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Credit Risk
9 Months Ended
Sep. 30, 2020
Risks And Uncertainties [Abstract]  
Credit Risk

Note 18. Credit Risk

The Companies’ accounting policies for credit risk are discussed in Note 24 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2019

At September 30, 2020, Dominion Energy’s gross credit exposure related to energy marketing and price risk management activities totaled $160 million. Of this amount, investment grade counterparties, including those internally rated, represented 94%. No single counterparty, whether investment grade or non-investment grade, exceeded $42 million of exposure. At September 30, 2020, Virginia Power’s exposure related to wholesale customers totaled $10 million. Of this amount, investment grade counterparties, including those internally rated, represented 93%. No single counterparty, whether investment grade or non-investment grade, exceeded $3 million of exposure.

Credit-Related Contingent Provisions

The majority of Dominion Energy’s derivative instruments contain credit-related contingent provisions. These provisions require Dominion Energy to provide collateral upon the occurrence of specific events, primarily a credit rating downgrade. If the credit-related contingent features underlying these instruments that are in a liability position and not fully collateralized with cash were fully triggered as of September 30, 2020 and December 31, 2019, Dominion Energy would have been required to post $13 million and $10 million, respectively, of additional collateral to its counterparties. The collateral that would be required to be posted includes the impacts of any offsetting asset positions and any amounts already posted for derivatives, non-derivative contracts and derivatives elected under the normal purchases and normal sales exception, per contractual terms. Dominion Energy had posted $1 million of collateral at September 30, 2020 related to derivatives with credit-related contingent provisions that are in a liability position and not fully collateralized with cash and had posted no collateral at December 31, 2019. The aggregate fair value of all derivative instruments with credit-related contingent provisions that are in a liability position and not fully collateralized with cash was $14 million and $10 million at September 30, 2020 and December 31, 2019, respectively, which does not include the impact of any offsetting asset positions.

 

If the credit-related contingent features underlying these instruments that are in a liability position and not fully collateralized with cash were fully triggered as of September 30, 2020 and December 31, 2019, Virginia Power would have been required to post an additional $1 million and $8 million, respectively, of collateral to its counterparties.

See Note 9 for further information about derivative instruments.