Derivatives and Hedge Accounting Activities

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedge Accounting Activities

Note 9. Derivatives and Hedge Accounting Activities

The Companies’ accounting policies, objectives and strategies for using derivative instruments are discussed in Note 2 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2022. See Note 8 in this report for additional information about fair value measurements and associated valuation methods for derivatives.

Cash collateral is used in the table below to offset derivative assets and liabilities. In February 2022, Dominion Energy entered into contracts representing offsetting positions to certain existing exchange contracts with collateral requirements as well as new over-the-counter transactions that are not subject to collateral requirements. These contracts resulted in positions which limit the risk of increased cash collateral requirements. Certain accounts receivable and accounts payable recognized on the Companies’ Consolidated Balance Sheets, letters of credit and other forms of securities, as well as certain other long-term debt, all of which are not included in the tables below, are subject to offset under master netting or similar arrangements and would reduce the net exposure. See Note 18 for additional information regarding credit-related contingent features for the Companies’ derivative instruments.

Balance Sheet Presentation

The tables below present the Companies' derivative asset and liability balances by type of financial instrument, if the gross amounts recognized in their Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid:

	Dominion Energy Gross Amounts Not Offset in the Consolidated Balance Sheet								Virginia Power Gross Amounts Not Offset in the Consolidated Balance Sheet
	Gross Assets Presented in the Consolidated Balance Sheet(1)		Financial Instruments		Cash Collateral Received		Net Amounts		Gross Assets Presented in the Consolidated Balance Sheet(1)		Financial Instruments		Cash Collateral Received		Net Amounts
(millions)
September 30, 2023
Commodity contracts:
Over-the-counter	$	152	$	60	$	—	$	92	$	71	$	37	$	—	$	34
Exchange		47		46		—		1		3		3		—		—
Interest rate contracts:
Over-the-counter		1,301		322		—		979		389		54		—		335
Foreign currency exchange rate contracts:
Over-the-counter		9		9		—		—		9		9		—		—
Total derivatives,    subject to a    master netting    or similar    arrangement	$	1,509	$	437	$	—	$	1,072	$	472	$	103	$	—	$	369
December 31, 2022
Commodity contracts:
Over-the-counter	$	408	$	28	$	—	$	380	$	238	$	7	$	—	$	231
Exchange		160		159		—		1		—		—		—		—
Interest rate contracts:
Over-the-counter		1,407		248		—		1,159		614		38		—		576
Total derivatives,    subject to a    master netting    or similar    arrangement	$	1,975	$	435	$	—	$	1,540	$	852	$	45	$	—	$	807

(1)Excludes derivative assets of $137 million and $201 million at Dominion Energy and $2 million and $30 million at Virginia Power at September 30, 2023 and December 31, 2022, respectively, which are not subject to master netting or other similar arrangements.

	Dominion Energy Gross Amounts Not Offset in the Consolidated Balance Sheet								Virginia Power Gross Amounts Not Offset in the Consolidated Balance Sheet
	Gross Liabilities Presented in the Consolidated Balance Sheet(1)		Financial Instruments		Cash Collateral Paid		Net Amounts		Gross Liabilities Presented in the Consolidated Balance Sheet(1)		Financial Instruments		Cash Collateral Paid		Net Amounts
(millions)
September 30, 2023
Commodity contracts:
Over-the-counter	$	347	$	60	$	—	$	287	$	236	$	37	$	—	$	199
Exchange		141		46		95		—		17		3		14		—
Interest rate contracts:
Over-the-counter		428		268		1		159		—		—		—		—
Foreign currency exchange rate contracts:
Over-the-counter		162		63		—		99		162		63		—		99
Total derivatives,    subject to a    master netting    or similar    arrangement	$	1,078	$	437	$	96	$	545	$	415	$	103	$	14	$	298
December 31, 2022
Commodity contracts:
Over-the-counter	$	443	$	34	$	71	$	338	$	146	$	13	$	71	$	62
Exchange		483		159		324		—		176		—		176		—
Interest rate contracts:
Over-the-counter		377		210		1		166		7		—		—		7
Foreign currency exchange rate contracts:
Over-the-counter		101		32		—		69		101		32		—		69
Total derivatives,    subject to a    master netting    or similar    arrangement	$	1,404	$	435	$	396	$	573	$	430	$	45	$	247	$	138

(1)Excludes derivative liabilities of $55 million and $26 million at Virginia Power at September 30, 2023 and December 31, 2022, respectively, which are not subject to master netting or similar arrangements. Dominion Energy did not have any derivative liabilities at September 30, 2023 and December 31, 2022 which were not subject to master netting or similar arrangements.

