Affiliated and Related Party Transactions

9 Months Ended

Sep. 30, 2021

Affiliated and Related Party Transactions

12. AFFILIATED AND RELATED PARTY TRANSACTIONS

DESC owns 40% of Canadys Refined Coal, LLC, which was involved in the manufacturing and sale of refined coal to reduce emissions at one of DESC's generating facilities. DESC accounts for this investment using the equity method.

DESS, on behalf of itself and its parent company, provided the following services to DESC through December 2020, which were 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 processed and paid invoices for DESC and was reimbursed. Effective January 2021, DES provides to DESC the services previously provided by DESS. 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.

	Three Months Ended September 30,				Nine Months Ended September 30,
(millions)	2021		2020		2021		2020
Direct and allocated costs from DES and DESS⁽¹⁾	$	53	$	72	$	168	$	202
Operating Revenues - Electric from sales to affiliate		—		1		2		3
Operating Expenses - Other taxes from affiliate		2		3		6		7
Purchases of electricity from solar affiliates		5		4		12		10
Demand and transportation charges from DECG - Fuel used in electric generation		—		5		—		14
Demand and transportation charges from DECG - Gas purchased for resale		—		11		—		33

(1)	^{Includes capitalized expenditures of $8 million and $23 million for the three months ended September 30, 2021 and 2020, respectively, and $23 million and $48 million for the nine months ended September 30, 2021 and 2020, respectively.}

(millions)	September 30, 2021		December 31, 2020
Payable to DES and DESS	$	20	$	59
Payable to Public Service Company of North Carolina, Incorporated		—		5
Receivable from Public Service Company of North Carolina, Incorporated		29		—
Payable to solar affiliates		1		1
Receivable from nuclear affiliates		1		—
Payable to DEI		2		—
Derivative assets with affiliates⁽¹⁾		9		—

(1)	Effective in the second quarter of 2021, contracts for the future purchase of certain quantities of electricity from solar affiliates no longer met the criteria for the normal purchase normal sale exception and are accounted for as derivative contracts.

Borrowings from an affiliate are described in Note 5.