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Investments | 9 Months Ended
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Sep. 30, 2020
Investments Debt And Equity Securities [Abstract] |
Investments | Note 10. Investments Dominion Energy Equity and Debt Securities Rabbi Trust Securities Equity and fixed income securities and cash equivalents in Dominion Energy’s rabbi trusts and classified as trading totaled $132 million and $120 million at September 30, 2020 and December 31, 2019, respectively. Decommissioning Trust Securities Dominion Energy holds equity and fixed income securities, insurance contracts and cash equivalents in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Dominion Energy’s decommissioning trust funds are summarized below:
|  | Amortized Cost |  |  | Total Unrealized Gains |  |  | Total Unrealized Losses |  |  | Allowance for Credit Losses |  |  | Fair Value |
(millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
September 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 1,735 |  |  | $ | 2,517 |  |  | $ | (73 | ) |  | $ | — |  |  | $ | 4,179 |
Fixed income securities:(2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt instruments |  |  | 569 |  |  |  | 49 |  |  |  | (1 | ) |  |  | — |  |  |  | 617 |
Government securities |  |  | 1,128 |  |  |  | 64 |  |  |  | (1 | ) |  |  | — |  |  |  | 1,191 |
Common/collective trust funds |  |  | 138 |  |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | 142 |
Insurance contracts |  |  | 227 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 227 |
Cash equivalents and other(3) |  |  | 1 |  |  |  | 1 |  |  |  | (1 | ) |  |  | — |  |  |  | 1 |
Total |  | $ | 3,798 |  |  | $ | 2,635 |  |  | $ | (76 | ) | (4) | $ | — |  | (5) | $ | 6,357 |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 1,807 |  |  | $ | 2,451 |  |  | $ | (20 | ) |  |  |  |  |  | $ | 4,238 |
Fixed income securities:(2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt instruments |  |  | 434 |  |  |  | 29 |  |  |  | — |  |  |  |  |  |  |  | 463 |
Government securities |  |  | 1,108 |  |  |  | 39 |  |  |  | (2 | ) |  |  |  |  |  |  | 1,145 |
Common/collective trust funds |  |  | 115 |  |  |  | 4 |  |  |  | — |  |  |  |  |  |  |  | 119 |
Insurance contracts |  |  | 214 |  |  |  | — |  |  |  | — |  |  |  |  |  |  |  | 214 |
Cash equivalents and other(3) |  |  | 13 |  |  |  | — |  |  |  | — |  |  |  |  |  |  |  | 13 |
Total |  | $ | 3,691 |  |  | $ | 2,523 |  |  | $ | (22 | ) | (4) |  |  |  |  | $ | 6,192 |
(1) | Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability.
(2) | Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability. Effective January 2020, changes in allowance for credit losses are included in other income.
(3) | Includes pending purchases of securities of $36 million and $1 million at September 30, 2020 and December 31, 2019, respectively.
(4) | The fair value of securities in an unrealized loss position was $523 million and $298 million at September 30, 2020 and December 31, 2019, respectively.
(5) | The allowance for credit losses associated with fixed income securities decreased from March 31, 2020 by $21 million. These recoveries are a result of improvements in credit spreads experienced in the market between March 31, 2020 and June 30, 2020. There were no further changes in the allowance for credit losses between June 30, 2020 and September 30, 2020.
The portion of unrealized gains and losses that relates to equity securities held within Dominion Energy’s nuclear decommissioning trusts is summarized below:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
(millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net gains recognized during the period |  | $ | 308 |  |  | $ | 40 |  |  | $ | 20 |  |  | $ | 610 |
Less: Net gains recognized during the period on securities sold during the period |  |  | (15 | ) |  |  | (17 | ) |  |  | (6 | ) |  |  | (61 | )
Unrealized gains recognized during the period on securities still held at September 30, 2020 and 2019(1) |  | $ | 293 |  |  | $ | 23 |  |  | $ | 14 |  |  | $ | 549 |
(1) | Included in other income and the nuclear decommissioning trust regulatory liability.
The fair value of Dominion Energy’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at September 30, 2020 by contractual maturity is as follows:
|  | Amount |
(millions) |  |  |  |
Due in one year or less |  | $ | 194 |
Due after one year through five years |  |  | 503 |
Due after five years through ten years |  |  | 485 |
Due after ten years |  |  | 768 |
Total |  | $ | 1,950 |
Presented below is selected information regarding Dominion Energy’s equity and fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds.
