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Regulatory Assets and Liabilities
12 Months Ended
Dec. 31, 2022
Regulated Operations [Abstract]  
Regulatory Assets and Liabilities

NOTE 12. REGULATORY ASSETS AND LIABILITIES

Regulatory assets and liabilities include the following:

 

 

Dominion Energy

 

 

Virginia Power

 

At December 31,

 

2022

 

 

2021

 

 

2022

 

 

2021

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

Dominion Energy

 

 

 

 

 

 

 

 

 

 

 

 

Regulatory assets:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred cost of fuel used in electric generation(1)

 

$

603

 

 

$

251

 

 

$

133

 

 

$

131

 

Deferred rider costs for Virginia electric utility(2)

 

 

152

 

 

 

72

 

 

 

152

 

 

 

72

 

Ashpond and landfill closure costs(3)

 

 

221

 

 

 

193

 

 

 

221

 

 

 

193

 

Deferred nuclear refueling outage costs(4)

 

 

83

 

 

 

79

 

 

 

83

 

 

 

79

 

NND Project costs(5)

 

 

138

 

 

 

138

 

 

 

 

 

 

 

Deferred early plant retirement charges(6)

 

 

226

 

 

 

226

 

 

 

226

 

 

 

226

 

Derivatives(7)

 

 

256

 

 

 

112

 

 

 

251

 

 

 

105

 

Other

 

 

204

 

 

 

152

 

 

 

74

 

 

 

44

 

Regulatory assets-current

 

 

1,883

 

 

 

1,223

 

 

 

1,140

 

 

 

850

 

Unrecognized pension and other postretirement benefit costs(8)

 

 

891

 

 

 

488

 

 

 

4

 

 

 

3

 

Deferred rider costs for Virginia electric utility(2)

 

 

363

 

 

 

489

 

 

 

363

 

 

 

489

 

Interest rate hedges(9)

 

 

169

 

 

 

899

 

 

 

 

 

 

604

 

AROs and related funding(10)

 

 

380

 

 

 

311

 

 

 

 

 

 

 

NND Project costs(5)

 

 

2,088

 

 

 

2,226

 

 

 

 

 

 

 

Ash pond and landfill closure costs(3)

 

 

2,051

 

 

 

2,223

 

 

 

2,049

 

 

 

2,223

 

Deferred cost of fuel used in electric generation(1)

 

 

1,551

 

 

 

409

 

 

 

1,551

 

 

 

409

 

Deferred early plant retirement charges(6)

 

 

 

 

 

226

 

 

 

 

 

 

226

 

Derivatives(7)

 

 

254

 

 

 

34

 

 

 

148

 

 

 

34

 

Other

 

 

518

 

 

 

581

 

 

 

132

 

 

 

142

 

Regulatory assets-noncurrent

 

 

8,265

 

 

 

7,886

 

 

 

4,247

 

 

 

4,130

 

Total regulatory assets

 

$

10,148

 

 

$

9,109

 

 

$

5,387

 

 

$

4,980

 

Regulatory liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Provision for future cost of removal and AROs(11)

 

 

111

 

 

 

154

 

 

 

111

 

 

 

154

 

Reserve for refunds and rate credits to electric utility
   customers
(12)

 

 

125

 

 

 

420

 

 

 

25

 

 

 

306

 

Income taxes refundable through future rates(13)

 

 

100

 

 

 

106

 

 

 

65

 

 

 

63

 

Monetization of guarantee settlement(14)

 

 

67

 

 

 

67

 

 

 

 

 

 

 

Derivatives(7)

 

 

211

 

 

 

65

 

 

 

176

 

 

 

51

 

Other

 

 

134

 

 

 

77

 

 

 

129

 

 

 

73

 

Regulatory liabilities-current

 

 

748

 

 

 

889

 

 

 

506

 

 

 

647

 

Income taxes refundable through future rates(13)

 

 

3,169

 

 

 

3,304

 

 

 

2,272

 

 

 

2,335

 

Provision for future cost of removal and AROs(11)

 

 

1,731

 

 

 

1,624

 

 

 

1,135

 

 

 

1,043

 

Nuclear decommissioning trust(15)

 

 

1,685

 

 

 

2,158

 

 

 

1,685

 

 

 

2,158

 

Monetization of guarantee settlement(14)

 

 

702

 

 

 

831

 

 

 

 

 

 

 

Interest rate hedges(9)

 

 

240

 

 

 

 

 

 

240

 

 

 

 

Reserve for refunds and rate credits to electric utility
   customers
(12)

 

 

325

 

 

 

448

 

 

 

 

 

 

25

 

Unrecognized pension and other postretirement benefit costs(8)

 

 

10

 

 

 

189

 

 

 

 

 

 

 

Overrecovered other postretirement benefit costs(16)

 

 

140

 

 

 

105

 

 

 

 

 

 

 

Derivatives(7)

 

 

234

 

 

 

236

 

 

 

 

 

 

62

 

Other

 

 

181

 

 

 

129

 

 

 

167

 

 

 

117

 

Regulatory liabilities-noncurrent

 

 

8,417

 

 

 

9,024

 

 

 

5,499

 

 

 

5,740

 

Total regulatory liabilities

 

$

9,165

 

 

$

9,913

 

 

$

6,005

 

 

$

6,387

 

 

(1)
Reflects deferred fuel expenses for the Virginia and North Carolina jurisdictions of Virginia Power's electric generation operations and additionally for Dominion Energy, deferred fuel expenses for the South Carolina jurisdiction of its electric generation operations. Dominion Energy reflects a $66 million reduction recorded in 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)
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 in Virginia 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.
(4)
Legislation in Virginia 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 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.
(6)
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 for additional information.
(7)
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.
(8)
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. Includes regulatory assets of $302 million and $25 million and regulatory liabilities of $6 million and $20 million in aggregate at December 31, 2022 and 2021, respectively, related to retained pension and other postretirement benefit plan assets and obligations for the East Ohio, PSNC and Questar Gas Transactions which will be reclassified to AOCI upon closing of each transaction.
(9)
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 and 24 years for Dominion Energy and Virginia Power, respectively, as of December 31, 2022.
(10)
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.
(11)
Rates charged to customers by Dominion Energy and 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.
(12)
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. 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 for additional information.
(13)
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.
(14)
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.
(15)
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 Virginia Power's utility nuclear generation stations, in excess of the related AROs.
(16)
Reflects a regulatory liability for the collection of postretirement benefit costs allowed in rates in excess of expense incurred.

At December 31, 2022, Dominion Energy and Virginia Power regulatory assets include $4.4 billion and $2.7 billion, respectively, on which they do not expect to earn a return during the applicable recovery period. With the exception of certain items discussed above, the majority of these expenditures are expected to be recovered within the next two years.