million
after-tax)
charge related to a voluntary retirement program, attributable to:
 
●
 Power Delivery ($71 million
after-tax);
and
 
●
 Power Generation ($72 million
after-tax);
●
 A $160 million ($119 million
after-tax)
charge related to the planned early retirement of certain automated meter reading infrastructure, attributable to Power Delivery;
●
 A $135 million ($100 million
after-tax)
charge related to a contract termination with a
non-utility
generator, attributable to Power Generation; and
●
 A $62 million ($46 million
after-tax)
charge related the abandonment of a project at an electric generating facility, attributable to Power Generation; partially offset by
●
 A $113 million ($84 million
after-tax)
benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019, attributable to Power Generation.
The net expense for specific items attributable to Virginia Power’s operating segments in 2018 primarily related to the impact of the following items:
●
 A $215 million ($160 million
after-tax)
charge associated with Virginia legislation enacted in March 2018 that requires
one-time
rate credits of certain amounts to utility customers, attributable to:
 
●
 Power Generation ($109 million
after-tax);
and
 
●
 Power Delivery ($51 million
after-tax).
●
 An $81 million ($60 million
after-tax)
charge associated primarily with the asset retirement obligations for ash ponds and landfills at certain utility generation facilities in connection with the enactment of Virginia legislation in April 2018 attributable to Power Generation.
The following table presents segment information pertaining to Virginia Power’s operations:
 
Power
    Delivery    
 
  
Power
    Generation    
 
  
Corporate
    and Other    
 
  
Consolidated
          Total          
 
(millions)
 
 
  
 
  
 
  
 
Three Months Ended June 30, 2019
 
 
 
  
 
 
  
 
 
  
 
 
Operating revenue
 
$
         585
 
  
$
         1,353
 
  
$
         —
 
  
$
         1,938
 
Net income (loss)
 
 
156
 
  
 
237
 
  
 
(293
)
 
 
100
 
                                 
Three Months Ended June 30, 2018
 
 
 
  
 
 
  
 
 
  
 
 
Operating revenue
  $
528
    $
1,301
    $
—
    $
1,829
 
Net income (loss)
   
145
     
227
     
(33
 )    
339
 
                                 
Six Months Ended June 30, 2019
 
 
 
  
 
 
  
 
 
  
 
 
Operating revenue
 
$
1,183
 
  
$
2,749
 
  
$
(29
)
 
$
3,903
 
Net income (loss)
 
 
310
 
  
 
441
 
  
 
(631
)
 
 
120
 
                                 
Six Months Ended June 30, 2018
 
 
 
  
 
 
  
 
 
  
 
 
Operating revenue
  $
1,091
    $
2,701
    $
(215
 )   $
3,577
 
Net income (loss)
   
299
     
449
     
(225
 )    
523
 
                                 
Dominion Energy Gas
The Corporate and Other Segment of Dominion Energy Gas
primarily includes specific items attributable to Dominion Energy Gas’ operating segment that are not included in profit measures evaluated by executive management in assessing the segment’s performance or in allocating resources and the effect of certain items recorded at Dominion Energy Gas as a result of Dominion Energy’s basis in the net assets contributed. In addition, Corporate and Other includes the net impact of discontinued
 operations
, which are discussed in Note 3.
In the six months ended June 30, 2019, Dominion Energy Gas reported
after-tax
net expenses of $44 million for specific items in the Corporate and Other segment,
$43 million
of which
is
attributable to its operating segment. In the six months ended June 30, 2018, Dominion Energy Gas reported
after-tax
net expenses of $91 million for specific items in the Corporate and Other segment, with $89 million of net expenses attributable to its operating segment.
The net expense for specific items attributable to Dominion Energy Gas’ operating segment in 2019 primarily related to a $42 million ($31 million
after-tax)
charge related to a voluntary retirement program, attributable to Gas Infrastructure.
The net expense for specific items attributable to Dominion Energy Gas’ operating segment in 2018 primarily related to a $122 million ($89 million
after-tax)
charge for disallowance of FERC-regulated plant, attributable to Gas Infrastructure.
The following table presents segment information pertaining to Dominion Energy Gas’ operations:
                         
 
Gas
    Infrastructure    
 
  
    Corporate and    
Other
 
  
    Consolidated    
Total
 
(millions)
 
 
  
 
  
 
Three Months Ended June 30, 2019
 
 
 
  
 
 
  
 
 
Operating revenue
 
$
         530
 
  
$
—
 
  
$
         530
 
Net income from discontinued operations
 
 
—
 
  
 
26
 
  
 
26
 
Net income attributable to Dominion Energy Gas
 
 
116
 
  
 
3
 
  
 
119
 
                         
Three Months Ended June 30, 2018
 
 
 
  
 
 
  
 
 
Operating revenue
  $
508
    $
—
    $
508
 
Net income from discontinued operations
   
—
     
45
    $
45
 
Net income (loss) attributable to Dominion Energy Gas
   
130
     
(47
 )    
83
 
                         
Six Months Ended June 30, 2019
 
 
 
  
 
 
  
 
 
Operating revenue
 
$
1,096
 
  
$
—
 
  
$
1,096
 
Net income from discontinued operations
 
 
—
 
  
 
80
 
  
 
80
 
Net income attributable to Dominion Energy Gas
 
 
254
 
  
 
55
 
  
 
309
 
                         
Six Months Ended June 30, 2018
 
 
 
  
 
 
  
 
 
Operating revenue
  $
898
    $
—
    $
898
 
Net income from discontinued operations
   
—
     
        102
     
102
 
Net income attributable to Dominion Energy Gas
   
253
     
10
     
263