Affiliated and Related Party Transactions

12 Months Ended

Dec. 31, 2021

Affiliated and Related Party Transactions

16. 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. Purchases and sales of the related coal are recorded as other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss).

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 expense, net in the Consolidated Statements of Comprehensive Income (Loss).

DESC transacts with affiliates for certain quantities of electricity in the ordinary course of business. DESC also enters into certain commodity derivative contracts with affiliates. DESC uses these contracts, which are principally comprised of forward commodity purchases, to manage commodity price risks associated with purchases of electricity. See Note 8 for more information.

Year Ended December 31,	2021		2020		2019
(millions)
Purchases of coal from affiliate	$	—	$	—	$	121
Sales of coal to affiliate		—		—		120
Purchases of fuel used in electric generation from affiliate		—		—		43
Direct and allocated costs from DES and DESS⁽¹⁾		226		294		297
Operating Revenues – Electric from sales to affiliate		4		4		4
Operating Revenues – Gas from sales to affiliate		1		1		1
Operating Expenses – Other taxes from affiliate		7		9		6
Purchases of electricity from solar affiliates		14		12		8
Demand and transportation charges from DECG - Fuel used in electric generation		—		16		19
Demand and transportation charges from DECG - Gas purchased for resale		—		36		44

(1) Includes capitalized expenditures of $37 million, $81 million and $53 million for the years ended December 31, 2021, 2020 and 2019, respectively.

At December 31,	2021		2020
(millions)
Payable to DES and DESS		30		59
Payable to Public Service Company of North Carolina, Incorporated		—		5
Receivable from Public Service Company of North Carolina, Incorporated		60		—
Payable to solar affiliates		1		1
Receivable from nuclear affiliates		1		—
Payable to DEI		1		—
Derivative assets with affiliates⁽¹⁾		28		—

(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 6. Certain disclosures regarding DESC’s participation in SCANA's noncontributory defined benefit pension plan and unfunded postretirement health care and life insurance programs are included in Note 11.