Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income tax expense for continuing operations including noncontrolling interests

Continuing Operations

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

	Dominion Energy									Virginia Power									Dominion Energy Gas
Year Ended December 31,	2019			2018			2017			2019			2018			2017			2019			2018			2017
(millions)
Current:
Federal	$	32		$	(45	)	$	(1	)	$	286		$	36		$	432		$	130		$	(227	)	$	75
State		103			108			(26	)		58			40			73			17			31			13
Total current expense (benefit)		135			63			(27	)		344			76			505			147			(196	)		88
Deferred:
Federal
2017 Tax Reform Act impact(1)		—			46			(851	)		—			21			(93	)		—			(6	)		(246	)
Taxes before operating loss carryforwards, investment tax credits and tax reform		182			436			739			(128	)		199			319			(36	)		343			88
Tax utilization expense (benefit) of operating loss carryforwards		119			92			174			—			—			4			—			—			—
Investment tax credits		(51	)		(56	)		(200	)		(34	)		(51	)		(23	)		—			—			—
State		(93	)		(1	)		132			22			55			59			(10	)		(17	)		5
Total deferred expense (benefit)		157			517			(6	)		(140	)		224			266			(46	)		320			(153	)
Investment tax credit-gross deferral		62			2			5			62			2			5			—			—			—
Investment tax credit-amortization		(3	)		(2	)		(2	)		(2	)		(2	)		(2	)		—			—			—
Total income tax expense (benefit)	$	351		$	580		$	(30	)	$	264		$	300		$	774		$	101		$	124		$	(65	)

(1) The 2017 Tax Reform Act impact for Dominion Energy Gas includes an expense of $8 million for the year ended December 31, 2018 and a benefit of $93 million for the year ended December 31, 2017 arising from discontinued operations.

Effective Income Tax

For continuing operations including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to the Companies’ effective income tax rate as follows:

	Dominion Energy									Virginia Power									Dominion Energy Gas
Year Ended December 31,	2019			2018			2017			2019			2018			2017			2019			2018			2017
U.S. statutory rate		21.0	%		21.0	%		35.0	%		21.0	%		21.0	%		35.0	%		21.0	%		21.0	%		35.0	%
Increases (reductions) resulting from:
State taxes, net of federal benefit		1.3			3.0			2.0			4.5			4.7			3.7			2.5			3.2			2.6
Investment tax credits		(5.7	)		(1.9	)		(6.3	)		(2.9	)		(3.5	)		(0.8	)		—			—			—
Production tax credits		(1.1	)		(0.7	)		(0.7	)		(0.7	)		(0.7	)		(0.4	)		—			—			—
Valuation allowances		0.1			0.3			0.2			—			—			—			(0.2	)		—			0.3
Reversal of excess deferred income taxes		(2.0	)		(2.0	)		—			(3.1	)		(3.2	)		—			(0.8	)		(0.6	)		—
Federal legislative change		—			1.5			(27.5	)		—			1.3			(4.0	)		—			(0.5	)		(41.0	)
State legislative change		—			(0.6	)		—			—			—			—			—			(2.0	)		(0.7	)
Write-off of regulatory assets		10.9			—			—			—			—			—			—			—			—
Change in tax status		(2.8	)		—			—			—			—			—			(6.0	)		—			—
AFUDC—equity		(1.8	)		(0.8	)		(1.4	)		—			(0.5	)		(0.6	)		(0.5	)		(0.3	)		(0.9	)
Employee stock ownership plan deduction		(0.7	)		(0.4	)		(0.6	)		—			—			—			—			—			—
Other, net		1.1			(0.9	)		(1.7	)		(0.2	)		(0.1	)		0.6			(3.4	)(1)		(4.4	)(1)		(6.0	)(1)
Effective tax rate		20.3	%		18.5	%		(1.0	)%		18.6	%		19.0	%		33.5	%		12.6	%		16.4	%		(10.7	)%

(1) Includes (3.2)%, (4.6)% and (6.7)% relating to the absence of tax on noncontrolling interest in 2019, 2018 and 2017, respectively.