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
(millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from sales |  | $ | 1,208 |  |  | $ | 429 |  |  | $ | 2,868 |  |  | $ | 1,311 |
Realized gains(1) |  |  | 48 |  |  |  | 53 |  |  |  | 188 |  |  |  | 152 |
Realized losses(1) |  |  | 29 |  |  |  | 25 |  |  |  | 159 |  |  |  | 75 |
(1) | Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.
Virginia Power Virginia Power holds equity and fixed income securities and cash equivalents in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power’s decommissioning trust funds are summarized below:
|  | Amortized Cost |  |  | Total Unrealized Gains |  |  | Total Unrealized Losses |  |  | Allowance for Credit Losses |  |  | Fair Value |
(millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
September 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 919 |  |  | $ | 1,161 |  |  | $ | (48 | ) |  | $ | — |  |  | $ | 2,032 |
Fixed income securities:(2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt instruments |  |  | 324 |  |  |  | 28 |  |  |  | — |  |  |  | — |  |  |  | 352 |
Government securities |  |  | 463 |  |  |  | 23 |  |  |  | (1 | ) |  |  | — |  |  |  | 485 |
Common/collective trust funds |  |  | 45 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 45 |
Cash equivalents and other(3) |  |  | 19 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 19 |
Total |  | $ | 1,770 |  |  | $ | 1,212 |  |  | $ | (49 | ) | (4) | $ | — |  | (5) | $ | 2,933 |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 894 |  |  | $ | 1,144 |  |  | $ | (11 | ) |  |  |  |  |  | $ | 2,027 |
Fixed income securities:(2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate debt instruments |  |  | 241 |  |  |  | 15 |  |  |  | — |  |  |  |  |  |  |  | 256 |
Government securities |  |  | 534 |  |  |  | 14 |  |  |  | (2 | ) |  |  |  |  |  |  | 546 |
Common/collective trust funds |  |  | 51 |  |  |  | — |  |  |  | — |  |  |  |  |  |  |  | 51 |
Cash equivalents and other |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  |  |  |  |  | 1 |
Total |  | $ | 1,721 |  |  | $ | 1,173 |  |  | $ | (13 | ) | (4) |  |  |  |  | $ | 2,881 |
(1) | Unrealized gains and losses on equity securities are included in other income and the nuclear decommissioning trust regulatory liability.
(2) | Unrealized gains and losses on fixed income securities are included in AOCI and the nuclear decommissioning trust regulatory liability. Effective January 2020, changes in allowance for credit losses are included in other income.
(3) | Includes pending sales of securities o f $5 million at September 30, 2020.
(4) | The fair value of securities in an unrealized loss position was $283 million and $185 million at September 30, 2020 and December 31, 2019, respectively.
(5) | The allowance for credit losses associated with fixed income securities decreased from March 31, 2020 by $12 million. These recoveries are a result of improvements in credit spreads experienced in the market between March 31, 2020 and June 30, 2020. There were no further changes in the allowance for credit losses between June 30, 2020 and September 30, 2020.
The portion of unrealized gains and losses that relates to equity securities held within Virginia Power’s nuclear decommissioning trusts is summarized below:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
(millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net gains (losses) recognized during the period |  | $ | 138 |  |  | $ | 30 |  |  | $ | (16 | ) |  | $ | 286 |
Less: Net gains recognized during the period on securities sold during the period |  |  | (6 | ) |  |  | (7 | ) |  |  | (3 | ) |  |  | (15 | )
Unrealized gains (losses) recognized during the period on securities still held at September 30, 2020 and 2019(1) |  | $ | 132 |  |  | $ | 23 |  |  | $ | (19 | ) |  | $ | 271 |
(1) | Included in other income and the nuclear decommissioning trust regulatory liability.
The fair value of Virginia Power’s fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds at September 30, 2020 by contractual maturity is as follows:
|  | Amount |
(millions) |  |  |  |
Due in one year or less |  | $ | 66 |
Due after one year through five years |  |  | 234 |
Due after five years through ten years |  |  | 268 |
Due after ten years |  |  | 314 |
Total |  | $ | 882 |
Presented below is selected information regarding Virginia Power’s equity and fixed income securities with readily determinable fair values held in nuclear decommissioning trust funds.
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
(millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Proceeds from sales |  | $ | 164 |  |  | $ | 230 |  |  | $ | 694 |  |  | $ | 677 |
Realized gains(1) |  |  | 18 |  |  |  | 21 |  |  |  | 73 |  |  |  | 46 |
Realized losses(1) |  |  | 10 |  |  |  | 6 |  |  |  | 58 |  |  |  | 18 |
(1) | Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.
