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Investments

3 Months Ended

Mar. 31, 2021

Investments Debt And Equity Securities [Abstract]

Investments

Note 10. Investments

Dominion Energy

Equity and Debt Securities

Rabbi Trust Securities

Equity and fixed income securities and cash equivalents in Dominion Energy’s rabbi trusts and classified as trading totaled $139 million and $134 million at March 31, 2021 and December 31, 2020, respectively.

Decommissioning Trust Securities

Dominion Energy holds equity and fixed income securities, insurance contracts and cash equivalents 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				Allowance for Credit Losses		Fair Value
(millions)
March 31, 2021
Equity securities:⁽¹⁾
U.S.	$	1,573		$	3,036	$	(10	)				$	4,599
Fixed income securities:⁽²⁾
Corporate debt instruments		698			32		(8	)		$	—		722
Government securities		1,369			47		(14	)			—		1,402
Common/collective trust funds		221			6		—				—		227
Insurance contracts		237			—		—						237
Cash equivalents and other⁽³⁾		(51	)		3		—				—		(48	)
Total	$	4,047		$	3,124	$	(32	)	⁽⁴⁾	$	—	$	7,139
December 31, 2020
Equity securities:⁽¹⁾
U.S.	$	1,756		$	2,948	$	(24	)				$	4,680
Fixed income securities:⁽²⁾
Corporate debt instruments		572			58		(1	)		$	—		629
Government securities		1,119			66		(1	)			—		1,184
Common/collective trust funds		170			5		—				—		175
Insurance contracts		237			—		—						237
Cash equivalents and other⁽³⁾		(8	)		4		(1	)			—		(5	)
Total	$	3,846		$	3,081	$	(27	)	⁽⁴⁾	$	—	$	6,900

(1)	Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability.

(2)	Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability. Changes in allowance for credit losses are included in other income.

(3)	Includes pending purchases of securities of $63 million and $49 million at March 31, 2021 and December 31, 2020, respectively.

(4)	The fair value of securities in an unrealized loss position was $937 million and $293 million at March 31, 2021 and December 31, 2020, respectively.

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

	Three Months Ended March 31,
	2021			2020
(millions)
Net gains (losses) recognized during the period	$	279		$	(898	)
Less: Net (gains) losses recognized during the period on securities sold during the period		(178	)		14
Unrealized gains (losses) recognized during the period on securities still held at period end⁽¹⁾	$	101		$	(884	)

(1)	Included in other income and the nuclear decommissioning trust regulatory liability.

The fair value of Dominion Energy’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at March 31, 2021 by contractual maturity is as follows:

	Amount
(millions)
Due in one year or less	$	292
Due after one year through five years		640
Due after five years through ten years		614
Due after ten years		805
Total	$	2,351

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

	Three Months Ended March 31,
	2021		2020
(millions)
Proceeds from sales	$	1,765	$	602
Realized gains⁽¹⁾		232		66
Realized losses⁽¹⁾		59		69

(1)	Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.

Virginia Power

Virginia Power holds equity and fixed income securities and cash equivalents 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				Allowance for Credit Losses		Fair Value
(millions)
March 31, 2021
Equity securities:⁽¹⁾
U.S.	$	839		$	1,414	$	(9	)				$	2,244
Fixed income securities:⁽²⁾
Corporate debt instruments		385			18		(3	)		$	—		400
Government securities		601			18		(3	)			—		616
Common/collective trust funds		86			—		—				—		86
Cash equivalents and other⁽³⁾		(24	)		—		—				—		(24	)
Total	$	1,887		$	1,450	$	(15	)	⁽⁴⁾	$	—	$	3,322
December 31, 2020
Equity securities:⁽¹⁾
U.S.	$	929		$	1,371	$	(21	)				$	2,279
Fixed income securities:⁽²⁾
Corporate debt instruments		315			33		—			$	—		348
Government securities		484			25		—				—		509
Common/collective trust funds		58			—		—				—		58
Cash equivalents and other⁽³⁾		3			—		—				—		3
Total	$	1,789		$	1,429	$	(21	)	⁽⁴⁾	$	—	$	3,197

(1)	Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability.

(2)	Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability. Changes in allowance for credit losses are included in other income.

(3)	Includes pending purchases of securities of $24 million and $10 million at March 31, 2021 and December 31, 2020, respectively.

(4)	The fair value of securities in an unrealized loss position was $434 million and $142 million at March 31, 2021 and December 31, 2020, respectively.

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

	Three Months Ended March 31,
	2021			2020
(millions)
Net gains (losses) recognized during the period	$	143		$	(423	)
Less: Net (gains) losses recognized during the period on securities sold during the period		(88	)		6
Unrealized gains (losses) recognized during the period on securities still held at period end⁽¹⁾	$	55		$	(417	)

(1)	Included in other income and the nuclear decommissioning trust regulatory liability.

