Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Expense (Benefit) [Abstract]

Income tax expense for continuing operations including noncontrolling interests

Details of income tax expense for continuing operations including noncontrolling interests were as follows:

	Dominion(1)									Virginia Power(2)
Year Ended December 31,	2012			2011			2010			2012			2011			2010
(millions)
Current:
Federal	$	(117	)	$	3		$	894		$	70		$	(35	)	$	(78	)
State	80			9			309			81			79			10
Total current expense (benefit)	(37		)	12			1,203			151			44			(68		)
Deferred:
Federal	214			694			818			482			484			537
State	(30		)	50			93			21			13			74
Total deferred expense	184			744			911			503			497			611
Amortization of deferred investment tax credits	(1		)	(2		)	(2		)	(1		)	(1		)	(1		)
Total income tax expense	$	146		$	754		$	2,112		$	653		$	540		$	542

(1) In 2012, Dominion's current federal income tax benefit includes a benefit related to the carryback of its current year operating loss, and deferred state income tax benefit reflects the impact of Brayton Point, Kincaid and Kewaunee impairment charges. In 2011, Dominion's federal income tax expense includes a benefit related to its current year operating loss that is expected to be used in future years, and state income tax expense reflects changes in the amount of income apportioned among states, higher tax credits, claims for refunds and previously unrecognized tax benefits due to the expiration of statutes of limitations.

(2) In 2011, Virginia Power's federal income tax expense includes a benefit related to a portion of its current year operating loss that is expected to be used in future years. Also, in 2011 and 2010, Virginia Power's federal income tax expense reflects the amounts of current year operating losses realized through its participation in a tax sharing agreement with Dominion and its subsidiaries.

Effective income tax

For continuing operations including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to Dominion's and Virginia Power's effective income tax rate as follows:

	Dominion						Virginia Power
Year Ended December 31,	2012		2011		2010		2012		2011		2010
U.S. statutory rate	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%
Increases (reductions) resulting from:
State taxes, net of federal benefit	8.1		1.8		5.1		3.9		4.4		3.8
Valuation allowances	(1.5	)	—		(0.2	)	—		—		—
Production tax credits	(2.4	)	(0.6	)	(0.3	)	—		—		—
Amortization of investment tax credits	(0.3	)	(0.1	)	—		(0.1	)	(0.1	)	(0.1	)
AFUDC - equity	(4.1	)	(0.6	)	(0.4	)	(0.9	)	(0.8	)	(1.1	)
Employee stock ownership plan deduction	(3.1	)	(0.7	)	(0.3	)	—		—		—
Goodwill	0.4		—		0.9		—		—		—
Legislative change	—		—		1.1		—		—		1.1
Other, net	(2.8	)	(0.6	)	(0.2	)	0.4		1.2		0.2
Effective tax rate	29.3	%	34.2	%	40.7	%	38.3	%	39.7	%	38.9	%

The Companies deferred income taxes components

The Companies' deferred income taxes consist of the following:

	Dominion						Virginia Power
At December 31,	2012			2011			2012			2011
(millions)
Deferred income taxes:
Total deferred income tax assets	$	2,505		$	2,229		$	466		$	503
Total deferred income tax liabilities	7,716			7,424			4,238			3,759
Total net deferred income tax liabilities	$	5,211		$	5,195		$	3,772		$	3,256
Total deferred income taxes:
Plant and equipment, primarily depreciation method and basis differences	$	4,601		$	4,008		$	3,394		$	2,758
Nuclear decommissioning	994			913			407			374
Deferred state income taxes	474			493			265			243
Federal benefit of deferred state income taxes	(166		)	(173		)	(93		)	(85		)
Deferred fuel, purchased energy and gas costs	3			161			(16		)	144
Pension benefits	231			396			(17		)	8
Other postretirement benefits	(171		)	(167		)	(7		)	(13		)
Loss and credit carryforwards	(656		)	(577		)	(77		)	(55		)
Reserve for rate proceedings	—			(54		)	—			(54		)
Partnership basis differences	174			274			—			—
Valuation allowances	93			96			—			—
Other	(366		)	(175		)	(84		)	(64		)
Total net deferred income tax liabilities	$	5,211		$	5,195		$	3,772		$	3,256

Reconciliation of changes in the Companies unrecognized tax benefits

A reconciliation of changes in the Companies' unrecognized tax benefits follows:

	Dominion									Virginia Power
	2012			2011			2010			2012			2011			2010
(millions)
Balance at January 1	$	347		$	307		$	291		$	114		$	117		$	121
Increases-prior period positions	28			127			34			4			22			4
Decreases-prior period positions	(106		)	(119		)	(75		)	(80		)	(51		)	(33		)
Increases-current period positions	43			64			61			24			47			25
Decreases-current period positions	—			(21		)	—			—			(21		)	—
Settlements with tax authorities	(4		)	—			—			(4		)	—			—
Expiration of statutes of limitation	(15		)	(11		)	(4		)	(1		)	—			—
Balance at December 31	$	293		$	347		$	307		$	57		$	114		$	117

Earliest tax year remaining

For each of the major states in which Dominion operates, the earliest tax year remaining open for examination is as follows:

State	Earliest Open Tax Year
Pennsylvania	2009
Connecticut	2009
Massachusetts	2008
Virginia(1)	2009
West Virginia	2009

(1) Virginia is the only state considered major for Virginia Power's operations.