Operating Segments

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Operating Segments

Note 22. Operating Segments

The Companies are organized primarily on the basis of products and services sold in the U.S. A description of the operations included in the Companies’ primary operating segments is as follows:

Primary Operating Segment	Description of Operations	Dominion Energy	Virginia Power	Dominion Energy Gas
Power Delivery	Regulated electric distribution	X	X
	Regulated electric transmission	X	X
Power Generation	Regulated electric generation fleet	X	X
	Merchant electric generation fleet	X
Gas Infrastructure	Gas transmission and storage	X		X
	Gas distribution and storage	X		X
	Gas gathering and processing	X		X
	LNG terminalling and storage	X
	Nonregulated retail energy marketing	X
Southeast Energy	Regulated electric distribution	X
	Regulated electric transmission	X
	Regulated electric generation fleet	X
	Gas distribution and storage	X
	Nonregulated retail energy marketing	X

In addition to the operating segments above, the Companies also report a Corporate and Other segment.

Dominion Energy

The Corporate and Other Segment of Dominion Energy includes its corporate, service company and other functions (including unallocated debt). In addition, Corporate and Other includes specific items attributable to Dominion Energy’s operating segments that are not included in profit measures evaluated by executive management in assessing the segments’ performance or in allocating resources.

In the nine months ended September 30, 2019, Dominion Energy reported after-tax net expenses of $2.1 billion for specific items in the Corporate and Other segment, with $2.0 billion of net expenses attributable to its operating segments. In the nine months ended September 30, 2018, Dominion Energy reported after-tax net expenses of $253 million for specific items in the Corporate and Other segment, with $188 million of net expenses attributable to its operating segments.

The net expense for specific items attributable to Dominion Energy’s operating segments in 2019 primarily related to the impact of the following items:

• A $1.0 billion ($760 million after-tax) charge for refunds of amounts previously collected primarily from retail electric customers of DESC for the NND Project, attributable to Southeast Energy;

• $570 million ($429 million after-tax) of merger and integration-related costs associated with the SCANA Combination, including a $444 million ($332 million after-tax) charge related to a voluntary retirement program, attributable to:

• Power Delivery ($77 million after-tax);

• Power Generation ($110 million after-tax);

• Gas Infrastructure ($82 million after-tax); and

• Southeast Energy ($160 million after-tax);

• A $369 million ($275 million after-tax) charge related to the early retirement of certain Virginia Power electric generation facilities, attributable to Power Generation;

• $316 million ($237 million after-tax) of charges associated with litigation acquired in the SCANA Combination, attributable to Southeast Energy;

• A $198 million tax charge for $264 million of income tax-related regulatory assets acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery, attributable to Southeast Energy;

• A $160 million ($119 million after-tax) charge related to Virginia Power’s planned early retirement of certain automated meter reading infrastructure, attributable to Power Delivery;

• A $135 million ($100 million after-tax) charge related to Virginia Power’s contract termination with a non-utility generator, attributable to Power Generation; and

• A $114 million ($86 million after-tax) charge for property, plant and equipment acquired in the SCANA Combination primarily for which Dominion Energy committed to forgo recovery, attributable to Southeast Energy; partially offset by

• A $364 million ($272 million after-tax) net gain related to investments in nuclear decommissioning trust funds, attributable to Power Generation; and

• A $113 million ($84 million after-tax) benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019, attributable to Power Generation.

The net expense for specific items attributable to Dominion Energy’s operating segments in 2018 primarily related to the impact of the following items:

• A $215 million ($160 million after-tax) charge associated with Virginia legislation enacted in March 2018 that requires one-time rate credits of certain amounts to utility customers, attributable to:

• Power Generation ($109 million after-tax); and

• Power Delivery ($51 million after-tax);

• A $156 million ($121 million after-tax) increased net investment earnings on nuclear decommissioning trust funds attributable to Power Generation;

• A $124 million ($88 million after-tax) charge for disallowance of FERC-regulated plant, attributable to Gas Infrastructure; and

• An $81 million ($60 million after-tax) charge associated primarily with the asset retirement obligations for ash ponds and landfills at certain utility generation facilities in connection with the enactment of Virginia legislation in April 2018 attributable to Power Generation.

The following table presents segment information pertaining to Dominion Energy’s operations:

	Power Delivery		Power Generation		Gas Infrastructure		Southeast Energy		Corporate and Other			Adjustments/ Eliminations			Consolidated Total
(millions)
Three Months Ended September 30, 2019
Total revenue from external customers	$	678	$	1,848	$	788	$	973	$	(18	)	$	—		$	4,269
Intersegment revenue		5		6		28		—		164			(203	)		—
Total operating revenue		683		1,854		816		973		146			(203	)		4,269
Net income (loss) attributable to Dominion    Energy		185		490		232		147		(79	)		—			975
Three Months Ended September 30, 2018
Total revenue from external customers	$	596	$	2,021	$	836			$	—		$	(2	)	$	3,451
Intersegment revenue		5		3		7				160			(175	)		—
Total operating revenue		601		2,024		843				160			(177	)		3,451
Net income attributable to Dominion    Energy		163		414		264				13			—			854
Nine Months Ended September 30, 2019
Total revenue from external customers	$	1,861	$	5,191	$	3,042	$	3,070	$	(1,067	)	$	—		$	12,097
Intersegment revenue		17		15		83		—		611			(726	)		—
Total operating revenue		1,878		5,206		3,125		3,070		(456	)		(726	)		12,097
Net income (loss) attributable to Dominion    Energy		496		1,048		838		361		(2,394	)		—			349
Nine Months Ended September 30, 2018
Total revenue from external customers	$	1,687	$	5,516	$	2,972			$	(210	)	$	40		$	10,005
Intersegment revenue		17		8		21				505			(551	)		—
Total operating revenue		1,704		5,524		2,993				295			(511	)		10,005
Net income (loss) attributable to Dominion    Energy		464		1,038		840				(536	)		—			1,806

Intersegment sales and transfers for Dominion Energy are based on contractual arrangements and may result in intersegment profit or loss that is eliminated in consolidation.