Equity Method Investments Dominion Energy Dominion Energy recorded equity earnings on its investments of less than $1 million and $5 million for the nine months ended September 30, 2020 and 2019, respectively, in other income in its Consolidated Statements of Income. In addition, Dominion Energy recorded equity earnings (losses) of $(2.3) billion and $84 million for the nine months ended September 30, 2020 and 2019, respectively, in discontinued operations related to its investment in Atlantic Coast Pipeline. Dominion Energy received distributions of $25 million and $28 million for the nine months ended September 30, 2020 and 2019, respectively. At September 30, 2020 and December 31, 2019, the net difference between the carrying amount of Dominion Energy’s investments and its share of underlying equity in net assets was $(19) million and $(35) million, respectively. At September 30, 2020, these differences are comprised of $27 million of equity method goodwill that is not being amortized and a net $(46) million basis difference primarily attributable to an unfunded commitment made to Align RNG. At December 31, 2019, these differences are comprised of $11 million of equity method goodwill that is not being amortized and a net $(46) million basis difference from Dominion Energy’s investments in Fowler Ridge, Atlantic Coast Pipeline and an unfunded commitment made to Align RNG. Atlantic Coast Pipeline In September 2014, Dominion Energy, along with Duke Energy and Southern, announced the formation of Atlantic Coast Pipeline for the purpose of constructing an approximately 600-mile natural gas pipeline running from West Virginia through Virginia to North Carolina. Subsidiaries and affiliates of Dominion Energy, Duke Energy and Southern had planned to be customers of the pipeline under 20-year contracts. In March 2020, Dominion Energy completed the acquisition from Southern of its 5% membership interest in Atlantic Coast Pipeline and its 100% ownership interest in Pivotal LNG, Inc., for $184 million in aggregate, subject to certain purchase price adjustments. Pivotal LNG, Inc. includes a 50% noncontrolling interest in JAX LNG. Following completion of the acquisition, Dominion Energy owns a 53% noncontrolling membership interest in Atlantic Coast Pipeline with Duke Energy owning the remaining interest. Atlantic Coast Pipeline continues to be reflected as an equity method investment as the power to direct the activities most significant to Atlantic Coast Pipeline is shared with Duke Energy. As a result, Dominion Energy has the ability to exercise significant influence, but not control, over the investee. The Atlantic Coast Pipeline Project had been the subject of challenges in federal courts including, among others, challenges of the Atlantic Coast Pipeline Project’s biological opinion and incidental take statement, permits providing right of way crossings of certain federal lands, the Army Corps of Engineers 404 permit, the air permit for a compressor station at Buckingham, Virginia, and the FERC order approving the CPCN. Each of these challenges alleged non-compliance on the part of federal and state permitting authorities and adverse ecological consequences if the Atlantic Coast Pipeline Project was permitted to proceed. Since December 2018, notable developments in these challenges included a stay in December 2018 issued by the U.S. Court of Appeals for the Fourth Circuit and the same court’s July 2019 vacatur of the biological opinion and incidental take statement (which stay and subsequent vacatur halted most project construction activity), the U.S. Court of Appeals for the Fourth Circuit decisions vacating the permits to cross certain federal forests and the air permit for a compressor station at Buckingham, Virginia, the U.S. Court of Appeals for the Fourth Circuit’s remand to the Army Corps of Engineers of Atlantic Coast Pipeline’s Huntington District 404 verification and the U.S. Court of Appeals for the Fourth Circuit’s remand to the National Park Service of Atlantic Coast Pipeline’s Blue Ridge Parkway right-of-way. In June 2019, the Solicitor General of the U.S. and Atlantic Coast Pipeline filed petitions requesting that the Supreme Court of the U.S. hear the case regarding the Appalachian Trail crossing and in June 2020, the Supreme Court of the U.S. ruled in favor of the Atlantic Coast Pipeline, reversing the lower court’s decision and remanding the case back to the U.S. Court of Appeals for the Fourth Circuit. The project also faced new and serious challenges from uncertainty related to NWP 12, specifically, from the decision of the U.S. District Court for the District of Montana in April 2020 vacating an NWP 12 issued by the Army Corps of Engineers, including among other things gas pipelines, followed by a U.S. Court of Appeals for the Ninth Circuit ruling in May 2020 denying a stay of that decision. In July 2020, the Supreme Court of the U.S. issued an order allowing other new oil and gas pipeline projects to use the NWP 12 process pending appeal to the U.S. Court of Appeals for the Ninth Circuit; however, that did not decrease the uncertainty associated with an eventual ruling. The Montana district court decision was viewed as likely to prompt similar challenges in other federal circuit courts related to permits issued under NWP 