XML 185 R16.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Acquisitions And Dispositions | 12 Months Ended
--- | ---
Dec. 31, 2019
Text Block [Abstract] |
Acquisitions And Dispositions | Note 3. Acquisitions And Dispositions Dominion Energy Acquisition of SCANA In January 2019, Dominion Energy issued 95.6 million shares of Dominion Energy common stock, valued at $6.8 billion, representing 0.6690 of a share of Dominion Energy common stock for each share of SCANA common stock, in connection with the completion of the SCANA Combination. SCANA, through its regulated subsidiaries, is primarily engaged in the generation, transmission and distribution of electricity in the central, southern and southwestern portions of South Carolina and in the distribution of natural gas in North Carolina and South Carolina. In addition, at the closing of the SCANA Combination, SCANA marketed natural gas to retail customers in the southeast U.S. Following completion of the SCANA Combination, SCANA operates as a wholly-owned subsidiary of Dominion Energy. In addition, SCANA’s debt totaled $6.9 billion at closing. The SCANA Combination expanded Dominion Energy’s portfolio of regulated electric generation, transmission and distribution and regulated natural gas distribution infrastructure operations. Merger Approval and Conditions Merger Approval The SCANA Combination required approval of SCANA’s shareholders, FERC, the North Carolina Commission, the South Carolina Commission, the Georgia Public Service Commission and the NRC and clearance from the Federal Trade Commission under the Hart-Scott-Rodino Act. All such approvals were received prior to closing of the SCANA Combination. Various parties filed petitions for rehearing or reconsideration of the SCANA Merger Approval Order. In January 2019, the South Carolina Commission issued an order (1) granting the request of various parties and finding that DESC was imprudent in its actions by not disclosing material information to the South Carolina Office of Regulatory Staff and the South Carolina Commission with regard to costs incurred subsequent to March 2015 and (2) denying the petitions for rehearing or consideration as to other issues raised in the various petitions. The deadline to appeal the SCANA Merger Approval Order and the order on rehearing expired in April 2019, and no party has sought appeal. Refunds to Customers As a condition to the SCANA Merger Approval Order, DESC will provide refunds and restitution of $2.0 billion over 20 years with capital support from Dominion Energy. In September and October 2017, DESC received proceeds totaling $1.1 billion in full satisfaction of its share of a settlement agreement among DESC, Santee Cooper and Toshiba Corporation in connection with Westinghouse and WECTEC, both wholly-owned subsidiaries of Toshiba Corporation and responsible for the engineering and construction of the NND Project, filing for bankruptcy. The purchase price allocation below includes a previously established regulatory liability at DESC totaling $1.1 billion, of which $67 million was considered current, associated with the monetization of the bankruptcy settlement with Toshiba Corporation. In accordance with the terms of the SCANA Merger Approval Order, this regulatory liability, net of amounts that may be required to satisfy any liens against NND Project property, totaling $1.0 billion will be refunded to DESC electric service customers over a 20-year period ending in 2039. Additionally, in the first quarter of 2019, DESC recorded a reduction in operating revenue and a corresponding regulatory liability of $1.0 billion, of which $137 million was considered current, representing a refund of amounts previously collected from retail electric customers of DESC for the NND Project to be credited over an estimated 11-year period. As a result, Dominion Energy’s Consolidated Statement of Income for the year ended December 31, 2019 includes a $756 million after-tax charge. NND Project As a condition to the SCANA Merger Approval Order, DESC committed to excluding from rate recovery $2.4 billion of costs related to the NND Project and $180 million of costs associated with the purchase of the Columbia Energy Center power station. Regulatory assets included in SCANA’s historical balance sheet at December 31, 2018 reflected these disallowances. The remaining regulatory asset associated with the NND Project of $2.8 billion, of which $138 million was considered current, will be collected over a 20-year period, including a return on investment. In January 2019, DESC filed the NND Project rider in accordance with the terms of the SCANA Merger Approval Order for rates effective in February 2019 for DESC’s retail electric customers. The South Carolina Commission approved this filing in January 2019. Other Terms and Conditions
• | DESC will not file an application for a general rate case with the South Carolina Commission with a requested effective date earlier than January 2021;
• | PSNC will not file an application for a general rate case with the North Carolina Commission with a requested effective date earlier than April 2021;
• | Dominion Energy has committed to increasing SCANA’s historical level of corporate contributions to charities by $1 million per year over five years;
• | Dominion Energy will maintain DESC and PSNC’s headquarters in Cayce, South Carolina and Gastonia, North Carolina, respectively; and
• | Dominion Energy will seek to minimize reductions in local employment by allowing some DES employees supporting shared and common services functions and activities to be located in Cayce, South Carolina where it makes economic and practical sense to do so.
