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Operating Segments

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Operating Segments

Note 26. Operating Segments

The Companies are organized primarily on the basis of products and services sold in the U.S. A description of the operations included in the Companies’ primary operating segments is as follows:

Primary Operating Segment		Description of Operations		Dominion Energy		Virginia Power		Dominion Energy Gas
Dominion Energy Virginia		Regulated electric distribution		X		X
		Regulated electric transmission		X		X
		Regulated electric generation fleet(1)		X		X
Gas Transmission & Storage		Regulated gas transmission and storage(2)		X				X
		LNG terminalling and storage		X				X
		Nonregulated retail energy marketing		X
Gas Distribution		Regulated gas distribution and storage(3)		X
Dominion Energy South Carolina		Regulated electric distribution		X
		Regulated electric transmission		X
		Regulated electric generation fleet		X
		Regulated gas distribution and storage		X
Contracted Generation		Merchant electric generation fleet		X

(1) Includes Virginia Power’s nonjurisdictional generation operations.

(2) Includes gathering and processing activities.

(3) Includes Wexpro’s natural gas development and production operations.

In addition to the operating segments above, the Companies also report a Corporate and Other segment.

Dominion Energy

The Corporate and Other Segment of Dominion Energy includes its corporate, service companies and other functions (including unallocated debt). In addition, Corporate and Other includes specific items attributable to Dominion Energy’s operating segments that are not included in profit measures evaluated by executive management in assessing the segments’ performance or in allocating resources.

In 2019, Dominion Energy reported after-tax net expenses of $2.6 billion in the Corporate and Other segment, with $2.0 billion of the net expenses attributable to specific items related to its operating segments.

The net expenses for specific items in 2019 primarily related to the impact of the following items:

• A $1.0 billion ($756 million after-tax) charge for refunds of amounts previously collected from retail electric customers of DESC for the NND Project, attributable to Dominion Energy South Carolina;

• $641 million ($480 million after-tax) of charges associated with litigation acquired in the SCANA Combination, attributable to Dominion Energy South Carolina;

• $484 million ($315 million after-tax) of charges for merger and integration-related costs associated with the SCANA Combination, including a $444 million ($332 million after-tax) charge related to a voluntary retirement program, attributable to:

• Dominion Energy Virginia ($151 million after-tax);

• Gas Distribution ($56 million after-tax);

• Dominion Energy South Carolina ($75 million after-tax); and

• Contracted Generation ($38 million after-tax); partially offset by

• Gas Transmission & Storage ($5 million after-tax benefit);

• A $346 million ($257 million after-tax) charge related to the early retirement of certain Virginia Power electric generation facilities, attributable to Dominion Energy Virginia;

• A $194 million tax charge for $258 million of income tax-related regulatory assets acquired in the SCANA Combination for which Dominion Energy committed to forgo recovery, attributable to Dominion Energy South Carolina;

• A $160 million ($119 million after-tax) charge related to Virginia Power’s planned early retirement of certain automated meter reading infrastructure, attributable to Dominion Energy Virginia;

• A $135 million ($100 million after-tax) charge related to Virginia Power’s contract termination with a non-utility generator, attributable to Dominion Energy Virginia;

• A $114 million ($86 million after-tax) charge for property, plant and equipment acquired in the SCANA Combination primarily for which Dominion Energy committed to forgo recovery, attributable to Dominion Energy South Carolina; partially offset by

• A $553 million ($411 million after-tax) net gain related to investments in nuclear decommissioning trust funds attributable to:

• Dominion Energy Virginia ($49 million after-tax); and

• Contracted Generation ($362 million after-tax); and

• A $113 million ($84 million after-tax) benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019, attributable to Dominion Energy Virginia.

In 2018, Dominion Energy reported after-tax net expenses of $611 million in the Corporate and Other segment, with $88 million of the net expenses attributable to specific items related to its operating segments.

