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Regulatory Assets and Liabilities (Tables)
9 Months Ended
Sep. 30, 2022
Schedule of Regulatory Assets and Liabilities

Regulatory assets and liabilities include the following:

 

 

 

September 30, 2022

 

 

December 31, 2021

 

(millions)

 

 

 

 

 

 

 

 

Dominion Energy

 

 

 

 

 

 

 

 

Regulatory assets:

 

 

 

 

 

 

 

 

Deferred cost of fuel used in electric generation(1)

 

$

571

 

 

$

251

 

Deferred project costs and DSM programs for gas utilities(2)

 

 

68

 

 

 

53

 

Unrecovered gas costs(3)

 

 

184

 

 

 

191

 

Deferred rider costs for Virginia electric utility(4)

 

 

149

 

 

 

72

 

Ash pond and landfill closure costs(5)

 

 

62

 

 

 

193

 

Deferred nuclear refueling outage costs(6)

 

 

55

 

 

 

79

 

NND Project costs(7)

 

 

138

 

 

 

138

 

Deferred early plant retirement charges(8)

 

 

226

 

 

 

226

 

Derivatives(9)

 

 

375

 

 

 

112

 

Other

 

 

236

 

 

 

177

 

Regulatory assets-current

 

 

2,064

 

 

 

1,492

 

Unrecognized pension and other postretirement benefit costs(10)

 

 

549

 

 

 

548

 

Deferred rider costs for Virginia electric utility(4)

 

 

312

 

 

 

489

 

Deferred project costs for gas utilities(2)

 

 

693

 

 

 

675

 

Interest rate hedges(11)

 

 

170

 

 

 

899

 

AROs and related funding(12)

 

 

409

 

 

 

329

 

NND Project costs(7)

 

 

2,122

 

 

 

2,226

 

Ash pond and landfill closure costs(5)

 

 

2,245

 

 

 

2,223

 

Deferred cost of fuel used in electric generation(1)

 

 

1,318

 

 

 

409

 

Deferred early plant retirement charges(8)

 

 

56

 

 

 

226

 

Derivatives(9)

 

 

562

 

 

 

35

 

Other

 

 

525

 

 

 

584

 

Regulatory assets-noncurrent

 

 

8,961

 

 

 

8,643

 

Total regulatory assets

 

$

11,025

 

 

$

10,135

 

Regulatory liabilities:

 

 

 

 

 

 

 

 

Provision for future cost of removal and AROs(13)

 

 

181

 

 

 

181

 

Reserve for refunds and rate credits to electric utility customers(14)

 

 

129

 

 

 

420

 

Income taxes refundable through future rates(15)

 

 

147

 

 

 

153

 

Monetization of guarantee settlement(16)

 

 

67

 

 

 

67

 

Derivatives(9)

 

 

325

 

 

 

69

 

Other

 

 

170

 

 

 

96

 

Regulatory liabilities-current

 

 

1,019

 

 

 

986

 

Income taxes refundable through future rates(15)

 

 

4,096

 

 

 

4,260

 

Provision for future cost of removal and AROs(13)

 

 

2,409

 

 

 

2,331

 

Nuclear decommissioning trust(17)

 

 

1,532

 

 

 

2,158

 

Monetization of guarantee settlement(16)

 

 

719

 

 

 

831

 

Interest rate hedges(11)

 

 

202

 

 

 

67

 

Reserve for refunds and rate credits to electric utility customers(14)

 

 

358

 

 

 

448

 

Unrecognized pension and other postretirement benefit costs(10)

 

 

177

 

 

 

200

 

Overrecovered other postretirement benefit costs(18)

 

 

131

 

 

 

105

 

Derivatives(9)

 

 

227

 

 

 

169

 

Other

 

 

191

 

 

 

144

 

Regulatory liabilities-noncurrent

 

 

10,042

 

 

 

10,713

 

Total regulatory liabilities

 

$

11,061

 

 

$

11,699

 

 

(1)

Reflects deferred fuel expenses for the Virginia, North Carolina and South Carolina jurisdictions of Dominion Energy’s electric generation operations. Reflects a $66 million reduction recorded in the first quarter of 2022 from the application of a portion of the monetization of guarantee settlement previously reflected as regulatory liabilities associated with the approval of DESC’s cost of fuel proceedings. See Note 13 for additional information.

(2)

Primarily reflects amounts expected to be collected from or owed to gas customers in Dominion Energy’s service territories associated with current and prospective rider projects, including CEP, PIR and pipeline integrity management. See Note 13 for additional information.

(3)

Reflects unrecovered gas costs at regulated gas operations, which are recovered through filings with the applicable regulatory authority.

(4)

Reflects deferrals under Virginia Power’s electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects. See Note 13 for additional information.

 

(5)

Primarily reflects legislation enacted in Virginia in 2019, which requires any CCR asset located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through beneficial reuse. These deferred costs are expected to be collected over a period between 15 and 18 years commencing December 2021 through Rider CCR. Virginia Power is entitled to collect carrying costs on uncollected  expenditures once expenditures have been made. See Note 13 for additional information.

(6)

Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months.

(7)

Reflects expenditures by DESC associated with the NND Project, which pursuant to the SCANA Merger Approval Order, will be recovered from DESC electric service customers over a 20-year period ending in 2039. See Note 3 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.

(8)

Reflects amounts from the early retirements of certain coal- and oil-fired generating units to be amortized through 2023 in accordance with the settlement of the 2021 Triennial Review. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.

(9)

Represents changes in the fair value of derivatives, excluding separately presented interest rate hedges, that following settlement are expected to be recovered from or refunded to customers.