Purchase Price Allocation SCANA’s assets acquired and liabilities assumed have been measured at estimated fair value at closing and are included in the Dominion Energy South Carolina, Gas Transmission & Storage and Gas Distribution operating segments. The majority of the operations acquired are subject to the rate setting authority of FERC and the North and South Carolina Commissions and are therefore accounted for pursuant to ASC 980, Regulated Operations . The fair values of SCANA’s assets and liabilities subject to rate-setting and cost recovery provisions provide revenues derived from costs, including a return on investment of assets and liabilities included in rate base. As such, the fair values of these assets and liabilities equal their carrying values. Accordingly, neither the assets and liabilities acquired, nor the unaudited pro forma financial information, reflect any adjustments related to these amounts. The fair value of SCANA’s assets acquired and liabilities assumed that are not subject to the rate-setting provisions discussed above and the fair values of SCANA’s investments accounted for under the equity method have been determined using the income approach and the market approach. The valuation of SCANA’s long-term debt is considered a Level 2 fair value measurement. All other valuations are considered Level 3 fair value measurements due to the use of significant judgmental and unobservable inputs, including projected timing and amount of future cash flows and discount rates reflecting risk inherent in the future market prices. The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed is reflected as goodwill. The goodwill reflects the value associated with enhancing Dominion Energy’s portfolio of regulated operations in the growing southeast region of the U.S. The goodwill recognized is not deductible for income tax purposes, and as such, no deferred taxes have been recorded related to goodwill. The table below shows the allocation of the purchase price to the assets acquired and liabilities assumed at closing, which reflects certain adjustments related to income taxes, as discussed in Note 5, from the preliminary valuation recognized during the measurement period.
|  | Amount |
(millions) |  |  |
Total current assets (1) |  | $ | 1,782 |
Investments (2) |  |  | 224 |
Property, plant and equipment (3)(4) |  |  | 11,006 |
Goodwill |  |  | 2,609 |
Regulatory assets (5) |  |  | 3,940 |
Other deferred charges and other assets, including intangible assets (6) |  |  | 430 |
Total Assets |  |  | 19,991 |
Total current liabilities (7) |  |  | 1,556 |
Long-term debt |  |  | 6,707 |
Deferred income taxes |  |  | 1,068 |
Regulatory liabilities |  |  | 2,706 |
Other deferred credits and other liabilities (8) |  |  | 1,115 |
Total Liabilities |  |  | 13,152 |
Total purchase price (9) |  | $ | 6,839 |
(1) | Includes $389 million of cash, restricted cash and equivalents, of which $115 million is considered restricted.
(2) | Includes $31 million for equity method investments. The fair value adjustment on the equity method investments is considered to be equity method goodwill and is not amortized.
( 3 ) | Includes $105 million of certain property, plant and equipment associated with the NND Project for which Dominion Energy committed to forgo recovery in accordance with the SCANA Merger Approval Order. As a result, Dominion Energy’s Consolidated Statements of Income for the year ended December 31, 2019 include a charge of $105 million ($79 million after-tax), included in impairment of assets and other charges (reflected in the Corporate and Other segment).
( 4 ) | Nonregulated property, plant and equipment, excluding land, will be depreciated on a straight-line basis over the remaining useful lives of such property, primarily ranging from 5 to 78 years.
( 5 ) | Includes $258 million of certain income tax-related regulatory assets associated with the NND Project for which Dominion Energy committed to forgo recovery in accordance with the SCANA Merger Approval Order. See Note 5 for additional information.
( 6 ) | Intangible assets have an estimated weighted-average amortization period of approximately five years.
( 7 ) | Includes $40 million outstanding under letters of credit advances, which were repaid in January 2019, as well as $173 million outstanding commercial paper under various credit facilities. As discussed in Note 17, all credit facilities were terminated in 2019.