The net expenses for specific items in 2018 primarily related to the impact of the following items:

• A $219 million ($164 million after-tax) charge related to the impairment of certain gathering and processing assets attributable to Gas Transmission & Storage;

• A $215 million ($160 million after-tax) charge associated with Virginia legislation enacted in March 2018 that requires one-time rate credits of certain amounts to utility customers, attributable to Dominion Energy Virginia;

• A $170 million ($134 million after-tax) net loss related to our investments in nuclear decommissioning trust funds attributable to:

• Dominion Energy Virginia ($14 million after-tax); and

• Contracted Generation ($120 million after-tax);

• A $124 million ($88 million after-tax) charge for disallowance of FERC-regulated plant attributable to Gas Transmission & Storage;

• An $81 million ($60 million after-tax) charge associated primarily with the asset retirement obligations for ash ponds and landfills at certain utility generation facilities in connection with the enactment of Virginia legislation in April 2018 attributable to Dominion Energy Virginia; and

• A $70 million ($52 million after-tax) charge associated with major storm damage and service restoration attributable to Dominion Energy Virginia; partially offset by

• An $828 million ($619 million after-tax) benefit associated with the sale of certain merchant generation facilities and equity method investments attributable to:

• Contracted Generation ($229 million after-tax); and

• Gas Transmission & Storage ($390 million after-tax).

In 2017, Dominion Energy reported after-tax net benefits of $377 million in the Corporate and Other segment, with $861 million of the net benefits attributable to specific items related to its operating segments.

The net benefits for specific items in 2017 primarily related to the impact of the following items:

• A $1.0 billion tax benefit resulting from the remeasurement of deferred income taxes as a result of the 2017 Tax Reform Act, primarily attributable to:

• Dominion Energy Virginia ($83 million);

• Gas Transmission & Storage ($302 million);

• Gas Distribution ($56 million);

• Contracted Generation ($569 million); partially offset by

• $158 million ($96 million after-tax) of charges associated with equity method investments in wind-powered generation facilities, attributable to Contracted Generation.

The following table presents segment information pertaining to Dominion Energy’s operations:

Year Ended December 31,		Dominion Energy Virginia				Gas Transmission & Storage				Gas Distribution				Dominion Energy South Carolina				Contracted Generation				Corporate and Other				Adjustments & Eliminations				Consolidated Total
(millions)
2019
Total revenue from external customers			$8,170				$3,074				$2,367				$2,948				$1,135				$(1,122	)			$       —				$16,572
Intersegment revenue			(13	)			247				18				4				15				1,199				(1,470	)			—
Total operating revenue			8,157				3,321				2,385				2,952				1,150				77				(1,470	)			16,572
Depreciation, depletion and amortization			1,216				400				335				452				179				73				—				2,655
Equity in earnings of equity method investees			—				161				2				(4	)			(1	)			10				—				168
Interest income			11				211				4				9				92				160				(386	)			101
Interest and related charges			530				405				116				242				98				768				(386	)			1,773
Income tax expense (benefit)			482				262				114				163				20				(690	)			—				351
Net income (loss) attributable to Dominion Energy			1,786				934				488				430				276				(2,556	)			—				1,358
Investment in equity method investees			—				1,517				32				—				74				23				—				1,646
Capital expenditures			3,002				431				848				562				367				111				—				5,321
Total assets (billions)			43.7				20.9				16.0				15.8				10.2				6.9				(9.7	)			103.8
2018
Total revenue from external customers			$8,401				$1,867				$1,769				$     —				$1,487				$   (249	)			$      91				$13,366
Intersegment revenue			(552	)			723				16				—				8				723				(918	)			—
Total operating revenue			7,849				2,590				1,785				—				1,495				474				(827	)			13,366
Depreciation, depletion and amortization			1,158				348				263				—				213				18				—				2,000
Equity in earnings of equity method investees			—				178				—				—				18				1				—				197
Interest income			10				143				—				—				80				122				(271	)			84
Interest and related charges			516				262				79				—				124				784				(272	)			1,493
Income tax expense (benefit)			380				236				95				—				75				(206	)			—				580
Net income (loss) attributable to Dominion Energy			1,596				844				373				—				245				(611	)			—				2,447
Investment in equity method investees			—				1,159				—				—				82				37				—				1,278
Capital expenditures			2,640				765				647				—				247				106				—				4,405
Total assets (billions)			39.1				22.6				11.8				—				9.0				8.3				(12.9	)			77.9
2017
Total revenue from external customers			$8,254				$1,054				$1,778				$     —				$1,345				$     (27	)			$    182				$12,586
Intersegment revenue			(688	)			946				17				—				9				724				(1,008	)			—
Total operating revenue			7,566				2,000				1,795				—				1,354				697				(826	)			12,586
Depreciation, depletion and amortization			1,141				260				258				—				200				46				—				1,905
Equity in earnings of equity method investees			—				158				—				—				(171	)			(5	)			—				(18	)
Interest income			19				114				—				—				77				94				(222	)			82
Interest and related charges			497				100				72				—				110				648				(222	)			1,205
Income tax expense (benefit)			865				291				195				—				(160	)			(1,221	)			—				(30	)
Net income (loss) attributable to Dominion Energy			1,466				552				351				—				253				377				—				2,999
Capital expenditures			2,726				1,489				452				—				979				263				—				5,909