12, including for the Atlantic Coast Pipeline Project. In July 2020, as a result of the continued permitting delays, growing legal uncertainties and the need to incur significant capital expenditures to maintain project timing before such uncertainties could be resolved, Dominion Energy and Duke Energy announced the cancellation of the Atlantic Coast Pipeline Project. As a result of the determination of the probable abandonment of the Atlantic Coast Pipeline Project in June 2020, Dominion Energy recorded equity method earnings (losses) of $(61) million ($(45) million after-tax) and $(2.3) billion ($(1.8) billion after-tax) for the three and nine months ended September 30, 2020 and $31 million ($31 million after-tax) and $84 million ($85 million after-tax) for the three and nine months ended September 30, 2019, respectively. In connection with Dominion Energy’s decision to sell substantially all of its gas transmission and storage operations, Dominion Energy has reflected the results of its equity method investment in Atlantic Coast Pipeline as discontinued operations in its C onsolidated S tatements of Income. At September 30, 2020, Dominion Energy has also recorded a liability of $1.1 billion within other current liabilities in its Consolidated Balance Sheet, as a result of its share of equity losses exceeding its investment which reflects Dominion Energy’s obligations on behalf of Atlantic Coast Pipeline related to its credit facility and AROs. In October 2017, Dominion Energy entered into a guarantee agreement to support a portion of Atlantic Coast Pipeline’s obligation under a $3.4 billion revolving credit facility with a stated maturity date of October 2021. As of September 30, 2020, Atlantic Coast Pipeline had borrowed $1.8 billion against the revolving credit facility. In July 2020, the capacity of the revolving credit facility was reduced from $3.4 billion to $1.9 billion. Dominion Energy’s Consolidated Balance Sheets include a liability of $14 million associated with this guarantee agreement at December 31, 2019. The $1.1 billion liability at September 30, 2020 discussed above includes a $48 million adjustment related to this guarantee agreement that is reflected within equity as a cumulative effect of a change in accounting principle upon adoption of the new credit loss standard in January 2020. Dominion Energy recorded contributions of $45 million and $47 million during the three months ended September 30, 2020 and 2019, respectively, and $74 million and $175 million during the nine months ended September 30, 2020 and 2019, respectively, to Atlantic Coast Pipeline. At September 30, 2020 and December 31, 2019, Dominion Energy had $15 million and $7 million, respectively, of contributions payable to Atlantic Coast Pipeline included within other current liabilities in its Consolidated Balance Sheets. Dominion Energy expects to incur additional losses from Atlantic Coast Pipeline as it completes wind-down activities. While Dominion Energy is unable to precisely estimate the amounts to be incurred by Atlantic Coast Pipeline, the portion of such amounts attributable to Dominion Energy is not expected to be material to Dominion Energy’s results of operations, financial position or statement of cash flows. DETI provided services to Atlantic Coast Pipeline which totaled $7 million and $24 million for the three months ended September 30, 2020 and 2019, respectively, and $44 million and $81 million for the nine months ended September 30, 2020 and 2019, respectively, included in discontinued operations in Dominion Energy’s Consolidated Statements of Income. Amounts receivable related to these services were less than $1 million and $7 million at September 30, 2020 and December 31, 2019, respectively, composed entirely of accrued unbilled revenue, included in current assets held for sale in Dominion Energy’s Consolidated Balance Sheets. Blue Racer In the first quarter of 2019, Dominion Energy received $151 million of additional consideration, including applicable interest, in connection with the sale of Dominion Energy’s 50% limited partnership interest in Blue Racer in December 2018, as discussed in Note 9 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2019. Fowler Ridge In September 2020, Dominion Energy sold its 50% noncontrolling partnership interest in Fowler Ridge to BP and terminated an affiliate’s long-term power, capacity and renewable energy credit contract with Fowler Ridge for a net payment by Dominion Energy of $150 million. Dominion Energy recognized a loss of $221 million ($165 million after-tax) on the contract termination, included in impairment of assets and other charges in its Consolidated Statements of Income for the three and nine months ended September 30, 2020. The $150 million payment was allocated between the contract termination and sale based on the relative fair value of each using an income approach. The fair value determinations for the payment allocations are considered Level 3 fair value measurements due to the use of significant judgmental and unobservable inputs, including the amount of future cash flows and discount rate reflecting risks inherent in the future cash flows and market prices.

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 + Details
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