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Income Taxes | 6 Months Ended
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Jun. 30, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Note 5. Income Taxes 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 |  |
Six Months Ended June 30, |  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |  |
U.S. statutory rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | % |
Increases (reductions) resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
State taxes, net of federal benefit |  |  | 5.6 |  |  |  | 0.7 |  |  |  | 4.9 |  |  |  | 4.7 |  |  |  | (255.3 | ) |  |  | 3.0 |  |
Investment tax credits |  |  | 3.9 |  |  |  | (3.8 | ) |  |  | (11.3 | ) |  |  | (5.2 | ) |  |  | — |  |  |  | — |  |
Production tax credits |  |  | 0.3 |  |  |  | (1.1 | ) |  |  | (2.0 | ) |  |  | (0.8 | ) |  |  | — |  |  |  | — |  |
Reversal of excess deferred income taxes |  |  | 1.5 |  |  |  | (6.9 | ) |  |  | (0.8 | ) |  |  | (4.2 | ) |  |  | (68.4 | ) |  |  | (0.9 | ) |
Write-off of regulatory assets |  |  | (4.2 | ) |  |  | (41.6 | ) |  |  | — |  |  |  | — |  |  |  | 189.4 |  |  |  | — |  |
AFUDC - equity |  |  | 0.5 |  |  |  | (1.9 | ) |  |  | (0.6 | ) |  |  | (0.1 | ) |  |  | (36.8 | ) |  |  | (0.5 | ) |
Other, net |  |  | 0.9 |  |  |  | (0.3 | ) |  |  | 1.1 |  |  |  | 0.4 |  |  |  | (467.1 | ) | (1) |  | (4.3 | ) | (1)
Effective tax rate |  |  | 29.5 | % |  |  | (33.9 | )% |  |  | 12.3 | % |  |  | 15.8 | % |  |  | (617.2 | )% |  |  | 18.3 | % |
(1) | Includes (276.0)% and (4.0)% relating to the absence of tax on noncontrolling interest in 2020 and 2019, respectively.
For the Companies’ rate-regulated entities, deferred taxes will reverse at the weighted average rate used to originate the deferred tax liability, which in some cases will be 35%. The Companies have recorded an estimate of excess deferred income tax amortization in 2020. The reversal of these excess deferred income taxes will impact the effective tax rate and rates charged to customers. See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2019 for more information. For the six months ended June 30, 2020, Dominion Energy’s effective tax rate reflects a charge of $81 million for the write-off of tax-related regulatory assets associated with the impacts of the cancellation of the Atlantic Coast Pipeline Project and related portions of the Supply Header Project. In addition, Dominion Energy Gas’ effective tax rate is a function of the nominal year-to-date pre-tax income driven by a charge associated with the Supply Header Project as discussed in Note 2. In March 2020, the CARES Act was enacted which includes several significant business tax provisions that modify or temporarily suspend certain provisions of the 2017 Tax Reform Act. The CARES Act provisions are intended to improve cash flow and liquidity by, among other things, providing a temporary five-year carryback for certain net operating losses, accelerating the refund of previously generated corporate alternative minimum tax credits and temporarily loosening the business interest limitation to 50% of adjusted taxable income for certain businesses. While Dominion Energy intends to utilize the income tax provisions of the CARES Act to accelerate the recognition of certain tax attributes, where applicable, they are not expected to provide a material benefit. In July 2020, the U.S. Department of Treasury issued final regulations providing guidance about the limitation on the deduction for business interest expenses and issued proposed regulations on the application of these rules to certain pass-through entities and partners in those entities under the 2017 Tax Reform Act as modified by the CARES Act. Dominion Energy is currently assessing the impact of these regulations, but expects interest expense to be deductible in 2020. In connection with the SCANA Combination, Dominion Energy committed to forgo, or limit, the recovery of certain income tax-related regulatory assets associated with the NND Project. Dominion Energy’s 2019 effective tax rate reflects deferred income tax expense of $198 million in satisfaction of this commitment. Dominion Energy’s 2019 effective tax rate also reflects the changes in consolidated state income taxes resulting from the SCANA Combination. As of June 30, 2020, there have been no material changes in the Companies’ unrecognized tax benefits or possible changes that could reasonably be expected to occur during the next twelve months. See Note 5 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2019, for a discussion of these unrecognized tax benefits.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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