Intersegment sales and transfers for Dominion Energy are based on contractual arrangements and may result in intersegment profit or loss that is eliminated in consolidation.

Virginia Power

The Corporate and Other Segment of Virginia Power primarily includes specific items attributable to its operating segment that are not included in profit measures evaluated by executive management in assessing the segment’s performance or in allocating resources.

In 2019, Virginia Power reported after-tax net expenses of $634 million in its Corporate and Other segment with $627 million of the net expenses attributable to its operating segment.

The net expenses for specific items in 2019 primarily related to the impact of the following items:

• A $346 million ($257 million after-tax) charge related to the early retirement of certain electric generation facilities;

• A $198 million ($146 million after-tax) charge related to a voluntary retirement program;

• A $160 million ($119 million after-tax) charge related to the planned early retirement of certain automated meter reading infrastructure;

• A $135 million ($100 million after-tax) charge related to a contract termination with a non-utility generator; and

• A $62 million ($46 million after-tax) charge related to the abandonment of a project at an electric generating facility, partially offset by

• A $113 million ($84 million after-tax) benefit from the revision of future ash pond and landfill closure costs as a result of Virginia legislation enacted in March 2019.

In 2018, Virginia Power reported after-tax net expenses of $312 million in its Corporate and Other segment, all of which were attributable to its primary operating segment.

The net expenses for specific items in 2018 primarily related to the impact of the following items:

• A $215 million ($160 million after-tax) charge associated with Virginia legislation enacted in March 2018 that requires one-time rate credits of certain amounts to utility customers;

• An $81 million ($60 million after-tax) charge associated primarily with the asset retirement obligations for ash ponds and landfills at certain utility generation facilities in connection with the enactment of Virginia legislation in April 2018; and

• A $70 million ($52 million after-tax) charge associated with major storm damage and service restoration.

In 2017, Virginia Power reported an after-tax net benefit of $74 million in its Corporate and Other segment, all of which was attributable to its primary operating segment.

The net benefit for specific items in 2017 primarily related to the impact of the following item:

• A $93 million tax benefit resulting from the remeasurement of deferred income taxes as a result of the 2017 Tax Reform Act.

