XML 53 R40.htm IDEA: XBRL DOCUMENT

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Inputs, Assets, Quantitative Information

The following table presents Dominion Energy’s quantitative information about Level 3 fair value measurements at September 30, 2022. 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:
Natural gas⁽²⁾	$	1	Discounted cash flow	Market price (per Dth)	⁽³⁾	(2) - 6	(1)
FTRs		263	Discounted cash flow	Market price (per MWh)	⁽³⁾	1-19	5
Electricity		211	Discounted cash flow	Market price (per MWh)	⁽³⁾	28-199	51
Physical options:
Natural gas⁽²⁾		24	Option model	Market price (per Dth)	⁽³⁾	4-17	10
				Price volatility	⁽⁴⁾	13%-70%	51%
Total assets	$	499
Liabilities
Physical and financial forwards:
Natural gas⁽²⁾	$	12	Discounted cash flow	Market price (per Dth)	⁽³⁾	(2)-8	1
FTRs		5	Discounted cash flow	Market price (per MWh)	⁽³⁾	1-10	4
Total liabilities	$	17

(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)
At September 30, 2022
Assets
Derivatives:
Commodity	$	—		$	371	$	499	$	870
Interest rate		—			1,593		—		1,593
Foreign currency exchange rate		—			6		—		6
Investments⁽¹⁾:
Equity securities:
U.S.		3,514			—		—		3,514
Fixed income:
Corporate debt instruments		—			563		—		563
Government securities		159			1,067		—		1,226
Total assets	$	3,673		$	3,600	$	499	$	7,772
Liabilities
Derivatives:
Commodity	$	—		$	1,492	$	17	$	1,509
Interest rate		—			475		—		475
Foreign currency exchange rate		—			387		—		387
Total liabilities	$	—		$	2,354	$	17	$	2,371
At December 31, 2021
Assets
Derivatives:
Commodity	$	—		$	52	$	230	$	282
Interest rate		—			323		—		323
Foreign currency exchange rate		—			8		—		8
Investments⁽¹⁾:
Equity securities:
U.S.		5,241			—		—		5,241
Fixed income:
Corporate debt instruments		—			881		—		881
Government securities		199			1,256		—		1,455
Cash equivalents and other		(29	)		—		—		(29	)
Total assets	$	5,411		$	2,520	$	230	$	8,161
Liabilities
Derivatives:
Commodity	$	—		$	461	$	8	$	469
Interest rate		—			399		—		399
Total liabilities	$	—		$	860	$	8	$	868

(1)

Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes $238 million and $366 million of assets at September 30, 2022 and December 31, 2021, 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:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
(millions)
Beginning balance	$	480		$	62		$	222		$	103
Total realized and unrealized gains (losses):
Included in earnings:
Operating revenue		—			(6	)		—			(8	)
Electric fuel and other energy-related purchases		181			29			346			12
Included in regulatory assets/liabilities		2			88			243			49
Settlements		(181	)		(29	)		(346	)		(12	)
Purchases		—			—			17			—
Ending balance	$	482		$	144		$	482		$	144

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:

	September 30, 2022				December 31, 2021
	Carrying Amount		Estimated Fair Value⁽¹⁾		Carrying Amount		Estimated Fair Value⁽¹⁾
(millions)
Dominion Energy
Long-term debt⁽²⁾	$	38,487	$	34,700	$	35,996	$	40,947
Supplemental credit facility borrowings		450		450		—		—
Junior subordinated notes⁽³⁾		1,387		1,338		1,386		1,470
Virginia Power
Long-term debt⁽³⁾	$	15,618	$	13,840	$	13,753	$	16,021

(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 current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs and discount or premium. At December 31, 2021 the carrying amount includes the valuation of certain fair value hedges associated with fixed rate debt of $2 million. There were no fair value hedges associated with fixed rate debt at September 30, 2022.

(3)	Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium.

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 September 30, 2022. 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:
Natural gas⁽²⁾	$	1	Discounted cash flow	Market price (per Dth)	⁽³⁾	(2) - 6	(1)
FTRs		263	Discounted cash flow	Market price (per MWh)	⁽³⁾	1 - 19	5
Physical options:
Natural gas⁽²⁾		24	Option model	Market price (per Dth)	⁽³⁾	4-17	10
				Price volatility	⁽⁴⁾	13%-70%		51	%
Total assets	$	288
Liabilities
Physical and financial forwards:
Natural gas⁽²⁾	$	12	Discounted cash flow	Market price (per Dth)	⁽³⁾	(2) - 5	1
FTRs		5	Discounted cash flow	Market price (per MWh)	⁽³⁾	1-10	4
Total liabilities	$	17

(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)
At September 30, 2022
Assets
Derivatives:
Commodity	$	—		$	71	$	288	$	359
Interest rate		—			596		—		596
Foreign currency exchange rate		—			6		—		6
Investments⁽¹⁾:
Equity securities:
U.S.		1,870			—		—		1,870
Fixed income:
Corporate debt instruments		—			372		—		372
Government securities		88			518		—		606
Total assets	$	1,958		$	1,563	$	288	$	3,809
Liabilities
Derivatives:
Commodity	$	—		$	486	$	17	$	503
Interest rate		—			27		—		27
Foreign currency exchange rate		—			387		—		387
Total liabilities	$	—		$	900	$	17	$	917
At December 31, 2021
Assets
Derivatives:
Commodity	$	—		$	36	$	110	$	146
Interest rate		—			146		—		146
Foreign currency exchange rate		—			8		—		8
Investments⁽¹⁾:
Equity securities:
U.S.		2,420			—		—		2,420
Fixed income:
Corporate debt instruments		—			531		—		531
Government securities		93			506		—		599
Cash equivalents and other		(3	)		—		—		(3	)
Total assets	$	2,510		$	1,227	$	110	$	3,847
Liabilities
Derivatives:
Commodity	$	—		$	125	$	8	$	133
Interest rate		—			337		—		337
Total liabilities	$	—		$	462	$	8	$	470

(1)

Includes investments held in the nuclear decommissioning trusts. Excludes $150 million and $185 million of assets at September 30, 2022 and December 31, 2021, 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:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
(millions)
Beginning balance	$	245		$	74		$	102		$	103
Total realized and unrealized gains (losses):
Included in earnings:
Electric fuel and other energy-related purchases		142			27			293			10
Included in regulatory assets/liabilities		26			41			152			12
Settlements		(142	)		(27	)		(293	)		(10	)
Purchases		—			—			17			—
Ending balance	$	271		$	115		$	271		$	115