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Affiliated and Related Party Transactions
9 Months Ended
Sep. 30, 2019
Related Party Transactions [Abstract]  
Affiliated and Related Party Transactions

14. AFFILIATED AND RELATED PARTY 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 in 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 gas purchased for resale or fuel used in electric generation, as applicable in 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 operations and maintenance - affiliated suppliers and other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss).

 

 

 

Three Months Ended

September 30,

 

 

Nine Months Ended

September 30,

 

(millions)

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Purchases of coal from affiliate

 

$

38

 

 

$

45

 

 

$

100

 

 

$

123

 

Sales of coal to affiliate

 

 

37

 

 

 

45

 

 

 

99

 

 

 

122

 

Purchases of fuel used in electric generation from affiliate

 

 

 

 

 

35

 

 

 

43

 

 

 

95

 

Direct and allocated costs from services company affiliate(1)

 

 

67

 

 

 

73

 

 

 

207

 

 

 

208

 

Operating Revenues - Electric from sales to affiliate

 

 

1

 

 

 

1

 

 

 

3

 

 

 

3

 

Operating Expenses - Other taxes from affiliate

 

 

2

 

 

 

2

 

 

 

5

 

 

 

4

 

 

(1)

Includes capitalized expenditures of $13 million and $10 million for the three months ended September 30, 2019 and 2018, and $33 million and $29 million for the nine months ended September 30, 2019 and 2018, respectively.

 

(millions)

 

September 30, 2019

 

 

December 31, 2018

 

Receivable from Canadys Refined Coal, LLC

 

$

13

 

 

$

7

 

Payable to Canadys Refined Coal, LLC

 

 

13

 

 

 

7

 

Payable to SCANA Energy Marketing, Inc.

 

 

 

 

 

14

 

Payable to DESS

 

 

47

 

 

 

38

 

 

In connection with the SCANA Combination, purchases from certain entities owned by Dominion Energy became affiliated transactions. During the three and nine months ended September 30, 2019, DESC purchased electricity generated by three such affiliates, totaling $3 million and $7 million, respectively, which is recorded as purchased power in the Consolidated Statements of Comprehensive Income (Loss). At September 30, 2019, DESC had accounts payable balances to these affiliates totaling less than $1 million. In addition, during the three and nine months ended September 30, 2019, DESC incurred demand and transportation charges from Dominion Energy Carolina Gas Transmission, LLC totaling $16 million and $48 million, respectively, of which $6 million and $15 million, respectively, is recorded as fuel used in electric generation and $10 million and $33 million, respectively, is recorded as gas purchased for resale in the Consolidated Statements of Comprehensive Income (Loss). At September 30, 2019, DESC had an accounts payable balance due to this affiliate totaling $6 million.

Borrowings from an affiliate are described in Note 5.