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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Inputs, Assets, Quantitative Information

The following table presents Dominion Energy’s quantitative information about Level 3 fair value measurements at March 31, 2021. The range and weighted average are presented in dollars for market price inputs.

	Fair Value (millions)		Valuation Techniques	Unobservable Input		Range	Weighted Average⁽¹⁾
Assets
Physical and financial forwards:
Natural gas⁽²⁾	$	56	Discounted cash flow	Market price (per Dth)	⁽³⁾	(2) - 3		(1	)
FTRs		2	Discounted cash flow	Market price (per MWh)	⁽³⁾	(2) - 3		—
Total assets	$	58
Liabilities
Financial forwards:
FTRs	$	2	Discounted cash flow	Market price (per MWh)	⁽³⁾	(2) - 2		—
Total liabilities	$	2

(1)	Averages weighted by volume.

(2)	Includes basis.

(3)	Represents market prices beyond defined terms for Levels 1 and 2.

Fair Value, Option, Qualitative Disclosures

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:

Significant Unobservable

Inputs

Position

Change to Input

Impact on Fair Value

Measurement

Market price

Buy

Increase (decrease)

Gain (loss)

Market price

Sell

Increase (decrease)

Loss (gain)

Fair Value, by Balance Sheet Grouping

The following table presents Dominion Energy’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:

	Level 1		Level 2		Level 3		Total
(millions)
At March 31, 2021
Assets
Derivatives:
Commodity	$	—	$	51	$	58	$	109
Interest rate		—		740		—		740
Investments⁽¹⁾:
Equity securities:
U.S.		4,569		—		—		4,569
Fixed income:
Corporate debt instruments		—		722		—		722
Government securities		728		727		—		1,455
Cash equivalents and other		18		—		—		18
Total assets	$	5,315	$	2,240	$	58	$	7,613
Liabilities
Derivatives:
Commodity	$	—	$	76	$	2	$	78
Interest rate		—		186		—		186
Total liabilities	$	—	$	262	$	2	$	264
At December 31, 2020
Assets
Derivatives:
Commodity	$	—	$	57	$	110	$	167
Interest rate		—		230		—		230
Investments⁽¹⁾:
Equity securities:
U.S.		4,648		—		—		4,648
Fixed income:
Corporate debt instruments		—		629		—		629
Government securities		508		730		—		1,238
Cash equivalents and other		32		15		—		47
Total assets	$	5,188	$	1,661	$	110	$	6,959
Liabilities
Derivatives:
Commodity	$	—	$	48	$	7	$	55
Interest rate		—		431		—		431
Total liabilities	$	—	$	479	$	7	$	486

(1)

Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes $399 million and $340 million of assets at March 31, 2021 and December 31, 2020, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents the net change in Dominion Energy's assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:

	Three Months Ended
	March 31,
	2021			2020
(millions)
Beginning balance	$	103		$	(37	)
Total realized and unrealized gains (losses):
Included in earnings:
Electric fuel and other energy-related purchases		(21	)		(22	)
Included in regulatory assets/liabilities		(47	)		80
Settlements		21			22
Ending balance	$	56		$	43

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

For the Companies' financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:

	March 31, 2021				December 31, 2020
	Carrying Amount		Estimated Fair Value⁽¹⁾		Carrying Amount		Estimated Fair Value⁽¹⁾
(millions)
Dominion Energy
Long-term debt⁽²⁾⁽³⁾	$	31,991	$	36,334	$	31,996	$	38,773
Supplemental 364-Day credit facility borrowings		—		—		225		225
Junior subordinated notes⁽⁴⁾		3,412		3,579		3,411		3,633
Virginia Power
Long-term debt⁽⁴⁾	$	13,209	$	15,174	$	13,207	$	16,455

(1)

Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issuances with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value.

(2)

Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs and discount or premium. At both March 31, 2021 and December 31, 2020, the carrying amount includes the valuation of certain fair value hedges associated with fixed rate debt of $3 million.

(3)	Includes amounts classified as held for sale, see Note 3.

(4)	Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium.

Virginia Electric and Power Company

Fair Value Inputs, Assets, Quantitative Information

The following table presents Virginia Power’s quantitative information about Level 3 fair value measurements at March 31, 2021. The range and weighted average are presented in dollars for market price inputs.

	Fair Value (millions)		Valuation Techniques	Unobservable Input		Range	Weighted Average⁽¹⁾
Assets
Physical and financial forwards:
Natural gas⁽²⁾	$	56	Discounted cash flow	Market price (per Dth)	⁽³⁾	(2) - 3		(1	)
FTRs		2	Discounted cash flow	Market price (per MWh)	⁽³⁾	(2) - 3		—
Total assets	$	58
Liabilities
Financial forwards:
FTRs	$	2	Discounted cash flow	Market price (per MWh)	⁽³⁾	(2) - 2		—
Total liabilities	$	2

(1)	Averages weighted by volume.

(2)	Includes basis.

(3)	Represents market prices beyond defined terms for Levels 1 and 2.

Fair Value, Option, Qualitative Disclosures

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:

Significant Unobservable

Inputs

Position

Change to Input

Impact on Fair Value

Measurement

Market price

Buy

Increase (decrease)

Gain (loss)

Market price

Sell

Increase (decrease)

Loss (gain)

Fair Value, by Balance Sheet Grouping

The following table presents Virginia Power’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:

	Level 1		Level 2		Level 3		Total
(millions)
At March 31, 2021
Assets
Derivatives:
Commodity	$	—	$	18	$	58	$	76
Interest rate		—		283		—		283
Investments⁽¹⁾:
Equity securities:
U.S.		2,132		—		—		2,132
Fixed income:
Corporate debt instruments		—		400		—		400
Government securities		340		277		—		617
Total assets	$	2,472	$	978	$	58	$	3,508
Liabilities
Derivatives:
Commodity	$	—	$	26	$	2	$	28
Interest rate		—		150		—		150
Total liabilities	$	—	$	176	$	2	$	178
At December 31, 2020
Assets
Derivatives:
Commodity	$	—	$	5	$	110	$	115
Interest rate		—		66		—		66
Investments⁽¹⁾:
Equity securities:
U.S.		2,171		—		—		2,171
Fixed income:
Corporate debt instruments		—		348		—		348
Government securities		201		309		—		510
Cash equivalents and other		13		—		—		13
Total assets	$	2,385	$	728	$	110	$	3,223
Liabilities
Derivatives:
Commodity	$	—	$	22	$	7	$	29
Interest rate		—		376		—		376
Total liabilities	$	—	$	398	$	7	$	405

(1)

Includes investments held in the nuclear decommissioning trusts. Excludes $199 million and $167 million of assets at March 31, 2021 and December 31, 2020, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents the net change in Virginia Power’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:

	Three Months Ended
	March 31,
	2021			2020
(millions)
Beginning balance	$	103		$	(37	)
Total realized and unrealized gains (losses):
Included in earnings:
Electric fuel and other energy-related purchases		(21	)		(22	)
Included in regulatory assets/liabilities		(47	)		80
Settlements		21			22
Ending balance	$	56		$	43