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Investments
 9 Months Ended
Sep. 30, 2017
Investments Debt And Equity Securities [Abstract]  
Investments

Note 10. Investments

Dominion Energy

Equity and Debt Securities

Rabbi Trust Securities

Marketable equity and debt securities and cash equivalents held in Dominion Energy’s rabbi trusts and classified as trading totaled $109 million and $104 million at September 30, 2017 and December 31, 2016, respectively.

 

Decommissioning Trust Securities

Dominion Energy holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Dominion Energy’s decommissioning trust funds are summarized below:

 

 

 

Amortized

Cost

 

 

Total

Unrealized

Gains(1)

 

 

Total

Unrealized

Losses(1)

 

 

 

Fair Value

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

1,562

 

 

$

1,664

 

 

$

—

 

 

 

$

3,226

 

Fixed income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt instruments

 

 

438

 

 

 

15

 

 

 

(1

)

 

 

 

452

 

Government securities

 

 

1,041

 

 

 

28

 

 

 

(4

)

 

 

 

1,065

 

Common/collective trust funds

 

 

66

 

 

 

—

 

 

 

—

 

 

 

 

66

 

Cost method investments

 

 

67

 

 

 

—

 

 

 

—

 

 

 

 

67

 

Cash equivalents and other(2)

 

 

5

 

 

 

—

 

 

 

—

 

 

 

 

5

 

Total

 

$

3,179

 

 

$

1,707

 

 

$

(5

)

(3)

 

$

4,881

 

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

1,449

 

 

$

1,408

 

 

$

—

 

 

 

$

2,857

 

Fixed income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt instruments

 

 

478

 

 

 

13

 

 

 

(4

)

 

 

 

487

 

Government securities

 

 

978

 

 

 

22

 

 

 

(8

)

 

 

 

992

 

Common/collective trust funds

 

 

67

 

 

 

—

 

 

 

—

 

 

 

 

67

 

Cost method investments

 

 

69

 

 

 

—

 

 

 

—

 

 

 

 

69

 

Cash equivalents and other(2)

 

 

12

 

 

 

—

 

 

 

—

 

 

 

 

12

 

Total

 

$

3,053

 

 

$

1,443

 

 

$

(12

)

(3)

 

$

4,484

 

(1)

Included in AOCI and the nuclear decommissioning trust regulatory liability.

(2)

Includes net pending sales of securities of $4 million and $9 million at September 30, 2017 and December 31, 2016, respectively.

(3)

The fair value of securities in an unrealized loss position was $402 million and $576 million at September 30, 2017 and December 31, 2016, respectively.

 

The fair value of Dominion Energy’s marketable debt securities held in nuclear decommissioning trust funds at September 30, 2017 by contractual maturity is as follows:

 

 

 

Amount

 

(millions)

 

 

 

 

Due in one year or less

 

$

183

 

Due after one year through five years

 

 

410

 

Due after five years through ten years

 

 

366

 

Due after ten years

 

 

624

 

Total

 

$

1,583

 

 

Presented below is selected information regarding Dominion Energy’s marketable equity and debt securities held in nuclear decommissioning trust funds.

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sales

 

$

377

 

 

$

300

 

 

$

1,496

 

 

$

1,009

 

Realized gains(1)

 

 

25

 

 

 

40

 

 

 

142

 

 

 

102

 

Realized losses(1)

 

 

16

 

 

 

9

 

 

 

52

 

 

 

43

 

(1)

Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.

Dominion Energy recorded other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds as follows:

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total other-than-temporary impairment losses(1)

 

$

7

 

 

$

9

 

 

$

33

 

 

$

34

 

Losses recorded to the nuclear decommissioning trust

   regulatory liability

 

 

(2

)

 

 

(4

)

 

 

(13

)

 

 

(15

)

Losses recognized in other comprehensive income

   (before taxes)

 

 

(1

)

 

 

—

 

 

 

(2

)

 

 

(1

)

Net impairment losses recognized in earnings

 

$

4

 

 

$

5

 

 

$

18

 

 

$

18

 

 

(1)

Amounts include other-than-temporary impairment losses for debt securities of less than $1 million for both the three months ended September 2017 and 2016, respectively, and $2 million for both the nine months ended September 30, 2017 and 2016, respectively.

