AFFILIATED TRANSACTIONS

DESC owns 40% of Canadys Refined Coal, LLC, which is involved in the manufacturing and sale of refined coal to reduce emissions at certain of DESC's generating facilities. DESC accounts for this investment using the equity method. Purchases and sales of the related coal are recorded as Other Income (Expense), net on the Consolidated Statements of Comprehensive Income (Loss).

DESC purchases natural gas and related pipeline capacity from SCANA Energy Marketing, Inc. to serve its retail gas customers and to satisfy certain electric generation requirements. These purchases are included within fuel used in electric generation on the Consolidated Statements of Comprehensive Income (Loss).

DESS, on behalf of itself and its parent company, provides the following services to DESC, which are rendered at direct or allocated cost: information systems, telecommunications, customer support, marketing and sales, human resources, corporate compliance, purchasing, financial, risk management, public affairs, legal, investor relations, gas supply and capacity management, strategic planning, general administrative, and retirement benefits. In addition, DESS processes and pays invoices for DESC and is reimbursed. Costs for these services include amounts capitalized. Amounts expensed are primarily recorded in Other operation and maintenance - affiliated suppliers and Other Income (Expense), net on the Consolidated Statements of Comprehensive Income (Loss).



	Three Months Ended March 31,
Millions of Dollars	2019		2018
Purchases of coal from affiliate	$	28	$	33
Sales of coal to affiliate	28		32
Purchases of fuel used in electric generation from affiliate	33		31
Direct and allocated costs from services company affiliate⁽¹⁾	58		59
Operating Revenues - Electric from sales to affiliate	1		1
Operating Expenses - Other taxes from affiliate	2		2

⁽¹⁾ Includes capitalized expenditures of $9 million and $8 million for the three months ended March 31, 2019 and 2018, respectively.



Millions of Dollars	March 31, 2019		December 31, 2018
Receivable from Canadys Refined Coal, LLC	$	5	$	7
Payable to Canadys Refined Coal, LLC	5		7
Payable to SCANA Energy Marketing, Inc.	11		14
Payable to DESS	41		38

In connection with the SCANA Combination, purchases from certain entities owned by Dominion Energy became affiliated transactions. During the three months ended March 31, 2019, DESC purchased electricity generated by two such affiliates, Ridgeland Solar Farm I, LLC and Moffett Solar 1, LLC, totaling $1 million, which is recorded as Purchased power in the Statement of Comprehensive Income (Loss). At March 31, 2019, DESC had accounts payable balances to these affiliates totaling $1 million. In addition, during the three months ended March 31, 2019, DESC incurred demand and transportation charges from Dominion Energy Carolina Gas Transmission, LLC totaling $15 million, of which $11 million is recorded as Fuel used in electric generation and $4 million is recorded as Gas purchased for resale in the Statements of Comprehensive Income (Loss). At March 31, 2019, DESC had an accounts payable balance due to this affiliate totaling $6 million.

Borrowings from an affiliate are described in Note 5.