Deferred income taxes components

The Companies’ deferred income taxes consist of the following:

	Dominion Energy						Virginia Power						Dominion Energy Gas
At December 31,	2019			2018			2019			2018			2019			2018
(millions)
Deferred income taxes:
Total deferred income tax assets	$	3,736		$	2,748		$	1,207			$   1,054			$   206		$	296
Total deferred income tax liabilities		9,883			7,813			4,058			4,020			1,494			1,626
Total net deferred income tax liabilities	$	6,147		$	5,065		$	2,851			$2,966			$1,288		$	1,330
Total deferred income taxes:
Plant and equipment, primarily depreciation method and basis differences	$	6,616		$	4,933		$	3,359		$	3,367		$	742		$	671
Excess deferred income taxes		(1,306	)		(993	)		(672	)		(678	)		(149	)		(156	)
Unrecovered NND Project costs		553			—			—			—			—			—
DESC rate refund		(169	)		—			—			—			—			—
Toshiba Settlement		(219	)		—			—			—			—			—
Nuclear decommissioning		909			815			290			273			—			—
Deferred state income taxes		863			626			302			284			199			203
Federal benefit of deferred state income taxes		(184	)		(132	)		(63	)		(60	)		(42	)		(43	)
Deferred fuel, purchased energy and gas costs		30			60			1			59			—			(1	)
Pension benefits		174			81			(153	)		(132	)		154			134
Other postretirement benefits		(37	)		(5	)		62			55			(6	)		(3	)
Loss and credit carryforwards		(1,832	)		(1,546	)		(280	)		(183	)		(1	)		(5	)
Valuation allowances		161			158			5			5			1			6
Partnership basis differences		823			1,135			—			—			423			570
Other		(235	)		(67	)		—			(24	)		(33	)		(46	)
Total net deferred income tax liabilities	$	6,147		$	5,065		$	2,851			$2,966			$1,288		$	1,330
Deferred Investment Tax Credits – Regulated Operations		130			51			111			51			—			—
Total Deferred Taxes and Deferred Investment Tax Credits	$	6,277		$	5,116		$	2,962			$3,017			$1,288		$	1,330

Summary of deductible loss and credit carryforwards

At December 31, 2019, Dominion Energy had the following deductible loss and credit carryforwards:

	Deductible Amount		Deferred Tax Asset		Valuation Allowance			Expiration Period
(millions)
Federal losses		$   1,361	$	286		$    —			2037
Federal investment credits		—		922		—			2035-2039
Federal production credits		—		126		—			2035-2039
Other federal credits		—		40		—			2035-2038
State losses		3,074		173		(57	)		2020-2038
State minimum tax credits		—		165		—			No expiration
State investment and other credits		—		144		(98	)		2020-2031
Total		$4,435	$	1,856		$(155)

At December 31, 2019, Virginia Power had the following deductible loss and credit carryforwards:

	Deductible Amount		Deferred Tax Asset		Valuation Allowance			Expiration Period
(millions)
Federal investment credits		$ —		$ 213		$ —			2035-2039
Federal production and other credits		—		58		—			2035-2039
State investment credits		—		9		(5	)		2024
Total		$ —		$ 280		$ (5	)

Reconciliation of changes in unrecognized tax benefits

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

	Dominion Energy									Virginia Power									Dominion Energy Gas
	2019			2018			2017			2019			2018			2017			2019		2018		2017
(millions)
Balance at January 1	$	44		$	38		$	64		$	2		$	4		$	13			$2	$	2		$9
Acquired unrecognized tax benefits		129	(1)		—			—			—			—			—			—		—		—
Increases-prior period positions		—			10			1			—			—			—			—		—		—
Decreases-prior period positions		—			—			(9	)		—			—			(1	)		—		—		—
Increases-current period positions		9			10			5			—			—			—			—		—		—
Settlements with tax authorities		(7	)		(6	)		(23	)		(2	)		(1	)		(8	)		—		—		(7	)
Expiration of statutes of limitations		—			(8	)		—			—			(1	)		—			—		—		—
Balance at December 31	$	175		$	44		$	38		$	—		$	2		$	4			$2	$	2		$2

(1) Acquired unrecognized tax benefits reflect $106 million plus increases in prior period positions of $76 million and decreases in prior period positions of $53 million that were recorded through purchase accounting.

Earliest tax year remaining

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

State	Earliest Open Tax Year
Pennsylvania(1)		2012
Connecticut		2016
Virginia(2)		2016
West Virginia(1)		2016
New York(1)		2015
Utah		2016
South Carolina		2012