The following table presents segment information pertaining to Virginia Power’s operations:

Year Ended December 31,		Dominion Energy Virginia				Corporate and Other				Consolidated Total
(millions)
2019
Operating revenue			$8,137				$  (29	)			$8,108
Depreciation and amortization			1,215				8				1,223
Interest income			11				—				11
Interest expense (benefit) and related charges			529				(5	)			524
Income tax expense (benefit)			481				(217	)			264
Net income (loss)			1,783				(634	)			1,149
Capital expenditures			2,981				—				2,981
Total assets (billions)			41.4				—				41.4
2018
Operating revenue			$7,835				$(216	)			$7,619
Depreciation and amortization			1,157				(25	)			1,132
Interest income (expense)			10				—				10
Interest expense (benefit) and related charges			516				(5	)			511
Income tax expense (benefit)			378				(78	)			300
Net income (loss)			1,594				(312	)			1,282
Capital expenditures			2,542				—				2,542
Total assets (billions)			37.0				(0.1	)			36.9
2017
Operating revenue			$7,556				$    —				$7,556
Depreciation and amortization			1,141				—				1,141
Interest income (expense)			19				—				19
Interest expense (benefit) and related charges			497				(3	)			494
Income tax expense (benefit)			868				(94	)			774
Net income			1,466				74				1,540
Capital expenditures			2,729				—				2,729

Dominion Energy Gas

The Corporate and Other Segment of Dominion Energy Gas primarily includes specific items attributable to Dominion Energy Gas’ operating segment that are not included in profit measures evaluated by executive management in assessing the segment’s performance or in allocating resources and the effect of certain items recorded at Dominion Energy Gas as a result of Dominion Energy’s basis in the net assets contributed. In addition, Corporate and Other includes the net impact of discontinued operations, which are discussed in Note 3.

In 2019, Dominion Energy Gas reported an after-tax net benefit of $127 million in its Corporate and Other segment, with $12 million of net expense attributable to its operating segment.

The net expense for specific items in 2019 primarily related to the impact of the following items:

• A $48 million tax benefit resulting from changes in tax status of certain subsidiaries in connection with the Dominion Energy Gas Restructuring; and

• A $42 million ($31 million after-tax) charge related to a voluntary retirement program.

In 2018, Dominion Energy Gas reported after-tax net expenses of $90 million in its Corporate and Other segment, with $107 million of these net expenses attributable to its operating segment.

The net expense for specific items in 2018 primarily related to a $124 million ($88 million after-tax) charge for disallowance of FERC-regulated plant.

In 2017, Dominion Energy Gas reported an after-tax net benefit of $389 million in its Corporate and Other segment, with $156 million of the net benefit attributable to its operating segment.

The net benefit for specific items in 2017 primarily related to a $169 million tax benefit resulting from the remeasurement of deferred income taxes as a result of the 2017 Tax Reform Act.

The following table presents segment information pertaining to Dominion Energy Gas’ operations:

Year Ended December 31,		Gas Transmission & Storage				Corporate and Other				Consolidated Total
(millions)
2019
Operating revenue			$2,186				$  (17	)			$2,169
Depreciation and amortization			367				—				367
Equity in earnings of equity method investees			43				—				43
Interest income			105				—				105
Interest and related charges			309				2				311
Income tax expense (benefit)			170				(69	)			101
Net Income from discontinued operations			—				141				141
Net Income attributable to Dominion Energy Gas			594				127				721
Investment in equity method investees			312				—				312
Capital expenditures			391				313				704
Total assets (billions)			18.8				—				18.8
2018
Operating revenue			$1,996				$    —				$1,996
Depreciation and amortization			333				—				333
Equity in earnings of equity method investees			54				—				54
Interest income			26				—				26
Interest and related charges			173				1				174
Income tax expense (benefit)			226				(102	)			124
Net Income from discontinued operations			—				24				24
Net Income (loss) attributable to Dominion Energy Gas			571				(90	)			481
Investment in equity method investees			339				—				339
Capital expenditures			749				360				1,109
Total assets (billions)			19.9				6.9				26.8
2017
Operating revenue			$1,523				$    —				$1,523
Depreciation and amortization			242				—				242
Equity in earnings of equity method investees			47				—				47
Interest income			4				—				4
Interest and related charges			60				—				60
Income tax expense (benefit)			189				(254	)			(65	)
Net Income from discontinued operations			—				163				163
Net Income attributable to Dominion Energy Gas			314				389				703
Capital expenditures			1,459				356				1,815

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- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

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