At December 31, 2020 and 2019, the Companies had the following lease assets and liabilities recorded in the Consolidated Balance Sheets:

	December 31, 2020		December 31, 2019
(millions)
Dominion Energy
Lease assets:
Operating lease assets⁽¹⁾	$	564	$	462
Finance lease assets⁽²⁾		148		134
Total lease assets	$	712	$	596
Lease liabilities:
Operating lease liabilities⁽³⁾	$	54	$	53
Finance lease liabilities⁽⁴⁾		32		27
Total lease liabilities - current		86		80
Operating lease liabilities ⁽⁵⁾		516		413
Finance lease liabilities⁽⁶⁾		108		100
Total lease liabilities - noncurrent		624		513
Total lease liabilities	$	710	$	593
Virginia Power
Operating lease assets⁽¹⁾	$	185	$	212
Finance lease assets⁽²⁾		45		19
Total lease assets	$	230	$	231
Lease liabilities:
Operating lease liabilities⁽³⁾	$	28	$	30
Finance lease liabilities⁽⁴⁾		8		3
Total lease liabilities - current		36		33
Operating lease liabilities ⁽⁵⁾		155		180
Finance lease liabilities⁽⁶⁾		36		16
Total lease liabilities - noncurrent		191		196
Total lease liabilities	$	227	$	229

In addition to the amounts disclosed above, Dominion Energy’s Consolidated Balance Sheets at December 31, 2020 and 2019 includes property, plant and equipment of $2.2 billion and $2.8 billion, respectively, and accumulated depreciation of $68 million and $364 million, respectively, related to facilities subject to power purchase agreements under which Dominion Energy is the lessor.

For the years ended December 31, 2020 and 2019, total lease cost associated with the Companies’ leasing arrangements consisted of the following:

	Year Ended December 31, 2020		Year Ended December 31, 2019
(millions)
Dominion Energy
Finance lease cost:
Amortization	$	33	$	20
Interest		—		4
Operating lease cost		68		79
Short-term lease cost		20		26
Variable lease cost		8		5
Total lease cost	$	129	$	134
Virginia Power
Operating lease cost	$	36	$	41
Short-term lease cost		12		13
Variable lease cost		4		2
Total lease cost	$	52	$	56

For the years ended December 31, 2020 and 2019, cash paid for amounts included in the measurement of the lease liabilities consisted of the following amounts, included in the Companies’ Consolidated Statements of Cash Flows:

	Year Ended December 31, 2020		Year Ended December 31, 2019
(millions)
Dominion Energy
Operating cash flows for finance leases	$	—	$	4
Operating cash flows for operating leases		96		111
Financing cash flows for finance leases		33		20
Virginia Power
Operating cash flows for operating leases		52		56

In addition to the amounts disclosed above, Dominion Energy’s Consolidated Statements of Income for the years ended December 31, 2020 and 2019, include $175 million and $174 million, respectively, of rental revenue, included in operating revenue and $102 million and $94 million, respectively, of depreciation expense, included in depreciation, depletion and amortization, related to facilities subject to power purchase agreements under which Dominion Energy is the lessor.

At December 31, 2020 and 2019, the weighted average remaining lease term and weighted discount rate for the Companies’ finance and operating leases were as follows:

	December 31, 2020			December 31, 2019
Dominion Energy
Weighted average remaining lease term - finance leases	5 years			5 years
Weighted average remaining lease term - operating leases	26 years			22 years
Weighted average discount rate - finance leases		3.17	%		3.83	%
Weighted average discount rate - operating leases		4.07	%		4.48	%
Virginia Power
Weighted average remaining lease term - finance leases	6 years			6 years
Weighted average remaining lease term - operating leases	21 years			20 years
Weighted average discount rate - finance leases		2.51	%		4.12	%
Weighted average discount rate - operating leases		4.26	%		4.29	%

Maturity of Lease Liabilities	Dominion Energy						Virginia Power
(millions)	Operating			Finance			Operating			Finance
2021	$	64		$	36		$	31		$	9
2022		56			34			25			8
2023		47			31			20			8
2024		40			29			15			7
2025		34			21			11			6
After 2025		756			14			194			9
Total undiscounted lease payments		997			165			296			47
Present value adjustment		(427	)		(25	)		(113	)		(3	)
Present value of lease liabilities	$	570		$	140		$	183		$	44

In December 2019, Dominion Energy signed an agreement with a lessor, as amended in May 2020, to construct and lease a new corporate office property in Richmond, Virginia. The lessor is providing equity and has obtained financing commitments from debt investors, totaling $465 million, to fund the estimated project costs. If Dominion Energy ultimately proceeds with the project through completion, the project is expected to be completed by September 2024. Dominion Energy has been appointed to act as the construction agent for the lessor, during which time Dominion Energy will request cash draws from the lessor and debt investors to fund all project costs, which totaled $61 million as of December 31, 2020. If the project is terminated under certain events, Dominion Energy could be required to pay up to 100% of the then funded amount.

The lease term will commence once construction is substantially complete and the facility is able to be occupied and will end in December 2027. At the end of the initial lease term, Dominion Energy can (i) extend the term of the lease for an additional five years, subject to the approval of the participants, at current market terms, (ii) purchase the property for an amount equal to the project costs or, (iii) subject to certain terms and conditions, sell the property on behalf of the lessor to a third party using commercially reasonable efforts to obtain the highest cash purchase price for the property. If the project is sold and the proceeds from the sale are insufficient to repay the investors for the project costs, Dominion Energy may be required to make a payment to the lessor, up to 83% of project costs, for the difference between the project costs and sale proceeds.

Dominion Energy is not considered the owner during construction for financial accounting purposes and, therefore, will not reflect the construction activity in its consolidated financial statements. Dominion Energy expects to recognize a right-of-use asset and a corresponding finance lease liability at the commencement of the lease term. Dominion Energy will be considered the owner of the leased property for tax purposes, and as a result, will be entitled to tax deductions for depreciation and interest expense.

In December 2020, Dominion Energy signed an agreement with a lessor to complete construction of and lease a Jones Act compliant offshore wind installation vessel. This vessel is designed to handle current turbine technologies as well as next generation turbines. The lessor is providing equity and has obtained financing commitments from debt investors, totaling $550 million, to fund the estimated project costs. The project is expected to be completed by the end of 2023. Dominion Energy has been appointed to act as the construction agent for the lessor, during which time Dominion Energy will request cash draws from the lessor and debt investors to fund all project costs, which totaled $187 million as of December 31, 2020. If the project is terminated under certain events of default, Dominion Energy could be required to pay up to 100% of the then funded amount.

The initial lease term will commence once construction is substantially complete and the vessel is delivered and will mature in November 2027. At the end of the initial lease term, Dominion Energy can (i) extend the term of the lease for an additional term, subject to the approval of the participants, at current market terms, (ii) purchase the property for an amount equal to the outstanding project costs or, (iii) subject to certain terms and conditions, sell the property on behalf of the lessor to a third party using commercially reasonable efforts to obtain the highest cash purchase price for the property. If the project is sold and the proceeds from the sale are insufficient to repay the investors for the outstanding project costs, Dominion Energy may be required to make a payment

to the lessor for the difference between the outstanding project costs and sale proceeds. Dominion Energy is not considered the owner during construction for financial accounting purposes and, therefore, will not reflect the construction activity in its consolidated financial statements. Dominion Energy expects to recognize a right-of-use asset and a corresponding finance lease liability at the commencement of the lease term. Dominion Energy will be considered the owner of the leased property for tax purposes, and as a result, will be entitled to tax deductions for depreciation and interest expense.