The fair value of Virginia Power’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at March 31, 2021 by contractual maturity is as follows:

	Amount
(millions)
Due in one year or less	$	111
Due after one year through five years		314
Due after five years through ten years		365
Due after ten years		312
Total	$	1,102

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

	Three Months Ended March 31,
	2021		2020
(millions)
Proceeds from sales	$	789	$	294
Realized gains⁽¹⁾		106		31
Realized losses⁽¹⁾		23		31

(1)	Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.

Equity Method Investments

Dominion Energy

Dominion Energy recorded equity earnings on its investments of $80 million and $4 million for the three months ended March 31, 2021 and 2020, respectively, in other income in its Consolidated Statements of Income. In addition, Dominion Energy recorded equity earnings (losses) of $(8) million and $35 million for the three months ended March 31, 2021 and 2020, respectively, in discontinued operations related to its investment in Atlantic Coast Pipeline. Dominion Energy received distributions of $73 million and $5 million for the three months ended March 31, 2021 and 2020, respectively. At March 31, 2021 and December 31, 2020, the net difference between the carrying amount of Dominion Energy’s investments and its share of underlying equity in net assets was $224 million and $213 million, respectively. At March 31, 2021, these differences are comprised of $27 million of equity method goodwill that is not being amortized, a $226 million basis difference from Dominion Energy’s investments in Cove Point, which is being amortized over the useful lives of the underlying assets and a net $(29) million basis difference primarily attributable to an unfunded commitment made to Align RNG. At December 31, 2020, these differences are comprised of $27 million of equity method goodwill that is not being amortized, a $227 million basis difference from Dominion Energy’s investments in Cove Point, which is being amortized over the useful lives of the underlying assets and a net $(41) million basis difference primarily attributable to an unfunded commitment made to Align RNG.

Cove Point

In November 2020, in conjunction with the GT&S Transaction, Dominion Energy sold 100% of its general partner interest and 25% of the total limited partner interest in Cove Point. Dominion Energy retained a 50% noncontrolling limited partnership interest in Cove

Point which is accounted for as an equity method investment, as discussed in Note 9 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.

Income before income taxes recorded by Cove Point for the three months ended March 31, 2021 and 2020, was $138 million and $133 million, respectively. For the periods prior to closing of the GT&S Transaction, earnings attributable to Dominion Energy are presented in discontinued operations and subsequent to the closing, earnings attributable to Dominion Energy are presented within other income in its Consolidated Statements of Income.

Dominion Energy recorded distributions from Cove Point of $73 million for the three months ended March 31, 2021. No contributions were made to Cove Point for the three months ended March 31, 2021.

Atlantic Coast Pipeline

A description of Dominion Energy’s investment in Atlantic Coast Pipeline, including events that led to the cancellation of the Atlantic Coast Pipeline Project in July 2020, is included in Note 9 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

At March 31, 2021 and December 31, 2020, Dominion Energy has recorded a liability of $97 million and $1.1 billion, respectively, in its Consolidated Balance Sheets as a result of its share of equity losses exceeding its investment which reflects Dominion Energy’s obligations on behalf of Atlantic Coast Pipeline related to its credit facility, through February 2021, and AROs.

In February 2021, Atlantic Coast Pipeline repaid the outstanding borrowed amounts and terminated its revolving credit facility. As of December 31, 2020, Atlantic Coast Pipeline had borrowed $1.8 billion against the revolving credit facility. Concurrently, Dominion Energy’s related guarantee agreement to support its portion of Atlantic Coast Pipeline’s borrowings was also terminated. Dominion Energy’s Consolidated Balance Sheets included a liability of $6 million associated with this guarantee agreement at December 31, 2020.

Dominion Energy recorded contributions of $965 million and $16 million during the three months ended March 31, 2021 and 2020, respectively, to Atlantic Coast Pipeline.

Dominion Energy expects to incur additional losses from Atlantic Coast Pipeline as it completes wind-down activities. While Dominion Energy is unable to precisely estimate the amounts to be incurred by Atlantic Coast Pipeline, the portion of such amounts attributable to Dominion Energy is not expected to be material to Dominion Energy’s results of operations, financial position or statement of cash flows.

DETI provided services to Atlantic Coast Pipeline which totaled $20 million for the three months ended March 31, 2020, included in discontinued operations in Dominion Energy’s Consolidated Statements of Income.

Wrangler

A description of Dominion Energy’s investment in Wrangler is included in Note 9 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. At March 31, 2021 and December 31, 2020, $72 million and $63 million of assets and $15 million and $15 million of liabilities, respectively, associated with the remaining nonregulated retail energy marketing operations expected to be contributed to Wrangler by December 2021 were classified as held for sale and were included in current assets held for sale and current liabilities held for sale on Dominion Energy’s Consolidated Balance Sheets, respectively. The related disposal group is primarily comprised of customer receivables, goodwill, inventories and accounts payable.