Asset Retirement Obligations

12 Months Ended

Dec. 31, 2021

Asset Retirement Obligation Disclosure [Abstract]

NOTE 14. ASSET RETIREMENT OBLIGATIONS

AROs represent obligations that result from laws, statutes, contracts and regulations related to the eventual retirement of certain of the Companies’ long-lived assets. The Companies AROs are primarily associated with the decommissioning of their nuclear generation facilities and ash pond and landfill closures.

The Companies have also identified, but not recognized, AROs related to the retirement of Dominion Energy’s storage wells in its underground natural gas storage network, certain Virginia Power electric transmission and distribution assets located on property with easements, rights of way, franchises and lease agreements, Virginia Power’s hydroelectric generation facilities and the abatement of certain asbestos not expected to be disturbed in the Companies’ generation facilities. The Companies currently do not have sufficient information to estimate a reasonable range of expected retirement dates for any of these assets since the economic lives of these assets can be extended indefinitely through regular repair and maintenance and they currently have no plans to retire or dispose of any of these assets. As a result, a settlement date is not determinable for these assets and AROs for these assets will not be reflected in the Consolidated Financial Statements until sufficient information becomes available to determine a reasonable estimate of the fair value of the activities to be performed. The Companies continue to monitor operational and strategic developments to identify if sufficient information exists to reasonably estimate a retirement date for these assets.

The changes to AROs during 2020 and 2021 were as follows:

	Amount
(millions)
Dominion Energy
AROs at December 31, 2019	$	5,184
Obligations incurred during the period		67
Obligations settled during the period		(114	)
Revisions in estimated cash flows⁽¹⁾		228
Accretion		218
AROs at December 31, 2020⁽²⁾	$	5,583
Obligations incurred during the period		31
Obligations settled during the period		(165	)
Revisions in estimated cash flows⁽³⁾		(151	)
Accretion		224
Sale of non-wholly-owned nonregulated solar facilities		(49	)
AROs at December 31, 2021⁽²⁾	$	5,473
Virginia Power
AROs at December 31, 2019	$	3,581
Obligations incurred during the period		48
Obligations settled during the period		(85	)
Revisions in estimated cash flows⁽⁴⁾		139
Accretion		137
AROs at December 31, 2020	$	3,820
Obligations incurred during the period		26
Obligations settled during the period		(131	)
Revisions in estimated cash flows⁽⁵⁾		67
Accretion		141
AROs at December 31, 2021	$	3,923

(1)	Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities, asbestos abatement costs associated with certain utility facilities and from the completion of a nuclear decommissioning cost study related to Summer.

(2)	Includes $179 million and $198 million reported in other current liabilities at December 31, 2020 and 2021, respectively.

(3)

Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities, estimated cash flow projections associated with the recovery of spent nuclear fuel costs for its AROs associated with the decommissioning of Kewaunee and estimated cash flow projections associated with certain gas distribution pipelines. These revisions in 2021 resulted in a charge of $44 million ($35 million after-tax) within other operations and maintenance expense in the Consolidated Statements of Income as well as a $173 million decrease to property, plant and equipment, net.

(4)	Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities and asbestos abatement costs associated with certain utility facilities.

(5)	Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities.

In addition, Virginia Power revised its estimated cash flows for the existing ARO related to future ash pond and landfill closure costs, which resulted in a $113 million ($84 million after-tax) benefit in other operations and maintenance expense in the Consolidated Statements of Income in 2019.

Dominion Energy’s AROs at December 31, 2021 and 2020, include $2.0 billion and $1.9 billion, respectively, with $0.9 billion and $0.9 billion recorded by Virginia Power, related to the future decommissioning of their nuclear facilities. The Companies have established trusts dedicated to funding the future decommissioning activities. At December 31, 2021 and 2020, the aggregate fair value of Dominion Energy’s trusts, consisting primarily of equity and debt securities, totaled $8.0 billion and $6.9 billion, respectively. At December 31, 2021 and 2020, the aggregate fair value of Virginia Power’s trusts, consisting primarily of debt and equity securities, totaled $3.7 billion and $3.2 billion, respectively.

In addition, AROs at December 31, 2021 and 2020 include $2.9 billion and $2.8 billion, respectively, related to Virginia Power’s future ash pond and landfill closure costs. Regulatory mechanisms, primarily associated with legislation enacted in Virginia in March 2019, provide for recovery of costs to be incurred. See Note 12 for additional information.