( 8 ) | Includes a $379 million pension and other postretirement benefit liability.
( 9 ) | Includes stock-based compensation awards with a fair value of $21 million.
Results of Operations and Unaudited Pro Forma Information The impact of the SCANA Combination on Dominion Energy’s operating revenue and net income attributable to Dominion Energy in the Consolidated Statements of Income was an increase of $3.1 billion and a decrease of $1.1 billion for the year ended December 31, 2019, respectively. Dominion Energy incurred merger and integration-related costs of $646 million in the Consolidated Statements of Income for the year ended December 31, 2019. The amount for the year ended December 31, 2019 includes $427 million for a charge related to a voluntary retirement program. See Note 22 for additional information. Of the remaining merger and integration-related costs, $210 million was recorded in other operations and maintenance expense and $9 million was recorded in interest and related charges in the Consolidated Statements of Income for the year ended December 31, 2019. During the year ended December 31, 2018, Dominion Energy incurred merger and integration-related costs of $27 million, recorded primarily in other operations and maintenance expense in the Consolidated Statements of Income. These costs consist of professional fees, the charitable contribution commitment described above, employee-related expenses, certain financing costs and other miscellaneous costs. The following unaudited pro forma financial information reflects the consolidated results of operations of Dominion Energy assuming the SCANA Combination had taken place on January 1, 2018. The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of the consolidated results of operations that would have been achieved or the future consolidated results of operations of the combined company.
|  | Twelve Months Ended December 31, |
|  | 2019 (1) |  |  | 2018 (1) |
(millions, except EPS) |  |  |  |  |  |
Operating Revenue |  | $ | 17,579 |  |  | $ | 17,505 |
Net income attributable to Dominion Energy |  |  | 3,266 |  |  |  | 2,081 |
Earnings Per Common Share – Basic |  | $ | 4.04 |  |  | $ | 2.78 |
Earnings Per Common Share – Diluted |  | $ | 4.00 |  |  | $ | 2.77 |
(1) | Amounts include adjustments for non-recurring costs directly related to the SCANA Combination.
Sale of Interest In Cove Point In October 2019, Dominion Energy signed an agreement to sell the 25% noncontrolling limited partnership interests in Cove Point not contributed to Dominion Energy Gas in the Dominion Energy Gas Restructuring to Brookfield. In December 2019, the sale was completed and Dominion Energy received cash consideration of $2.1 billion, subject to working capital adjustments. The sale was accounted for by Dominion Energy following the guidance for a change in a parent company’s ownership interest in a consolidated subsidiary. Because Dominion Energy controls Cove Point both before and after the sale of the noncontrolling interest, the changes in Dominion Energy’s ownership interest in Cove Point was accounted for as an equity transaction and no gain or loss was recognized. Acquisitions of Wholly-Owned Merchant Solar Projects The following table presents significant completed acquisitions of wholly-owned merchant solar projects by Dominion Energy.
Completed Acquisition Date |  | Seller |  |  | Number of Projects |  |  | Project Location |  |  | Project Name(s) |  |  | Initial Acquisition (millions) (1) |  |  | Project Cost (millions) (2) |  |  | Date of Commercial Operations |  |  | MW Capacity |
February 2017 |  |  | Community Energy Solar, LLC |  |  |  | 1 |  |  |  | Virginia |  |  |  | Amazon Solar Farm Virginia—Southhampton |  |  | $ | 29 |  |  | $ | 205 |  |  |  | December 2017 |  |  |  | 100 |
March 2017 |  |  | Solar Frontier Americas Holding LLC |  |  |  | 1 | (3) |  |  | California |  |  |  | Midway II |  |  |  | 77 |  |  |  | 78 |  |  |  | June 2017 |  |  |  | 30 |
May 2017 |  |  | Cypress Creek Renewables, LLC |  |  |  | 1 |  |  |  | North Carolina |  |  |  | IS37 |  |  |  | 154 |  |  |  | 160 |  |  |  | June 2017 |  |  |  | 79 |
June 2017 |  |  | Hecate Energy Virginia C&C LLC |  |  |  | 1 |  |  |  | Virginia |  |  |  | Clarke County |  |  |  | 16 |  |  |  | 16 |  |  |  | August 2017 |  |  |  | 10 |
June 2017 |  |  | Strata Solar Development, LLC/Moorings Farm 2 Holdco, LLC |  |  |  | 2 |  |  |  | North Carolina |  |  |  | Fremont, Moorings 2 |  |  |  | 20 |  |  |  | 20 |  |  |  | November 2017 |  |  |  | 10 |
September 2017 |  |  | Hecate Energy Virginia C&C LLC |  |  |  | 1 |  |  |  | Virginia |  |  |  | Cherrydale |  |  |  | 40 |  |  |  | 41 |  |  |  | November 2017 |  |  |  | 20 |
October 2017 |  |  | Strata Solar Development, LLC |  |  |  | 2 |  |  |  | North Carolina |  |  |  | Clipperton, Pikeville |  |  |  | 20 |  |  |  | 21 |  |  |  | November 2017 |  |  |  | 10 |
(1) | The purchase price was primarily allocated to property, plant and equipment.