(10)

Represents unrecognized pension and other postretirement employee benefit costs expected to be recovered or refunded through future rates generally over the expected remaining service period of plan participants by certain of Dominion Energy's rate-regulated subsidiaries.

(11)

Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted-average useful life of approximately 25 years as of September 30, 2022. 

(12)

Represents deferred depreciation and accretion expense related to legal obligations associated with the future retirement of generation, transmission and distribution properties. The AROs primarily relate to DESC’s electric generating facilities, including Summer, and are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 105 years.

(13)

Rates charged to customers by Dominion Energy’s regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.

(14)

Reflects amounts previously collected from retail electric customers of DESC for the NND Project to be credited over an estimated 11-year period effective February 2019, in connection with the SCANA Merger Approval Order. See Notes 3 and 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information. Also reflects amounts to be refunded to jurisdictional retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.

(15)

Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will primarily reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity.

(16)

Reflects amounts to be refunded to DESC electric service customers over a 20-year period ending in 2039 associated with the monetization of a bankruptcy settlement agreement.  See Note 3 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.

(17)

Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon, as applicable) for the future decommissioning of Dominion Energy’s utility nuclear generation stations, in excess of the related AROs.

(18)

Reflects a regulatory liability for the collection of postretirement benefit costs allowed in rates in excess of expense incurred.

Virginia Power  
Schedule of Regulatory Assets and Liabilities

 

 

September 30, 2022

 

 

December 31, 2021

 

(millions)

 

 

 

 

 

 

 

 

Virginia Power

 

 

 

 

 

 

 

 

Regulatory assets:

 

 

 

 

 

 

 

 

Deferred cost of fuel used in electric generation(1)

 

$

205

 

 

$

131

 

Deferred rider costs(2)

 

 

149

 

 

 

72

 

Ash pond and landfill closure costs(3)

 

 

62

 

 

 

193

 

Deferred nuclear refueling outage costs(4)

 

 

55

 

 

 

79

 

Deferred early plant retirement charges(5)

 

 

226

 

 

 

226

 

Derivatives(6)

 

 

369

 

 

 

105

 

Other

 

 

70

 

 

 

44

 

Regulatory assets-current

 

 

1,136

 

 

 

850

 

Deferred rider costs(2)

 

 

312

 

 

 

489

 

Interest rate hedges(7)

 

 

 

 

 

604

 

Ash pond and landfill closure costs(3)

 

 

2,242

 

 

 

2,223

 

Deferred cost of fuel used in electric generation(1)

 

 

1,318

 

 

 

409

 

Deferred early plant retirement charges(5)

 

 

56

 

 

 

226

 

Derivatives(6)

 

 

453

 

 

 

34

 

Other

 

 

137

 

 

 

145

 

Regulatory assets-noncurrent

 

 

4,518

 

 

 

4,130

 

Total regulatory assets

 

$

5,654

 

 

$

4,980

 

Regulatory liabilities:

 

 

 

 

 

 

 

 

Provision for future cost of removal(8)

 

 

154

 

 

 

154

 

Reserve for refunds to Virginia electric customers(9)

 

 

27

 

 

 

306

 

Income taxes refundable through future rates(10)

 

 

63

 

 

 

63

 

Derivatives(6)

 

 

265

 

 

 

51

 

Other

 

 

139

 

 

 

73

 

Regulatory liabilities-current

 

 

648

 

 

 

647

 

Income taxes refundable through future rates(10)

 

 

2,280

 

 

 

2,335

 

Nuclear decommissioning trust(11)

 

 

1,532

 

 

 

2,158

 

Provision for future cost of removal(8)

 

 

1,082

 

 

 

1,043

 

Interest rate hedges(7)

 

 

202

 

 

 

 

Reserve for refunds to Virginia electric customers(9)

 

 

6

 

 

 

25

 

Other

 

 

167

 

 

 

179

 

Regulatory liabilities-noncurrent

 

 

5,269

 

 

 

5,740

 

Total regulatory liabilities

 

$

5,917

 

 

$

6,387

 

(1)

Reflects deferred fuel expenses for the Virginia and North Carolina jurisdictions of Virginia Power’s generation operations. See Note 13 for additional information.

(2)

Reflects deferrals under Virginia Power’s electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects. See Note 13 for additional information.

(3)

Primarily reflects legislation enacted in Virginia in 2019, which requires any CCR asset located at certain Virginia Power stations to be closed by removing the CCR to an approved landfill or through beneficial reuse. These deferred costs are expected to be collected over a period between 15 and 18 years commencing December 2021 through Rider CCR. Virginia Power is entitled to collect carrying costs on uncollected expenditures once expenditures have been made. See Note 13 for additional information.  

(4)

Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months.

(5)

Reflects amounts from the early retirements of certain coal- and oil-fired generating units to be amortized through 2023 in accordance with the settlement of the 2021 Triennial Review.  See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.

(6)

Represents changes in the fair value of derivatives, excluding separately presented interest rate hedges, that following settlement are expected to be recovered from or refunded to customers.  

(7)

Reflects interest rate hedges recoverable from or refundable to customers. Certain of these instruments are settled and any related payments are being amortized into interest expense over the life of the related debt, which has a weighted-average useful life of approximately 24 years as of September 30, 2022.

(8)

Rates charged to customers by Virginia Power's regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.

(9)

Reflects amounts to be refunded to jurisdictional retail electric customers in Virginia associated with the settlement of the 2021 Triennial Review. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021 for additional information.  

(10)

Amounts recorded to pass the effect of reduced income taxes from the 2017 Tax Reform Act to customers in future periods, which will reverse at the weighted average tax rate that was used to build the reserves over the remaining book life of the property, net of amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC equity.  

(11)

Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon) for the future decommissioning of Virginia Power’s utility nuclear generation stations, in excess of the related AROs.