Virginia Power

The Corporate and Other Segment of Virginia Power primarily includes specific items attributable to its operating segments that are not included in profit measures evaluated by executive management in assessing the segments' performance or in allocating resources.

In the nine months ended September 30, 2019, Virginia Power reported after-tax net expenses of $673 million for specific items in the Corporate and Other segment, with $653 million of net expenses attributable to its operating segments. In the nine months ended September 30, 2018, Virginia Power reported after-tax net expenses of $229 million for specific items in the Corporate and Other segment, with $226 million of net expenses attributable to its operating segments.

The net expense for specific items attributable to Virginia Power’s operating segments in 2019 primarily related to the impact of the following items:

• A $369 million ($275 million after-tax) charge related to the early retirement of certain electric generation facilities, attributable to Power Generation;

• A $197 million ($146 million after-tax) charge related to a voluntary retirement program, attributable to:

• Power Delivery ($74 million after-tax); and

• Power Generation ($72 million after-tax);

• A $160 million ($119 million after-tax) charge related to the planned early retirement of certain automated meter reading infrastructure, attributable to Power Delivery;

• A $135 million ($100 million after-tax) charge related to a contract termination with a non-utility generator, attributable to Power Generation; and

• A $62 million ($46 million after-tax) charge related the abandonment of a project at an electric generating facility, attributable to Power Generation; partially offset by

• A $113 million ($84 million after-tax) benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019, attributable to Power Generation.

The net expense for specific items attributable to Virginia Power’s operating segments in 2018 primarily related to the impact of the following items:

• A $215 million ($160 million after-tax) charge associated with Virginia legislation enacted in March 2018 that requires one-time rate credits of certain amounts to utility customers, attributable to:

• Power Generation ($109 million after-tax); and

• Power Delivery ($51 million after-tax); and

• An $81 million ($60 million after-tax) charge associated primarily with the asset retirement obligations for ash ponds and landfills at certain utility generation facilities in connection with the enactment of Virginia legislation in April 2018 attributable to Power Generation.

The following table presents segment information pertaining to Virginia Power’s operations:

	Power Delivery		Power Generation		Corporate and Other			Consolidated Total
(millions)
Three Months Ended September 30, 2019
Operating revenue	$	677	$	1,587	$	—		$	2,264
Net income (loss)		184		444		(26	)		602
Three Months Ended September 30, 2018
Operating revenue	$	595	$	1,637	$	—		$	2,232
Net income		163		347		10			520
Nine Months Ended September 30, 2019
Operating revenue	$	1,860	$	4,336	$	(29	)	$	6,167
Net income (loss)		494		885		(657	)		722
Nine Months Ended September 30, 2018
Operating revenue	$	1,686	$	4,338	$	(215	)	$	5,809
Net income (loss)		462		796		(215	)		1,043

Dominion Energy Gas

The Corporate and Other Segment of Dominion Energy Gas primarily includes specific items attributable to Dominion Energy Gas’ operating segment that are not included in profit measures evaluated by executive management in assessing the segment’s performance or in allocating resources and the effect of certain items recorded at Dominion Energy Gas as a result of Dominion Energy’s basis in the net assets contributed.

In the nine months ended September 30, 2019, Dominion Energy Gas reported after-tax net expenses of $53 million for specific items in the Corporate and Other segment, all of which are attributable to its operating segment.  In the nine months ended September 30, 2018, Dominion Energy Gas reported after-tax net expenses of $100 million for specific items in the Corporate and Other segment, with $99 million of net expenses attributable to its operating segment.

The net expense for specific items attributable to Dominion Energy Gas’ operating segment in 2019 primarily related to a $63 million ($48 million after-tax) charge related to a voluntary retirement program, attributable to Gas Infrastructure.

The net expense for specific items attributable to Dominion Energy Gas’ operating segment in 2018 primarily related to a $124 million ($88 million after-tax) charge for disallowance of FERC-regulated plant, attributable to Gas Infrastructure.

The following table presents segment information pertaining to Dominion Energy Gas’ operations:

	Gas Infrastructure		Corporate and Other			Consolidated Total
(millions)
Three Months Ended September 30, 2019
Operating revenue	$	392	$	—		$	392
Net income (loss)		100		(8	)		92
Three Months Ended September 30, 2018
Operating revenue	$	423	$	—		$	423
Net income (loss)		146		(10	)		136
Nine Months Ended September 30, 2019
Operating revenue	$	1,314	$	(11	)	$	1,303
Net income (loss)		316		(61	)		255
Nine Months Ended September 30, 2018
Operating revenue	$	1,408	$	—		$	1,408
Net income (loss)		421		(104	)		317