Volumes

The following table presents the volume of the Companies' derivative activity at September 30, 2023. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of its long and short positions.

	Dominion Energy				Virginia Power
	Current		Noncurrent		Current		Noncurrent
Natural Gas (bcf):
Fixed price(1)		45		20		35		20
Basis(2)		179		369		149		369
Electricity (MWh in millions):
Fixed price		17		41		8		11
FTRs		62		—		62		—
Interest rate(3) (in millions)	$	300	$	10,121	$	—	$	2,750
Foreign currency exchange rate(3) (in millions)
Danish Krone	895 kr.		3,278 kr.		895 kr.		3,278 kr.
Euro	€806		€1,557		€806		€1,557

(1)Includes options at Dominion Energy.

(2)Includes options.

(3)Maturity is determined based on final settlement period.

AOCI

The following table presents selected information related to gains and losses on cash flow hedges included in AOCI in the Companies' Consolidated Balance Sheets at September 30, 2023:

	Dominion Energy							Virginia Power
	AOCI After-Tax			Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax			Maximum Term	AOCI After-Tax		Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax		Maximum Term
(millions)
Interest rate	$	(209	)	$	(33	)	387 months	$	31	$	—	387 months
Total	$	(209	)	$	(33	)		$	31	$	—

The amounts that will be reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., interest rate payments) in earnings, thereby achieving the realization of prices contemplated by the underlying risk management strategies and will vary from the expected amounts presented above as a result of changes in interest rates.

Fair Value and Gains and Losses on Derivative Instruments

The following table presents the fair values of the Companies' derivatives and where they are presented in their Consolidated Balance Sheets:

	Dominion Energy						Virginia Power
	Fair Value – Derivatives under Hedge Accounting		Fair Value – Derivatives not under Hedge Accounting		Total Fair Value		Fair Value – Derivatives under Hedge Accounting		Fair Value – Derivatives not under Hedge Accounting		Total Fair Value
(millions)
At September 30, 2023
ASSETS
Current Assets
Commodity	$	—	$	159	$	159	$	—	$	46	$	46
Interest rate		—		63		63		—		—		—
Foreign currency exchange rate		—		9		9		—		9		9
Total current derivative assets(1)		—		231		231		—		55		55
Noncurrent Assets
Commodity		—		177		177		—		30		30
Interest rate		389		849		1,238		389		—		389
Total noncurrent derivative assets(2)		389		1,026		1,415		389		30		419
Total derivative assets	$	389	$	1,257	$	1,646	$	389	$	85	$	474
LIABILITIES
Current Liabilities
Commodity	$	—	$	350	$	350	$	—	$	256	$	256
Interest rate		—		65		65		—		—		—
Foreign currency exchange rate		—		54		54		—		54		54
Total current derivative liabilities(3)		—		469		469		—		310		310
Noncurrent Liabilities
Commodity		—		138		138		—		52		52
Interest rate		—		363		363		—		—		—
Foreign currency exchange rate		—		108		108		—		108		108
Total noncurrent derivative liabilities(4)		—		609		609		—		160		160
Total derivative liabilities	$	—	$	1,078	$	1,078	$	—	$	470	$	470
At December 31, 2022
ASSETS
Current Assets
Commodity	$	—	$	532	$	532	$	—	$	264	$	264
Interest rate		501		104		605		501		—		501
Total current derivative assets(1)		501		636		1,137		501		264		765
Noncurrent Assets
Commodity		—		237		237		—		4		4
Interest rate		113		689		802		113		—		113
Total noncurrent derivative assets(2)		113		926		1,039		113		4		117
Total derivative assets	$	614	$	1,562	$	2,176	$	614	$	268	$	882
LIABILITIES
Current Liabilities
Commodity	$	—	$	700	$	700	$	—	$	290	$	290
Interest rate		—		70		70		—		—		—
Foreign currency exchange rate		—		8		8		—		8		8
Total current derivative liabilities(3)		—		778		778		—		298		298
Noncurrent Liabilities
Commodity		—		226		226		—		58		58
Interest rate		7		300		307		7		—		7
Foreign currency exchange rate		—		93		93		—		93		93
Total noncurrent derivative liabilities(4)		7		619		626		7		151		158
Total derivative liabilities	$	7	$	1,397	$	1,404	$	7	$	449	$	456

(1)Includes $10 million and $118 million recorded in current assets held for sale in Dominion Energy's Consolidated Balance Sheets at September 30, 2023 and December 31, 2022, respectively.

