Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income tax expense for continuing operations including noncontrolling interests

Details of income tax expense for continuing operations including noncontrolling interests were as follows:

	Dominion Energy									Virginia Power
Year Ended December 31,	2020			2019			2018			2020			2019			2018
(millions)
Current:
Federal	$	(314	)	$	(94	)	$	294		$	364		$	286		$	36
State		(81	)		58			82			71			58			40
Total current expense (benefit)		(395	)		(36	)		376			435			344			76
Deferred:
Federal
Taxes before operating loss carryforwards, investment tax credits and tax reform		12			168			30			(226	)		(128	)		199
2017 Tax Reform Act		—			—			46			—			—			21
Tax utilization expense of operating loss carryforwards		44			119			92			—			—			—
Investment tax credits		311			(51	)		(56	)		(27	)		(34	)		(51	)
State		72			(50	)		34			7			22			55
Total deferred expense (benefit)		439			186			146			(246	)		(140	)		224
Investment tax credit-gross deferral		42			62			2			42			62			2
Investment tax credit-amortization		(3	)		(3	)		(2	)		(2	)		(2	)		(2	)
Total income tax expense	$	83		$	209		$	522		$	229		$	264		$	300

Effective Income Tax

For continuing operations including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to the Companies’ effective income tax rate as follows:

	Dominion Energy												Virginia Power
Year Ended December 31,	2020				2019				2018				2020				2019				2018
U.S. statutory rate		21.0		%		21.0		%		21.0		%		21.0		%		21.0		%		21.0		%
Increases (reductions) resulting from:
State taxes, net of federal benefit		2.0				1.5				4.3				4.8				4.5				4.7
Investment tax credits		(9.6	)			(11.4	)			(2.3	)			(4.5	)			(2.9	)			(3.5	)
Production tax credits		(0.7	)			(2.1	)			(0.8	)			(0.7	)			(0.7	)			(0.7	)
Valuation allowances		0.9				0.5				0.4				—				—				—
Reversal of excess deferred income taxes		(5.4	)			(3.2	)			(2.3	)			(2.2	)			(3.1	)			(3.2	)
Federal legislative change		—				—				1.8				—				—				1.3
State legislative change		—				—				(0.8	)			—				—				—
Write-off of regulatory assets		—				21.7				—				—				—				—
Change in tax status		(1.7	)			(5.5	)			—				—				—				—
AFUDC—equity		(0.2	)			(0.2	)			(0.3	)			—				—				(0.5	)
Changes in state deferred taxes associated with assets held for sale		(3.2	)			—				—								—				—
Absence of tax on noncontrolling interest		3.8				(0.2	)			(0.1	)			—				—				—
Employee stock ownership plan     deduction		(0.9	)			(1.4	)			(0.5	)			—				—				—
Nondeductible goodwill		—				1.8				—				—				—				—
Other, net		(0.1	)			1.5				(0.4	)			(0.1	)			(0.2	)			(0.1	)
Effective tax rate		5.9		%		24.0		%		20.0		%		18.3		%		18.6		%		19.0		%

Deferred income taxes components

The Companies’ deferred income taxes consist of the following:

	Dominion Energy						Virginia Power
At December 31,	2020			2019			2020			2019
(millions)
Deferred income taxes:
Total deferred income tax assets	$	3,285		$	3,736		$	1,204		$	1,207
Total deferred income tax liabilities		9,069			9,883			3,832			4,058
Total net deferred income tax liabilities	$	5,784		$	6,147		$	2,628		$	2,851
Total deferred income taxes:
Plant and equipment, primarily depreciation method and basis differences	$	5,824		$	6,616		$	3,227		$	3,359
Excess deferred income taxes		(1,142	)		(1,306	)		(656	)		(672	)
Unrecovered NND Project costs		529			553			—			—
DESC rate refund		(140	)		(169	)		—			—
Toshiba Settlement		(204	)		(219	)		—			—
Nuclear decommissioning		991			909			303			290
Deferred state income taxes		702			863			305			302
Federal benefit of deferred state income taxes		(147	)		(184	)		(64	)		(63	)
Deferred fuel, purchased energy and gas costs		(28	)		30			(34	)		1
Pension benefits		239			174			(105	)		(153	)
Other postretirement benefits		(14	)		(37	)		76			62
Loss and credit carryforwards		(1,534	)		(1,832	)		(354	)		(280	)
Valuation allowances		155			161			6			5
Partnership basis differences		593			823			—			—
Other		(40	)		(235	)		(76	)		—
Total net deferred income tax liabilities	$	5,784		$	6,147		$	2,628		$	2,851
Deferred Investment Tax Credits – Regulated Operations		169			130			151			111
Total Deferred Taxes and Deferred Investment Tax Credits	$	5,953		$	6,277		$	2,779		$	2,962

Summary of deductible loss and credit carryforwards

At December 31, 2020, Dominion Energy had the following deductible loss and credit carryforwards:

	Deductible		Deferred		Valuation			Expiration
	Amount		Tax Asset		Allowance			Period
(millions)
Federal losses	$	1,169	$	246	$	—		2037
Federal investment credits	—			736	—			2036-2040
Federal production credits	—			86	—			2036-2040
Other federal credits	—			14	—			2036-2039
State losses		3,661		198		(61	)	2020-2040
State minimum tax credits	—			139	—			No expiration
State investment and other credits	—			142		(94	)	2020-2031
Total	$	4,830	$	1,561	$	(155	)

At December 31, 2020, Virginia Power had the following deductible loss and credit carryforwards:

	Deductible		Deferred		Valuation			Expiration
	Amount		Tax Asset		Allowance			Period
(millions)
Federal losses	$	—	$	—	$	—
Federal investment credits	—			294	—			2036-2040
Federal production and other credits	—			51	—			2036-2040
State investment credits	—			9		(6	)	2024
Total	$	—	$	354	$	(6	)

Reconciliation of changes in unrecognized tax benefits

A reconciliation of changes in the Companies’ unrecognized tax benefits follows:

	Dominion Energy											Virginia Power
	2020			2019					2018			2020		2019			2018
(millions)
Balance at January 1	$	175		$	44				$	38		$	—	$	2		$	4
Acquired unrecognized tax benefits		—			129		(1	)		—			—		—			—
Increases-prior period positions		18			—					10			—		—			—
Decreases-prior period positions		(19	)		—					—			—		—			—
Increases-current period positions		1			9					10			—		—			—
Settlements with tax authorities		—			(7	)				(6	)		—		(2	)		(1	)
Expiration of statutes of limitations		(8	)		—					(8	)		—		—			(1	)
Balance at December 31	$	167		$	175				$	44		$	—	$	—		$	2

(1) Acquired unrecognized tax benefits reflect $106 million plus increases in prior period positions of $76 million and decreases in prior period positions of $53 million that were recorded through purchase accounting.

Earliest tax year remaining

For each of the major states in which Dominion Energy operates, the earliest tax year remaining open for examination is as follows:

	Earliest
	Open Tax
State	Year
Pennsylvania(1)	2012
Connecticut	2017
Virginia(2)	2017
West Virginia	2017
New York(1)	2015
Utah	2017
South Carolina	2013

(1) Considered a major state for entities presented in discontinued operations.

(2) Considered a major state for Virginia Power’s operations