Note 10. Investments

Dominion Energy

Equity and Debt Securities

Rabbi Trust Securities

Equity and debt securities and cash equivalents in Dominion Energy’s rabbi trusts and classified as trading totaled $114 million and $112 million at March 31, 2018 and December 31, 2017, respectively.

Decommissioning Trust Securities

Dominion Energy holds equity and debt securities, 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		Total Unrealized Losses				Fair Value
(millions)
March 31, 2018
Equity securities:⁽¹⁾
U.S.	$	1,676	$	1,824	$	(15	)		$	3,485
Fixed income securities:⁽²⁾
Corporate debt instruments		442		9		(6	)			445
Government securities		1,061		17		(12	)			1,066
Common/collective trust funds		56		—		—				56
Cash equivalents and other⁽⁴⁾		8		—		—				8
Total	$	3,243	$	1,850	$	(33	)	⁽³⁾	$	5,060
December 31, 2017
Equity securities:⁽²⁾
U.S.	$	1,569	$	1,857	$	—			$	3,426
Fixed income securities:⁽²⁾
Corporate debt instruments		430		15		(1	)			444
Government securities		1,039		27		(5	)			1,061
Common/collective trust funds		60		—		—				60
Cost method investments		68		—		—				68
Cash equivalents and other⁽⁴⁾		34		—		—				34
Total	$	3,200	$	1,899	$	(6	)	⁽³⁾	$	5,093

(1)	Effective January 2018, unrealized gains and losses on equity securities, including those previously classified as cost method investments, are included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.

(2)	Unrealized gains and losses on equity securities (for 2017) and fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability as discussed in Note 2.

(3)	The fair value of securities in an unrealized loss position was $1.1 billion and $565 million at March 31, 2018 and December 31, 2017, respectively.

(4)	Includes pending sales of securities of $3 million and $5 million at March 31, 2018 and December 31, 2017, respectively.

The portion of unrealized gains and losses that relates to equity securities held within Dominion Energy’s nuclear decommissioning trusts is summarized below:

	March 31, 2018
(millions)
Net losses recognized during the period	$	(65	)
Less: Net gains recognized during the period on securities sold during the period		(19	)
Unrealized losses recognized during the period on securities still held at March 31, 2018⁽¹⁾	$	(84	)

(1)	Included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.

The fair value of Dominion Energy’s debt securities with readily determinable fair values held in nuclear decommissioning trust funds at March 31, 2018 by contractual maturity is as follows:

	Amount
(millions)
Due in one year or less	$	165
Due after one year through five years		375
Due after five years through ten years		375
Due after ten years		652
Total	$	1,567

Presented below is selected information regarding Dominion Energy’s equity and debt securities with readily determinable fair values held in nuclear decommissioning trust funds.

	Three Months Ended March 31,
	2018		2017
(millions)
Proceeds from sales	$	419	$	756
Realized gains⁽¹⁾		36		94
Realized losses⁽¹⁾		19		20

(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 Dominion Energy were not material for the three months ended March 31, 2018 and 2017.

Virginia Power

Virginia Power holds equity and debt securities, 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		Total Unrealized Losses				Fair Value
(millions)
March 31, 2018
Equity securities:⁽¹⁾
U.S.	$	828	$	829	$	(9	)		$	1,648
Fixed income securities:⁽²⁾
Corporate debt instruments		219		4		(2	)			221
Government securities		496		8		(5	)			499
Common/collective trust funds		25		—		—				25
Cash equivalents and other⁽⁴⁾		7		—		—				7
Total	$	1,575	$	841	$	(16	)	⁽³⁾	$	2,400
December 31, 2017
Equity securities:⁽²⁾
U.S.	$	734	$	831	$	—			$	1,565
Fixed income securities:⁽²⁾
Corporate debt instruments		216		8		—				224
Government securities		482		13		(2	)			493
Common/collective trust funds		27		—		—				27
Cost method investments		68		—		—				68
Cash equivalents and other⁽⁴⁾		22		—		—				22
Total	$	1,549	$	852	$	(2	)	⁽³⁾	$	2,399

(1)

Effective January 2018, unrealized gains and losses on equity securities, including those previously classified as cost method investments, are included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.

(2)

Unrealized gains and losses on equity securities (for 2017) and fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability as discussed in Note 2.

(3)

The fair value of securities in an unrealized loss position was $510 million and $234 million at March 31, 2018 and December 31, 2017, respectively.

(4)

Includes pending sales of securities of $4 million and $6 million at March 31, 2018 and December 31, 2017, respectively.

The portion of unrealized gains and losses that relates to equity securities held within Virginia Power’s nuclear decommissioning trusts is summarized below:

	March 31, 2018
(millions)
Net losses recognized during the period	$	(32	)
Less: Net gains recognized during the period on securities sold during the period		(15	)
Unrealized losses recognized during the period on securities still held at March 31, 2018⁽¹⁾	$	(47	)

(1)

Included in other income and the nuclear decommissioning trust regulatory liability as discussed in Note 2.

The fair value of Virginia Power’s debt securities with readily determinable fair values held in nuclear decommissioning trust funds at March 31, 2018 by contractual maturity is as follows:

	Amount
(millions)
Due in one year or less	$	43
Due after one year through five years		155
Due after five years through ten years		208
Due after ten years		339
Total	$	745

Presented below is selected information regarding Virginia Power’s equity and debt securities with readily determinable fair values held in nuclear decommissioning trust funds.

	Three Months Ended March 31,
	2018		2017
(millions)
Proceeds from sales	$	218	$	330
Realized gains⁽¹⁾		18		45
Realized losses⁽¹⁾		5		10

(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 months ended March 31, 2018 and 2017.

Equity Method Investments

Dominion Energy

Atlantic Coast Pipeline

Dominion Energy contributed $78 million and $117 million during the three months ended March 31, 2018 and 2017, respectively, to Atlantic Coast Pipeline.

DETI provides services to Atlantic Coast Pipeline which totaled $46 million and $31 million for the three months ended March 31, 2018 and 2017, respectively, included in operating revenue in Dominion Energy and Dominion Energy Gas’ Consolidated Statements of Income. Amounts receivable related to these services were $17 million and $12 million at March 31, 2018 and December 31, 2017, respectively, composed entirely of accrued unbilled revenue, included in other receivables in Dominion Energy’s and Dominion Energy Gas’ Consolidated Balance Sheets.

In October 2017, Dominion Energy entered into a guarantee agreement to support a portion of Atlantic Coast Pipeline’s obligation under its credit facility. See Note 16 for more information.

NedPower

Dominion Energy has a liability of $9 million and $17 million recorded to other deferred credits and other liabilities on the Consolidated Balance Sheets at March 31, 2018 and December 31, 2017, respectively, relating to its commitment to provide further financial support for NedPower.

Dominion Energy Gas

Iroquois

Dominion Energy Gas' equity earnings totaled $9 million and $7 million for the three months ended March 31, 2018 and 2017, respectively. Dominion Energy Gas received distributions of $7 million and $6 million for the three months ended March 31, 2018 and 2017, respectively. At March 31, 2018 and December 31, 2017, the carrying amount of Dominion Energy Gas' investment of $97 million and $95 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.