(2)Noncurrent derivative assets are presented in other deferred charges and other assets in the Companies’ Consolidated Balance Sheets with the exception of $1 million presented in noncurrent assets held for sale in Dominion Energy’s Consolidated Balance Sheets at December 31, 2022.

(3)Includes $12 million and $6 million recorded in current liabilities held for sale in Dominion Energy's Consolidated Balance Sheets at September 30, 2023 and December 31, 2022, respectively.

(4)Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in the Companies’ Consolidated Balance Sheets with the exception of $1 million presented in noncurrent liabilities held for sale in Dominion Energy’s Consolidated Balance Sheets at December 31, 2022.

The following tables present the gains and losses on the Companies' derivatives, as well as where the associated activity is presented in their Consolidated Balance Sheets and Statements of Income.

	Dominion Energy							Virginia Power
Derivatives in    cash flow    hedging relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives(1)		Amount of Gain (Loss) Reclassified from AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2)		Amount of Gain (Loss) Recognized in AOCI on Derivatives(1)		Amount of Gain (Loss) Reclassified from AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2)
(millions)
Three Months Ended September 30, 2023
Derivative type and location of gains (losses):
Interest rate(3)	$	25	$	(11	)	$	268	$	25	$	(1	)	$	267
Total	$	25	$	(11	)	$	268	$	25	$	(1	)	$	267
Three Months Ended September 30, 2022
Derivative type and location of gains (losses):
Interest rate(3)	$	14		(16	)	$	182	$	18	$	(1	)	$	182
Total	$	14	$	(16	)	$	182	$	18	$	(1	)	$	182
Nine Months Ended September 30, 2023
Derivative type and location of gains (losses):
Interest rate(3)	$	21	$	(32	)	$	236	$	21	$	(1	)	$	235
Total	$	21	$	(32	)	$	236	$	21	$	(1	)	$	235
Nine Months Ended September 30, 2022
Derivative type and location of gains (losses):
Interest rate(3)	$	86	$	(44	)	$	815	$	77	$	(2	)	$	814
Total	$	86	$	(44	)	$	815	$	77	$	(2	)	$	814

(1)Amounts deferred into AOCI have no associated effect in the Companies' Consolidated Statements of Income.

(2)Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in the Companies' Consolidated Statements of Income.

(3)Amounts recorded in the Companies' Consolidated Statement of Income are classified in interest and related charges.

	Amount of Gain (Loss) Recognized in Income on Derivatives(1)(2)
Derivatives not designated as hedging instruments	Dominion Energy												Virginia Power
	Quarter-to-Date						Year-to-Date						Quarter-to-Date						Year-to-Date
Period Ended September 30,	2023			2022			2023			2022			2023			2022			2023			2022
(millions)
Derivative type and location of gains (losses):
Commodity:
Operating revenue	$	7		$	(306	)	$	428		$	(908	)	$	6		$	(108	)	$	25		$	(237	)
Purchased gas		—			1			—			5
Electric fuel and other energy-related     purchases		(149	)		205			(267	)		401			(151	)		166			(270	)		348
Operations and maintenance		—			—			2			—			—			—			2			—
Discontinued operations		—			—			94			1
Interest rate:
Interest and related charges		274			3			227			371
Discontinued operations		(7	)		89			17			257
Total	$	125		$	(8	)	$	501		$	127		$	(145	)	$	58		$	(243	)	$	111

(1)Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in the Companies' Consolidated Statements of Income.

(2)Excludes amounts related to foreign currency exchange rate derivatives that are deferred to plant under construction within property, plant and equipment and regulatory assets/liabilities that will begin to amortize once the CVOW Commercial Project is placed in service.