(2) | Includes acquisition cost.
(3) | In April 2017, Dominion Energy discontinued efforts on the acquisition of the additional 20 MW solar project from Solar Frontier Americas Holding LLC.
In addition during 2016, Dominion Energy acquired 100% of the equity interests of seven solar projects in Virginia, North Carolina and South Carolina for an aggregate purchase price of $32 million, all of which was allocated to property, plant and equipment. The projects cost $421 million in total, including initial acquisition costs, and generate 221 MW combined. One of the projects commenced commercial operations in 2016 and the remaining projects commenced commercial operations in 2017. Long-term power purchase, interconnection and operation and maintenance agreements have been executed for all of the projects described above. These projects are included in Contracted Generation. Dominion Energy has claimed federal investment tax credits on these solar projects. Dominion Energy Gas Dominion Energy Gas Restructuring The Dominion Energy Gas Restructuring is considered to be a reorganization of entities under common control. As a result, Dominion Energy Gas’ basis in DCP and DMLPHCII, which includes the general partner of Dominion Energy Midstream, a controlling 75% interest in Cove Point, DECG, Dominion Energy Questar Pipeline, a 50% noncontrolling interest in White River Hub and a 25.93% noncontrolling interest in Iroquois, is equal to Dominion Energy’s cost basis in the assets and liabilities of such entities since the applicable inception dates of common control. In November 2019, following completion of the Dominion Energy Gas Restructuring, DCP and DMLPHCII are wholly-owned subsidiaries of Dominion Energy Gas and therefore are consolidated by Dominion Energy Gas. The accompanying Consolidated Financial Statements and Notes of Dominion Energy Gas have been retrospectively adjusted to include the historical results and financial position of DCP and DMLPHCII. The 25% interest in Cove Point retained by Dominion Energy, and subsequently sold to Brookfield in December 2019, and the non-Dominion Energy held interest in Dominion Energy Midstream are reflected as noncontrolling interest. The Dominion Energy Gas Restructuring includes the disposition of East Ohio and DGP by Dominion Energy Gas in November 2019. This restructuring represents a strategic shift in the operations of Dominion Energy Gas as Dominion Energy Gas’ operations consist s of LNG import/export and storage and regulated gas transmission and storage operations. As a result, the accompanying Consolidated Financial Statements and Notes of Dominion Energy Gas have been retrospectively adjusted to include the historical results and financial position of East Ohio and DGP as discontinued operations until November 2019, presented within the Corporate and Other segment. As the Dominion Energy Gas Restructuring is considered to be a reorganization of entities under common control, Dominion Energy Gas has reflected the disposition as an equity transaction. The following table represents selected information regarding the results of operations of East Ohio, which are reported as discontinued operations in Dominion Energy Gas’ Consolidated Statements of Income:
|  | Period Ended November 6, 2019 |  |  | Year Ended December 31, 2018 |  |  | Year Ended December 31, 2017 |
(millions) |  |  |  |  |  |  |  |  |
Operating revenue |  | $ | 594 |  |  | $ | 729 |  |  | $ | 728 |
Depreciation and amortization |  |  | 73 |  |  |  | 76 |  |  |  | 71 |
Other operating expenses |  |  | 399 |  |  |  | 444 |  |  |  | 428 |
Other income |  |  | 61 |  |  |  | 72 |  |  |  | 50 |
Interest and related charges |  |  | 33 |  |  |  | 37 |  |  |  | 33 |
Income tax expense |  |  | 26 |  |  |  | 53 |  |  |  | 86 |