 

Virginia Power

Virginia Power holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power’s decommissioning trust funds are summarized below:

 

 

 

Amortized

Cost

 

 

Total Unrealized

Gains(1)

 

 

Total Unrealized

Losses(1)

 

 

 

Fair Value

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

729

 

 

$

741

 

 

$

—

 

 

 

$

1,470

 

Fixed income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt instruments

 

 

226

 

 

 

8

 

 

 

—

 

 

 

 

234

 

Government securities

 

 

483

 

 

 

13

 

 

 

(2

)

 

 

 

494

 

Common/collective trust funds

 

 

29

 

 

 

—

 

 

 

—

 

 

 

 

29

 

Cost method investments

 

 

67

 

 

 

—

 

 

 

—

 

 

 

 

67

 

Cash equivalents and other(2)

 

 

(2

)

 

 

—

 

 

 

—

 

 

 

 

(2

)

Total

 

$

1,532

 

 

$

762

 

 

$

(2

)

(3)

 

$

2,292

 

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketable equity securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

677

 

 

$

624

 

 

$

—

 

 

 

$

1,301

 

Fixed income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate debt instruments

 

 

274

 

 

 

6

 

 

 

(4

)

 

 

 

276

 

Government securities

 

 

420

 

 

 

9

 

 

 

(2

)

 

 

 

427

 

Common/collective trust funds

 

 

26

 

 

 

—

 

 

 

—

 

 

 

 

26

 

Cost method investments

 

 

69

 

 

 

—

 

 

 

—

 

 

 

 

69

 

Cash equivalents and other(2)

 

 

7

 

 

 

—

 

 

 

—

 

 

 

 

7

 

Total

 

$

1,473

 

 

$

639

 

 

$

(6

)

(3)

 

$

2,106

 

(1)

Included in AOCI and the nuclear decommissioning trust regulatory liability.

(2)

Includes pending purchases of securities of $2 million and pending sales of securities of $7 million at September 30, 2017 and December 31, 2016, respectively.

(3)

The fair value of securities in an unrealized loss position was $165 million and $287 million at September 30, 2017 and December 31, 2016, respectively.

 

The fair value of Virginia Power’s marketable debt securities held in nuclear decommissioning trust funds at September 30, 2017 by contractual maturity is as follows:

 

 

 

Amount

 

(millions)

 

 

 

 

Due in one year or less

 

$

60

 

Due after one year through five years

 

 

192

 

Due after five years through ten years

 

 

189

 

Due after ten years

 

 

316

 

Total

 

$

757

 

 

Presented below is selected information regarding Virginia Power’s marketable equity and debt securities held in nuclear decommissioning trust funds.

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from sales

 

$

156

 

 

$

131

 

 

$

654

 

 

$

478

 

Realized gains(1)

 

 

9

 

 

 

18

 

 

 

64

 

 

 

48

 

Realized losses(1)

 

 

6

 

 

 

4

 

 

 

24

 

 

 

21

 

(1)

Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.

 

Other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds recognized in earnings for Virginia Power were not material for the three and nine months ended September 30, 2017 and 2016.

 

Equity Method Investments

Dominion Energy

Atlantic Coast Pipeline

In October 2016, Dominion Energy purchased an additional 3% membership interest in Atlantic Coast Pipeline from Duke for $14 million, which adjusted Dominion Energy’s and Duke’s membership interest to 48% and 47%, respectively.

Dominion Energy contributed $84 million and $286 million during the three and nine months ended September 30, 2017 and $74 million and $143 million during the three and nine months ended September 30, 2016, respectively, to Atlantic Coast Pipeline.

 

Dominion Energy Gas

Iroquois

Dominion Energy Gas' equity earnings totaled $15 million and $14 million for the nine months ended September 30, 2017 and 2016, respectively. Dominion Energy Gas received distributions from this investment of $17 million for both the nine months ended September 30, 2017 and 2016. At September 30, 2017 and December 31, 2016, the carrying amount of Dominion Energy Gas' investment of $96 million and $98 million, respectively, exceeded its share of underlying equity in net assets by $8 million. The difference reflects equity method goodwill and is not being amortized. In May 2016, Dominion Energy Gas sold 0.65% of the non-controlling partnership interest in Iroquois to TransCanada Corporation for approximately $7 million, which resulted in a $5 million ($3 million after-tax) gain, included in other income in Dominion Energy Gas’ Consolidated Statement of Income.