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Investments
 3 Months Ended
Mar. 31, 2022
Investments Debt And Equity Securities [Abstract]  
Investments

Note 10. Investments

Dominion Energy

Equity and Debt Securities

Rabbi Trust Securities

Equity and fixed income securities and cash equivalents in Dominion Energy’s rabbi trusts and classified as trading totaled $116 million and $122 million at March 31, 2022 and December 31, 2021, respectively.

Decommissioning Trust Securities

Dominion Energy holds equity and fixed income securities, insurance contracts and cash equivalents in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Dominion Energy’s decommissioning trust funds are summarized below:

 

 

 

Amortized

Cost

 

 

Total

Unrealized

Gains

 

 

Total

Unrealized

Losses

 

 

Allowance for Credit Losses

 

 

Fair

Value

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities:(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

1,586

 

 

$

3,498

 

 

$

(13

)

 

 

 

 

 

$

5,071

 

Fixed income securities:(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt instruments

 

 

876

 

 

 

9

 

 

 

(45

)

 

$

—

 

 

 

840

 

Government securities

 

 

1,358

 

 

 

14

 

 

 

(48

)

 

 

—

 

 

 

1,324

 

Common/collective trust funds

 

 

150

 

 

 

3

 

 

 

—

 

 

 

—

 

 

 

153

 

Insurance contracts

 

 

242

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

242

 

Cash equivalents and other(3)

 

 

26

 

 

 

5

 

 

 

(47

)

 

 

—

 

 

 

(16

)

Total

 

$

4,238

 

 

$

3,529

 

 

$

(153

)

(4)

$

—

 

 

$

7,614

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities:(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

1,567

 

 

$

3,734

 

 

$

(13

)

 

 

 

 

 

$

5,288

 

Fixed income securities:(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt instruments

 

 

854

 

 

 

32

 

 

 

(5

)

 

$

—

 

 

 

881

 

Government securities

 

 

1,382

 

 

 

43

 

 

 

(7

)

 

 

—

 

 

 

1,418

 

Common/collective trust funds

 

 

168

 

 

 

4

 

 

 

—

 

 

 

—

 

 

 

172

 

Insurance contracts

 

 

255

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

255

 

Cash equivalents and other(3)

 

 

9

 

 

 

2

 

 

 

(75

)

 

 

—

 

 

 

(64

)

Total

 

$

4,235

 

 

$

3,815

 

 

$

(100

)

(4)

$

—

 

 

$

7,950

 

 

(1)

Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability.

(2)

Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability. Changes in allowance for credit losses are included in other income.

(3)

Includes pending purchases of securities of $1 million and $35 million at March 31, 2022 and December 31, 2021, respectively.

(4)

The fair value of securities in an unrealized loss position was $1.6 billion and $883 million at March 31, 2022 and December 31, 2021, respectively.

The portion of unrealized gains and losses that relates to equity securities held within Dominion Energy’s nuclear decommissioning trusts is summarized below:

 

 

 

Three Months Ended

March 31,

 

 

 

2022

 

 

2021

 

(millions)

 

 

 

 

 

 

 

 

Net gains (losses) recognized during the period

 

$

(206

)

 

$

279

 

Less: Net (gains) losses recognized during the period

   on securities sold during the period

 

 

(1

)

 

 

(178

)

Unrealized gains (losses) recognized during the period

   on securities still held at period end(1)

 

$

(207

)

 

$

101

 

 

(1)

Included in other income and the nuclear decommissioning trust regulatory liability.

 

The fair value of Dominion Energy’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at March 31, 2022 by contractual maturity is as follows:

 

 

 

Amount

 

(millions)

 

 

 

 

Due in one year or less

 

$

274

 

Due after one year through five years

 

 

610

 

Due after five years through ten years

 

 

596

 

Due after ten years

 

 

837

 

Total

 

$

2,317

 

 

Presented below is selected information regarding Dominion Energy’s equity and fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds.

 

 

 

Three Months Ended

March 31,

 

 

 

2022

 

 

2021

 

(millions)

 

 

 

 

 

 

 

 

Proceeds from sales

 

$

814

 

 

$

1,765

 

Realized gains(1)

 

 

40

 

 

 

232

 

Realized losses(1)

 

 

54

 

 

 

59

 

 

(1)

Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.