Net income from discontinued operations |  |  | 124 |  |  |  | 191 |  |  |  | 160 |
The carrying amounts of major classes of assets and liabilities relating to East Ohio, which are reported as discontinued operations in Dominion Energy Gas’ Consolidated Balance Sheets were as follows:
|  | At December 31, 2018 |
(millions) |  |  |
Current assets of discontinued operations (1) |  | $ | 423 |
Investments |  |  | 2 |
Property, plant and equipment, net |  |  | 3,669 |
Regulatory assets |  |  | 711 |
Other deferred charges and other assets, including goodwill and intangible assets |  |  | 1,275 |
Noncurrent assets of discontinued operations |  |  | 5,657 |
Current liabilities of discontinued operations |  |  | 1,262 |
Long-term debt |  |  | 1,300 |
Deferred income taxes and investment tax credits |  |  | 716 |
Regulatory liabilities |  |  | 747 |
Other deferred credits and liabilities |  |  | 108 |
Noncurrent liabilities of discontinued operations |  |  | 2,871 |
(1) | Includes cash and cash equivalents of $9 million as of December 31, 2018.
Capital expenditures and significant noncash items relating to East Ohio included the following:
|  | Period Ended November 6, 2019 |  |  | Year Ended December 31, 2018 |  |  | Year Ended December 31, 2017 |
(millions) |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 299 |  |  | $ | 352 |  |  | $ | 348 |
Significant noncash items : |  |  |  |  |  |  |  |  |  |  |  |
Charge related to a voluntary retirement program |  |  | 20 |  |  |  | — |  |  |  | — |
Accrued capital expenditures |  |  | 2 |  |  |  | 5 |  |  |  | 8 |
The following table represents selected information regarding the results of operations of DGP, which are reported as discontinued operations in Dominion Energy Gas’ Consolidated Statements of Income:
|  | Period Ended November 6, 2019 |  |  | Year Ended December 31, 2018 |  |  | Year Ended December 31, 2017 |
(millions) |  |  |  |  |  |  |  |  |
Operating revenue |  | $ | 125 |  |  | $ | 220 |  |  | $ | 114 |
Depreciation and amortization |  |  | 4 |  |  |  | 15 |  |  |  | 15 |
Impairment of assets and related charges |  |  | — |  |  |  | 219 |  |  |  | — |
Other operating expenses |  |  | 97 |  |  |  | 206 |  |  |  | 91 |
Income tax expense (benefit) |  |  | 7 |  |  |  | (53 | ) |  |  | 5 |
Net income (loss) from discontinued operations |  | $ | 17 |  |  | $ | (167 | ) |  | $ | 3 |
The carrying amounts of major classes of assets and liabilities relating to DGP, which are reported as discontinued operations in Dominion Energy Gas’ Consolidated Balance Sheets were as follows:
|  | At December 31, 2018 |
(millions) |  |  |
Current assets of discontinued operations (1) |  | $ | 21 |
Noncurrent assets of discontinued operations (2) |  |  | 192 |
Current liabilities of discontinued operations |  |  | 11 |
Noncurrent liabilities of discontinued operations |  |  | 25 |
(1) | Includes cash and cash equivalents of less than $1 million.
(2) | Primarily property, plant and equipment, net.
Capital expenditures and significant noncash items of DGP included the following:
|  | Period Ended November 6, 2019 |  |  | Year Ended December 31, 2018 |  |  | Year Ended December 31, 2017 |
(millions) |  |  |  |  |  |  |  |  |
Capital expenditures |  | $ | 11 |  |  | $ | 6 |  |  | $ | 8 |
Significant noncash items : |  |  |  |  |  |  |  |  |  |  |  |
Impairment of assets and related charges |  |  | — |  |  |  | (219 | ) |  |  | — |

X
- Definition Mergers, acquisitions and dispositions including property plant and equipment sales disclosures. + References No definition available. + Details
Name: | d_MergersAcquisitionsAndDispositionsIncludingPropertyPlantAndEquipmentSalesDisclosuresTextBlock
Namespace Prefix: | d_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_TextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration