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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income tax expense for continuing operations including noncontrolling interests

Details of income tax expense for continuing operations including noncontrolling interests were as follows:

		Dominion Energy												Virginia Power												Dominion Energy Gas
Year Ended December 31,		2018				2017				2016				2018				2017				2016				2018				2017				2016
(millions)
Current:
Federal		$	(45	)		$	(1	)		$	(155	)		$	36			$	432			$	168			$	23			$	16			$	(27	)
State			108				(26	)			85				40				73				90				30				8				4
Total current expense (benefit)			63				(27	)			(70	)			76				505				258				53				24				(23	)
Deferred:
Federal
2017 Tax Reform Act impact			46				(851	)			—				21				(93	)			—				(11	)			(197	)			—
Taxes before operating loss carryforwards and investment tax credits			436				739				1,050				199				319				435				48				199				239
Tax utilization expense (benefit) of operating loss carryforwards			92				174				(161	)			—				4				(2	)			—				5				(2	)
Investment tax credits			(56	)			(200	)			(248	)			(51	)			(23	)			(25	)			—				—				—
State			(1	)			132				50				55				59				27				(4	)			20				1
Total deferred expense (benefit)			517				(6	)			691				224				266				435				33				27				238
Investment tax credit-gross deferral			2				5				35				2				5				35				—				—				—
Investment tax credit-amortization			(2	)			(2	)			(1	)			(2	)			(2	)			(1	)			—				—				—
Total income tax expense (benefit)		$	580			$	(30	)		$	655			$	300			$	774			$	727			$	86			$	51			$	215

Effective Income Tax

For continuing operations including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to the Companies’ effective income tax rate as follows:

		Dominion Energy												Virginia Power												Dominion Energy Gas
Year Ended December 31,		2018				2017				2016				2018				2017				2016				2018				2017				2016
U.S. statutory rate			21.0	%			35.0	%			35.0	%			21.0	%			35.0	%			35.0	%			21.0	%			35.0	%			35.0	%
Increases (reductions) resulting from:
State taxes, net of federal benefit			3.0				2.0				2.4				4.7				3.7				3.8				3.2				2.4				0.5
Investment tax credits			(1.9	)			(6.3	)			(11.7	)			(3.5	)			(0.8	)			—				—				—				—
Production tax credits			(0.7	)			(0.7	)			(0.8	)			(0.7	)			(0.4	)			(0.5	)			—				—				—
Valuation allowances			0.3				0.2				1.2				—				—				0.1				1.8				0.3				—
Reversal of excess deferred income taxes			(2.0	)			—				—				(3.2	)			—				—				(1.7	)			—				—
Federal legislative change			1.5				(27.5	)			—				1.3				(4.0	)			—				(2.8	)			(29.5	)			—
State legislative change			(0.6	)			—				(0.6	)			—				—				—				0.2				—				—
AFUDC—equity			(0.8	)			(1.4	)			(0.6	)			(0.5	)			(0.6	)			(0.6	)			(0.6	)			(0.9	)			(0.2	)
Employee stock ownership plan deduction			(0.4	)			(0.6	)			(0.6	)			—				—				—				—				—				—
Other, net			(0.9	)			(1.7	)			(1.4	)			(0.1	)			0.6				(0.4	)			1.2				0.4				0.1
Effective tax rate			18.5	%			(1.0	)%			22.9	%			19.0	%			33.5	%			37.4	%			22.3	%			7.7	%			35.4	%

Deferred income taxes components

The Companies’ deferred income taxes consist of the following:

		Dominion Energy								Virginia Power								Dominion Energy Gas
At December 31,		2018				2017				2018				2017				2018				2017
(millions)
Deferred income taxes:
Total deferred income tax assets		$	2,748			$	2,686			$	1,054				$   923				$   318			$	320
Total deferred income tax liabilities			7,813				7,158				4,020				3,600				1,783				1,774
Total net deferred income tax liabilities		$	5,065			$	4,472			$	2,966				$2,677				$1,465			$	1,454
Total deferred income taxes:
Plant and equipment, primarily depreciation method and basis differences		$	4,933			$	5,056			$	3,367				$2,969				$1,170			$	1,132
Excess deferred income taxes			(993	)			(1,050	)			(678	)			(687	)			(254	)			(244	)
Nuclear decommissioning			815				829				273				260				—				—
Deferred state income taxes			626				834				284				378				175				227
Federal benefit of deferred state income taxes			(132	)			(175	)			(60	)			(79	)			(37	)			(48	)
Deferred fuel, purchased energy and gas costs			60				1				59				(3	)			1				2
Pension benefits			81				141				(132	)			(104	)			431				419
Other postretirement benefits			(5	)			(51	)			55				44				(1	)			(2	)
Loss and credit carryforwards			(1,546	)			(1,536	)			(183	)			(111	)			(7	)			(4	)
Valuation allowances			158				146				5				5				12				3
Partnership basis differences			1,135				473				—				—				26				26
Other			(67	)			(196	)			(24	)			5				(51	)			(57	)
Total net deferred income tax liabilities		$	5,065			$	4,472			$	2,966				$2,677				$1,465			$	1,454
Deferred Investment Tax Credits – Regulated Operations			51				51				51				51				—				—
Total Deferred Taxes and Deferred Investment Tax Credits		$	5,116			$	4,523			$	3,017				$2,728				$1,465			$	1,454

Summary of deductible loss and credit carryforwards

At December 31, 2018, Dominion Energy had the following deductible loss and credit carryforwards:

		Deductible Amount				Deferred Tax Asset				Valuation Allowance				Expiration Period
(millions)
Federal losses			$   120			$	25				$    —				2034
Federal investment credits			—				1,007				—				2033-2038
Federal production credits			—				150				—				2031-2038
Other federal credits			—				62				—				2031-2038
State losses			1,126				73				(61	)			2019-2038
State minimum tax credits			—				122				—				No expiration
State investment and other credits			—				107				(90	)			2019-2025
Total			$1,246			$	1,546				$(151)

At December 31, 2018, Virginia Power had the following deductible loss and credit carryforwards:

		Deductible Amount				Deferred Tax Asset				Valuation Allowance				Expiration Period
(millions)
Federal losses			$  1				$   —				$ —				2034
Federal investment credits			—				113				—				2034-2038
Federal production and other credits			—				61				—				2031-2038
State investment credits			—				9				(5	)			2024
Total			$  1				$183				$(5	)

At December 31, 2018, Dominion Energy Gas had the following deductible loss and credit carryforwards:

		Deductible Amount				Deferred Tax Asset				Valuation Allowance				Expiration Period
(millions)
Other federal credits		$	—			$	1			$	—				2032-2037
State losses			53				5				(5	)			2036-2038
Total		$	53			$	6			$	(5	)

Reconciliation of changes in unrecognized tax benefits

A reconciliation of changes in the Companies’ unrecognized tax benefits follows:

		Dominion Energy												Virginia Power												Dominion Energy Gas
		2018				2017				2016				2018				2017				2016				2018				2017				2016
(millions)
Balance at January 1		$	38			$	64			$	103			$	4			$	13			$	12				$ —			$	7				$29
Increases-prior period positions			10				1				9				—				—				4				—				—				1
Decreases-prior period positions			—				(9	)			(44	)			—				(1	)			(3	)			—				—				(19	)
Increases-current period positions			10				5				6				—				—				—				—				—				—
Settlements with tax authorities			(6	)			(23	)			(8	)			(1	)			(8	)			—				—				(7	)			(4	)
Expiration of statutes of limitations			(8	)			—				(2	)			(1	)			—				—				—				—				—
Balance at December 31		$	44			$	38			$	64			$	2			$	4			$	13				$—			$	—				$  7

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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