AROs represent obligations that result from laws, statutes, contracts and regulations related to the eventual retirement of certain of the Companies’ long-lived assets. The Companies’ AROs are primarily associated with the decommissioning of their nuclear generation facilities and ash pond and landfill closures.

The Companies have also identified, but not recognized, AROs related to the retirement of Dominion Energy’s storage wells in its underground natural gas storage network, certain Virginia Power electric transmission and distribution assets located on property with easements, rights of way, franchises and lease agreements, Virginia Power’s hydroelectric generation facilities and the abatement of certain asbestos not expected to be disturbed in the Companies’ generation facilities. The Companies currently do not have sufficient information to estimate a reasonable range of expected retirement dates for any of these assets since the economic lives of these assets can be extended indefinitely through regular repair and maintenance and they currently have no plans to retire or dispose of any of these assets. As a result, a settlement date is not determinable for these assets and AROs for these assets will not be reflected in the Consolidated Financial Statements until sufficient information becomes available to determine a reasonable estimate of the fair value of the activities to be performed. The Companies continue to monitor operational and strategic developments to identify if sufficient information exists to reasonably estimate a retirement date for these assets.

The changes to AROs during 2022 and 2023 were as follows:


(millions)	Dominion Energy			Virginia Power
AROs at December 31, 2021	$	5,333		$	3,923
Obligations incurred during the period		138			132
Obligations settled during the period		(125	)		(155	)
Revisions in estimated cash flows(1)		46			48
Accretion		210			145
Sales of Kewaunee and Hope		(175	)
AROs at December 31, 2022(2)	$	5,427		$	4,093
Obligations incurred during the period		16			9
Obligations settled during the period		(193	)		(169	)
Revisions in estimated cash flows(3)		603			564
Accretion		222			156
AROs at December 31, 2023(2)	$	6,075		$	4,653

(1)

Primarily reflects revisions to asbestos abatement costs associated with the early retirement of certain retired electric generation facilities.

(2)

Includes $365 million and $434 million reported in other current liabilities for Dominion Energy at December 31, 2022 and 2023, respectively.

(3)

Primarily reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities at Virginia Power as discussed below. In addition, Dominion Energy recorded a $48 million increase to its AROs to reflect a revision in the estimated cash flows following the approval of closure plans for a DESC generation facility previously taken out of service. Dominion Energy also recorded a decrease of $125 million to its AROs due to a revision in the timing of expected cash flows associated with the expected approval of a 20-year useful life extension of Millstone Units 2 and 3. Concurrently, Dominion Energy reevaluated its estimated cash flows associated with Millstone Unit 1, which resulted in an increase to its AROs of $83 million. As a result, Dominion Energy recorded a charge of $83 million ($60 million after-tax) within impairment of assets and other charges in its Consolidated Statements of Income (reflected in the Corporate and Other segment).

Dominion Energy’s AROs at December 31, 2023 and 2022, include $1.9 billion and $1.9 billion, respectively, with $1.0 billion and $0.9 billion recorded by Virginia Power, related to the future decommissioning of their nuclear facilities. The Companies have established trusts dedicated to funding the future decommissioning activities. At December 31, 2023 and 2022, the aggregate fair value of Dominion Energy’s trusts, consisting primarily of equity and debt securities, totaled $6.9 billion and $6.0 billion, respectively. At December 31, 2023 and 2022, the aggregate fair value of Virginia Power’s trusts, consisting primarily of debt and equity securities, totaled $3.7 billion and $3.2 billion, respectively.

In addition, AROs at December 31, 2023 and 2022 include $3.4 billion and $2.8 billion, respectively, related to Virginia Power’s future ash pond and landfill closure costs. In 2023, Virginia Power revised its estimated cash flow projections associated with such costs at certain of its utility generation facilities in connection with obtaining replacement contracts for certain services following the bankruptcy of a previous vendor along with general updates of the contractual rates. As a result, Virginia Power recorded an increase to its AROs of $552 million with a corresponding increase of $471 million to regulatory assets for amounts recoverable through riders and $81 million to other deferred charges and other assets for amounts associated with nonjurisdictional customers. Regulatory mechanisms, primarily associated with legislation enacted in Virginia in 2019, provide for recovery of costs to be incurred. See Note 12 for additional information.