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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

Fair Value Inputs, Assets, Quantitative Information

The following table presents Dominion Energy’s quantitative information about Level 3 fair value measurements at June 30, 2022. 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:
FTRs		235	Discounted cash flow	Market price (per MWh)	⁽³⁾	0 - 16		4
Electricity		235	Discounted cash flow	Market price (per MWh)	⁽³⁾	30 - 141		52
Physical options:
Natural gas⁽²⁾		32	Option model	Market price (per Dth)	⁽³⁾	4 - 19		9
				Price volatility	⁽⁴⁾	8% - 31%		22	%
Total assets	$	502
Liabilities
Physical and financial forwards:
Natural gas⁽²⁾	$	17	Discounted cash flow	Market price (per Dth)	⁽³⁾	(2) - 6		(1	)
FTRs		5	Discounted cash flow	Market price (per MWh)	⁽³⁾	0 - 11		3
Total liabilities	$	22

(1)	Averages weighted by volume.

(2)	Includes basis.

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

(4)	Represents volatilities unrepresented in published markets.

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)
Price volatility	Buy	Increase (decrease)	Gain (loss)
Price volatility	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 June 30, 2022
Assets
Derivatives:
Commodity	$	—		$	263	$	502	$	765
Interest rate		—			1,345		—		1,345
Investments⁽¹⁾:
Equity securities:
U.S.		3,704			—		—		3,704
Fixed income:
Corporate debt instruments		—			618		—		618
Government securities		163			1,079		—		1,242
Total assets	$	3,867		$	3,305	$	502	$	7,674
Liabilities
Derivatives:
Commodity	$	—		$	1,182	$	22	$	1,204
Interest rate		—			333		—		333
Foreign currency exchange rate		—			113		—		113
Total liabilities	$	—		$	1,628	$	22	$	1,650
At December 31, 2021
Assets
Derivatives:
Commodity	$	—		$	52	$	230	$	282
Interest rate		—			323		—		323
Foreign currency exchange rate		—			8		—		8
Investments⁽¹⁾:
Equity securities:
U.S.		5,241			—		—		5,241
Fixed income:
Corporate debt instruments		—			881		—		881
Government securities		199			1,256		—		1,455
Cash equivalents and other		(29	)		—		—		(29	)
Total assets	$	5,411		$	2,520	$	230	$	8,161
Liabilities
Derivatives:
Commodity	$	—		$	461	$	8	$	469
Interest rate		—			399		—		399
Total liabilities	$	—		$	860	$	8	$	868

(1)

Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes $257 million and $366 million of assets at June 30, 2022 and December 31, 2021, 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						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
(millions)
Beginning balance	$	202		$	56		$	222		$	103
Total realized and unrealized gains (losses):
Included in earnings:
Operating revenue		—			(2	)		—			(2	)
Electric fuel and other energy-related purchases		117			4			165			(17	)
Included in regulatory assets/liabilities		261			8			241			(39	)
Settlements		(117	)		(4	)		(165	)		17
Purchases		17			—			17			—
Ending balance	$	480		$	62		$	480		$	62

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:

	June 30, 2022				December 31, 2021
	Carrying Amount		Estimated Fair Value⁽¹⁾		Carrying Amount		Estimated Fair Value⁽¹⁾
(millions)
Dominion Energy
Long-term debt⁽²⁾	$	38,086	$	36,642	$	35,996	$	40,947
Supplemental credit facility borrowings		450		450		—		—
Junior subordinated notes⁽³⁾		1,386		1,338		1,386		1,470
Virginia Power
Long-term debt⁽³⁾	$	15,917	$	15,264	$	13,753	$	16,021

(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 June 30, 2022 and December 31, 2021, the carrying amount includes the valuation of certain fair value hedges associated with fixed rate debt of less than $1 million and $2 million, respectively.

(3)	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 June 30, 2022. 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:
FTRs		235	Discounted cash flow	Market price (per MWh)	⁽³⁾	0 - 16		4
Physical options:
Natural gas⁽²⁾		32	Option model	Market price (per Dth)	⁽³⁾	4 - 19		9
				Price volatility	⁽⁴⁾	8% - 31%		22	%
Total assets	$	267
Liabilities
Physical and financial forwards:
Natural gas⁽²⁾	$	17	Discounted cash flow	Market price (per Dth)	⁽³⁾	(2) - 6		(1	)
FTRs		5	Discounted cash flow	Market price (per MWh)	⁽³⁾	0 - 11		3
Total liabilities	$	22

(1)	Averages weighted by volume.

(2)	Includes basis.

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

(4)	Represents volatilities unrepresented in published markets.

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)
Price volatility	Buy	Increase (decrease)	Gain (loss)
Price volatility	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 June 30, 2022
Assets
Derivatives:
Commodity	$	—		$	80	$	267	$	347
Interest rate		—			444		—		444
Investments⁽¹⁾:
Equity securities:
U.S.		1,977			—		—		1,977
Fixed income:
Corporate debt instruments		—			419		—		419
Government securities		91			497		—		588
Total assets	$	2,068		$	1,440	$	267	$	3,775
Liabilities
Derivatives:
Commodity	$	—		$	382	$	22	$	404
Interest rate		—			68		—		68
Foreign currency exchange rate		—			113		—		113
Total liabilities	$	—		$	563	$	22	$	585
At December 31, 2021
Assets
Derivatives:
Commodity	$	—		$	36	$	110	$	146
Interest rate		—			146		—		146
Foreign currency exchange rate		—			8		—		8
Investments⁽¹⁾:
Equity securities:
U.S.		2,420			—		—		2,420
Fixed income:
Corporate debt instruments		—			531		—		531
Government securities		93			506		—		599
Cash equivalents and other		(3	)		—		—		(3	)
Total assets	$	2,510		$	1,227	$	110	$	3,847
Liabilities
Derivatives:
Commodity	$	—		$	125	$	8	$	133
Interest rate		—			337		—		337
Total liabilities	$	—		$	462	$	8	$	470

(1)

Includes investments held in the nuclear decommissioning trusts. Excludes $173 million and $185 million of assets at June 30, 2022 and December 31, 2021, 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						Six Months Ended
	June 30,						June 30,
	2022			2021			2022			2021
(millions)
Beginning balance	$	22		$	56		$	102		$	103
Total realized and unrealized gains (losses):
Included in earnings:
Electric fuel and other energy-related purchases		106			4			151			(17	)
Included in regulatory assets/liabilities		206			18			126			(29	)
Settlements		(106	)		(4	)		(151	)		17
Purchases		17			—			17			—
Ending balance	$	245		$	74		$	245		$	74