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Asset Retirement Obligations | 12 Months Ended
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Dec. 31, 2020
Asset Retirement Obligation Disclosure [Abstract] |
Asset Retirement Obligations | NOTE 14. ASSET RETIREMENT OBLIGATIONS AROs represent obligations that result from laws, statutes, contracts and regulations related to the eventual retirement of certain of the Companies’ long-lived assets. The Companies AROs are primarily associated with the decommissioning of their nuclear generation facilities and ash pond and landfill closures. The Companies have also identified, but not recognized, AROs related to the retirement of Dominion Energy’s storage wells in its underground natural gas storage network, certain Virginia Power electric transmission and distribution assets located on property with easements, rights of way, franchises and lease agreements, Virginia Power’s hydroelectric generation facilities and the abatement of certain asbestos not expected to be disturbed in the Companies’ generation facilities. The Companies currently do not have sufficient information to estimate a reasonable range of expected retirement dates for any of these assets since the economic lives of these assets can be extended indefinitely through regular repair and maintenance and they currently have no plans to retire or dispose of any of these assets. As a result, a settlement date is not determinable for these assets and AROs for these assets will not be reflected in the Consolidated Financial Statements until sufficient information becomes available to determine a reasonable estimate of the fair value of the activities to be performed. The Companies continue to monitor operational and strategic developments to identify if sufficient information exists to reasonably estimate a retirement date for these assets. The changes to AROs during 2019 and 2020 were as follows:
| Amount |
(millions) |  |  |
Dominion Energy |  |  |
AROs at December 31, 2018 | $ | 2,444 |
Obligations incurred during the period(1) |  | 2,413 |
AROs acquired in the SCANA Combination |  | 577 |
Obligations settled during the period |  | (134 | )
Revisions in estimated cash flows(2) |  | (324 | )
Accretion |  | 208 |
AROs at December 31, 2019(3) | $ | 5,184 |
Obligations incurred during the period |  | 67 |
Obligations settled during the period |  | (114 | )
Revisions in estimated cash flows(4) |  | 228 |
Accretion |  | 218 |
AROs at December 31, 2020(3) | $ | 5,583 |
Virginia Power |  |  |
AROs at December 31, 2018 | $ | 1,445 |
Obligations incurred during the period(1) |  | 2,408 |
Obligations settled during the period |  | (81 | )
Revisions in estimated cash flows(2) |  | (323 | )
Accretion |  | 132 |
AROs at December 31, 2019 | $ | 3,581 |
Obligations incurred during the period |  | 48 |
Obligations settled during the period |  | (85 | )
Revisions in estimated cash flows(5) |  | 139 |
Accretion |  | 137 |
AROs at December 31, 2020 | $ | 3,820 |
(1) | Reflects future ash pond and landfill closure costs at certain utility generation facilities. See discussion below.
(2) | Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities as well as revisions for 20-year license extensions for regulated nuclear power stations in Virginia.
(3) | Includes $394 million and $179 million reported in other current liabilities at December 31, 2019 and 2020, respectively.
(4) | Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities, asbestos abatement costs associated with certain utility facilities and from the completion of a nuclear decommissioning cost study related to Summer.
(5) | Reflects revisions to future ash pond and landfill closure costs at certain utility generation facilities and asbestos abatement costs associated with certain utility facilities.
Dominion Energy’s AROs at December 31, 2020 and 2019, include $1.9 billion and $1.7 billion, respectively, with $0.9 billion and $0.8 billion recorded by Virginia Power, related to the future decommissioning of their nuclear facilities. The Companies have established trusts dedicated to funding the future decommissioning activities. At December 31, 2020 and 2019, the aggregate fair value of Dominion Energy’s trusts, consisting primarily of equity and debt securities, totaled $6.9 billion and $6.2 billion, respectively. At December 31, 2020 and 2019, the aggregate fair value of Virginia Power’s trusts, consisting primarily of debt and equity securities, totaled $3.2 billion and $2.9 billion, respectively. In addition, AROs at December 31, 2020 and 2019 include $2.8 billion and $2.6 billion, respectively, related to Virginia Power’s future ash pond and landfill closure costs. Regulatory mechanisms, primarily associated with legislation described below, provide for recovery of costs to be incurred. In April 2018, the Governor of Virginia signed legislation into law extending an existing permit moratorium on the VDEQ issuing solid waste permits for the closure of ash ponds at Virginia Power’s Bremo, Chesapeake, Chesterfield and Possum Point power stations until July 2019. The legislation also required Virginia Power to solicit and compile by November 2018, information from third parties on the suitability, cost and market demand for beneficiation or recycling of coal ash from these units. In connection with this legislation, Virginia Power recorded an $81 million ($60 million after-tax) charge recorded in other operations and maintenance expense in its Consolidated Statements of Income. In March 2019, the Governor of Virginia signed into law legislation which requires any CCR unit located at Virginia Power’s Bremo, Chesapeake, Chesterfield or Possum Point power stations that stopped accepting CCR prior to July 2019 be closed by removing the CCR to an approved landfill or through recycling for beneficial reuse. Costs associated with the closure of these CCR units, including costs allocated to customers outside of Virginia, are recoverable through a rider approved by the Virginia Commission. In connection with this legislation, Virginia Power recorded a $2.4 billion ARO related to the cost of landfills and beneficial reuse, with an offsetting increase to property, plant and equipment of $1.3 billion for the Chesterfield power station and an increase primarily to regulatory assets for the remaining portion related to the Bremo, Chesapeake and Possum Point power stations in 2019. In connection with the March 2020 commitment for the planned early retirement of the Chesterfield power station, these costs were reclassified from property, plant and equipment primarily to regulatory assets for amounts recoverable through riders and the remaining $185 million associated with nonjurisdictional customers was reclassified to other deferred charges and other assets. In 2020, Virginia Power recorded a $140 million increase to the landfill and beneficial use AROs from revisions to post closure monitoring costs, the execution of a coal beneficiation contract and a landfill at the Chesterfield power station. See Note 12 for additional information. In addition, Virginia Power revised its estimated cash flows for the existing ARO related to future ash pond and landfill closure costs, which resulted in a decrease of $202 million and a corresponding $113 million ($84 million after-tax) benefit in other operations and maintenance expense in the Consolidated Statements of Income in 2019.

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- Definition The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 410 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2175671 + Details
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