Virginia Power

Virginia Power holds equity and fixed income securities and cash equivalents in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power’s decommissioning trust funds are summarized below:

 

 

 

Amortized

Cost

 

 

Total

Unrealized

Gains

 

 

Total

Unrealized

Losses

 

 

Allowance for Credit Losses

 

 

Fair

Value

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities:(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

857

 

 

$

1,619

 

 

$

(12

)

 

 

 

 

 

$

2,464

 

Fixed income securities:(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt instruments

 

 

535

 

 

 

4

 

 

 

(30

)

 

$

—

 

 

 

509

 

Government securities

 

 

568

 

 

 

4

 

 

 

(19

)

 

 

—

 

 

 

553

 

Common/collective trust funds

 

 

55

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

55

 

Cash equivalents and other(3)

 

 

(4

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4

)

Total

 

$

2,011

 

 

$

1,627

 

 

$

(61

)

(4)

$

—

 

 

$

3,577

 

December 31, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities:(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

841

 

 

$

1,720

 

 

$

(11

)

 

 

 

 

 

$

2,550

 

Fixed income securities:(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt instruments

 

 

517

 

 

 

17

 

 

 

(3

)

 

$

—

 

 

 

531

 

Government securities

 

 

584

 

 

 

16

 

 

 

(2

)

 

 

—

 

 

 

598

 

Common/collective trust funds

 

 

53

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

53

 

Cash equivalents and other(3)

 

 

2

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

Total

 

$

1,997

 

 

$

1,753

 

 

$

(16

)

(4)

$

—

 

 

$

3,734

 

 

(1)

Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability.

(2)

Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability. Changes in allowance for credit losses are included in other income.

(3)

Includes pending purchases of securities of $2 million at March 31, 2022, and pending sales of securities of $5 million at December 31, 2021.

(4)

The fair value of securities in an unrealized loss position was $863 million and $425 million at March 31, 2022 and December 31, 2021, respectively.

 

 

The portion of unrealized gains and losses that relates to equity securities held within Virginia Power’s nuclear decommissioning trusts is summarized below:

 

 

 

Three Months Ended

March 31,

 

 

 

2022

 

 

2021

 

(millions)

 

 

 

 

 

 

 

 

Net gains (losses) recognized during the period

 

$

(102

)

 

$

143

 

Less: Net (gains) losses recognized during the period

    on securities sold during the period

 

 

(4

)

 

 

(88

)

Unrealized gains (losses) recognized during the period

    on securities still held at period end(1)

 

$

(106

)

 

$

55

 

 

(1)

Included in other income and the nuclear decommissioning trust regulatory liability.

The fair value of Virginia Power’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at March 31, 2022 by contractual maturity is as follows:

 

 

 

Amount

 

(millions)

 

 

 

 

Due in one year or less

 

$

83

 

Due after one year through five years

 

 

302

 

Due after five years through ten years

 

 

358

 

Due after ten years

 

 

374

 

Total

 

$

1,117

 

 

Presented below is selected information regarding Virginia Power’s equity and fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds.

 

 

 

Three Months Ended

March 31,

 

 

 

2022

 

 

2021

 

(millions)

 

 

 

 

 

 

 

 

Proceeds from sales

 

$

392

 

 

$

789

 

Realized gains(1)

 

 

16

 

 

 

106

 

Realized losses(1)

 

 

19

 

 

 

23

 

 

(1)

Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.

Equity Method Investments

Dominion Energy recorded equity earnings on its investments of $80 million for both the three months ended March 31, 2022 and 2021, in earnings from equity method investees in its Consolidated Statements of Income. In addition, Dominion Energy recorded equity losses of $2 million and $8 million for the three months ended March 31, 2022 and 2021, respectively, in discontinued operations related to its investment in Atlantic Coast Pipeline. Dominion Energy received distributions of $76 million and $73 million for the three months ended March 31, 2022 and 2021, respectively. Dominion Energy made contributions of $74 million and $1.0 billion for the three months ended March 31, 2022 and 2021, respectively. At March 31, 2022 and December 31, 2021, the net difference between the carrying amount of Dominion Energy’s investments and its share of underlying equity in net assets was $231 million and $244 million, respectively. At March 31, 2022, these differences are primarily comprised of $11 million of equity method goodwill that is not being amortized and a $219 million basis difference from Dominion Energy’s investment in Cove Point, which is being amortized over the useful lives of the underlying assets. At December 31, 2021, these differences are comprised of $27 million of equity method goodwill that is not being amortized, a $221 million basis difference from Dominion Energy’s investment in Cove Point, which is being amortized over the useful lives of the underlying assets, and a net $(4) million basis difference primarily attributable to an unfunded commitment made to Align RNG.

Cove Point

Dominion Energy holds a 50% noncontrolling limited partnership interest in Cove Point which is accounted for as an equity method investment, as discussed in Note 9 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021.

Income before income taxes recorded by Cove Point was $151 million and $138 million for the three months ended March 31, 2022 and 2021, respectively. Earnings attributable to Dominion Energy are presented within earnings from equity method investees in its Consolidated Statements of Income.

Dominion Energy recorded distributions from Cove Point of $76 million and $73 million for the three months ended March 31, 2022 and 2021, respectively.

Atlantic Coast Pipeline

A description of Dominion Energy’s investment in Atlantic Coast Pipeline, including events that led to the cancellation of the Atlantic Coast Pipeline Project in July 2020, is included in Note 9 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

At March 31, 2022 and December 31, 2021, Dominion Energy has recorded a liability of $115 million and $113 million, respectively, in other current liabilities in its Consolidated Balance Sheets as a result of its share of equity losses exceeding its investment which reflects Dominion Energy’s obligations on behalf of Atlantic Coast Pipeline related to its AROs.

Dominion Energy recorded contributions of $965 million during the three months ended March 31, 2021 to Atlantic Coast Pipeline. Dominion Energy recorded no contributions during the three months ended March 31, 2022 to Atlantic Coast Pipeline.  

Dominion Energy expects to incur additional losses from Atlantic Coast Pipeline as it completes wind-down activities.  While Dominion Energy is unable to precisely estimate the amounts to be incurred by Atlantic Coast Pipeline, the portion of such amounts attributable to Dominion Energy is not expected to be material to Dominion Energy’s results of operations, financial position or statement of cash flows.

Wrangler

In March 2022, Dominion Energy sold its remaining 15% noncontrolling partnership interest in Wrangler to Interstate Gas Supply, Inc. for cash consideration of $85 million. Dominion Energy recognized a gain of $11 million ($8 million after-tax), included in other income, in its Consolidated Statements of Income for the three months ended March 31, 2022.

All activity relating to Wrangler is recorded within the Corporate and Other segment.

Dominion Privatization

In February 2022, Dominion Energy entered into an agreement to form Dominion Privatization, a partnership with Patriot. Dominion Privatization, through its wholly-owned subsidiaries, will maintain and operate electric and gas distribution infrastructure under service concession arrangements with certain U.S. military installations. Under the agreement, Dominion Energy will contribute its existing privatization operations, excluding contracts held by DESC, and Patriot will contribute cash.

The initial contribution, consisting of privatization operations in South Carolina, Texas and Pennsylvania, closed in March 2022 for which Dominion Energy received total consideration of $120 million, subject to customary closing adjustments, comprised of $60 million in cash proceeds and a 50% noncontrolling ownership interest in Dominion Privatization with an initial fair value of $60 million, estimated using the market approach. This is considered a Level 2 fair value measurement given that it is based on the agreed-upon sales price. In connection with the transaction, Dominion Energy recorded a gain of $23 million ($16 million after-tax), presented in other operations and maintenance expense in its Consolidated Statements of Income. Dominion Energy’s 50% noncontrolling ownership interest in Dominion Privatization is accounted for as an equity method investment as Dominion Energy has the ability to exercise significant influence, but not control, over the investee.

Dominion Energy expects to contribute its existing privatization operations in Virginia to Dominion Privatization by the end of 2022, contingent on clearance or approval under the Hart-Scott-Rodino Act and other customary closing and regulatory conditions. In April 2022, Dominion Energy filed with the Federal Trade Commission for approval under the Hart-Scott-Rodino Act. The contribution of the service concession arrangements currently held by Virginia Power also requires approval from the Virginia and North Carolina Commissions. Upon closing of the second contribution, Dominion Energy expects to receive cash proceeds totaling $108 million, subject to customary closing adjustments, and to recognize a gain of approximately $130 million ($100 million after-tax). When this future contribution occurs, Dominion Energy expects to maintain a 50% noncontrolling ownership interest in Dominion Privatization.

At March 31, 2022, $85 million of contracts and related assets and $4 million of liabilities associated with existing privatization operations in Virginia are classified as held for sale and reflected in current assets held for sale and current liabilities held for sale, respectively, in Dominion Energy’s Consolidated Balance Sheets and in other current assets and other current liabilities, respectively, in Virginia Power’s Consolidated Balance Sheets.

All activity relating to Dominion Privatization is reflected within the Corporate and Other segment.