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Regulatory Matters | 3 Months Ended
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Mar. 31, 2022
Regulated Operations [Abstract] |
Regulatory Matters | Note 13. Regulatory Matters Regulatory Matters Involving Potential Loss Contingencies As a result of issues generated in the ordinary course of business, the Companies are involved in various regulatory matters. Certain regulatory matters may ultimately result in a loss; however, as such matters are in an initial procedural phase, involve uncertainty as to the outcome of pending reviews or orders, and/or involve significant factual issues that need to be resolved, it is not possible for the Companies to estimate a range of possible loss. For regulatory matters that the Companies cannot estimate, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the regulatory process such that the Companies are able to estimate a range of possible loss. For regulatory matters that the Companies are able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any estimated range is based on currently available information, involves elements of judgment and significant uncertainties and may not represent the Companies’ maximum possible loss exposure. The circumstances of such regulatory matters will change from time to time and actual results may vary significantly from the current estimate. For current matters not specifically reported below, management does not anticipate that the outcome from such matters would have a material effect on the Companies’ financial position, liquidity or results of operations. Other Regulatory Matters Other than the following matters, there have been no significant developments regarding the pending regulatory matters disclosed in Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2021. Virginia Regulation Virginia Fuel Expenses In May 2022, Virginia Power filed its annual fuel factor filing with the Virginia Commission to recover an estimated $2.3 billion in Virginia jurisdictional projected fuel expense for the rate year beginning July 1, 2022 and a projected $1.0 billion under-recovered balance as of June 30, 2022. Virginia Power’s proposed fuel rate represents a fuel revenue increase of $1.8 billion when applied to projected kilowatt-hour sales for that period. Virginia Power also proposed alternatives to recover this under-collected balance over a two- or three-year period. Under these alternatives, Virginia Power’s fuel revenues for the rate year would increase by $1.3 billion or $1.2 billion, respectively. In addition, Virginia Power proposed a change in the timing of fuel cost recovery for certain customers that would consider those customers’ portion of the projected under-recovered balance to have been recovered as of June 30, 2022. If approved, Virginia Power expects to recognize a charge of approximately $155 million to its Consolidated Statement of Income associated with these certain customers. This matter is pending. Renewable Generation Projects In September 2021, Virginia Power filed a petition with the Virginia Commission for CPCNs to construct and operate 13 utility-scale projects totaling approximately 661 MW of solar generation and 70 MW of energy storage as part of its efforts to meet the renewable generation development requirements under the VCEA. The projects are expected to cost approximately $1.4 billion in the aggregate, excluding financing costs, and be placed into service between 2022 and 2023. In March 2022, the Virginia Commission approved the petition. Riders Developments for significant riders associated with various Virginia Power projects are as follows:
Rider Name |  | Application Date |  | Approval Date |  | Rate Year Beginning |  | Total Revenue Requirement (millions) |  |  | Increase (Decrease) Over Previous Year (millions) |
Rider CCR |  | February 2022 |  | Pending |  | December 2022 |  | $ | 231 |  |  | $ | 15 |
Rider CE(1) |  | September 2021 |  | March 2022 |  | May 2022 |  |  | 71 |  |  |  | 61 |
Rider R |  | June 2021 |  | March 2022 |  | April 2022 |  |  | 59 |  |  |  | 1 |
Rider R |  | June 2021 |  | March 2022 |  | April 2023 |  |  | 55 |  |  |  | (4 | )
Rider RGGI(2) |  | December 2021 |  | Withdrawn |  |  |  |  |  |  |  |  |  |
Rider SNA(3) |  | October 2021 |  | Pending |  | September 2022 |  |  | 107 |  |  | N/A |
Rider T1(4) |  | May 2022 |  | Pending |  | September 2022 |  |  | 706 |  |  |  | (161 | )
Rider U(5) |  | June 2021 |  | March 2022 |  | April 2022 |  |  | 95 |  |  |  | 15 |
Rider US-3 |  | August 2021 |  | March 2022 |  | June 2022 |  |  | 50 |  |  |  | 12 |
Rider US-4 |  | August 2021 |  | March 2022 |  | June 2022 |  |  | 15 |  |  |  | 5 |
(1) | Associated with solar generation and energy storage projects requested for approval in September 2021, solar generation projects approved in April 2021 and certain small-scale solar projects.
(2) | In January 2022, Virginia Power filed a motion to withdraw its application as a result of the announcement by the Governor of Virginia that he intends to withdraw Virginia from RGGI. The Virginia Commission granted Virginia Power’s motion in April 2022. See additional discussion below.
(3) | Virginia Power also requested approval of cost recovery of approximately $1.2 billion through Rider SNA for the first phase of nuclear life extension program which includes investments through 2024. In April 2022, Virginia Power, the Virginia Commission staff and certain interested parties filed a proposed stipulation recommending that costs incurred after February 2022 associated with the first phase of the nuclear life extension program for North Anna be deferred and requested for recovery in a subsequent Rider SNA filing.
(4) | Consists of $482 million for the transmission component of Virginia Power’s base rates and $224 million for Rider T1.
(5) | Consists of $60 million for previously approved phases and $35 million for phase six costs for Rider U.
In May 2022, Virginia Power filed a petition with the Virginia Commission requesting a suspension of Rider RGGI approved in August 2021. Virginia Power also requested that RGGI compliance costs incurred and unrecovered through July 2022 be recovered through existing base rates in effect during the period incurred. If approved by the Virginia Commission, Virginia Power expects to record charges to its Consolidated Statement of Income for the amount of any unrecovered costs, which are estimated to be approximately $215 million, including the impact of certain non-jurisdictional customers which follow Virginia Power’s jurisdictional customer rate methodology. This matter is pending. Electric Transmission Project
Description and Location of Project |  | Application Date |  | Approval Date |  | Type of Line |  | Miles of Lines |  | Cost Estimate (millions) |
Elmont-Ladysmith rebuild and related projects in the Counties of Hanover and Caroline, Virginia |  | April 2021 |  | April 2022 |  | 500 kV |  | 26 |  | $ | 95 |
Nimbus line loop and substation and new 230 kV line in the County of Loudon, Virginia |  | February 2022 |  | Pending |  | 230 kV |  | 1 |  |  | 40 |
South Carolina Regulation DSM Programs DESC has approval for a DSM rider through which it recovers expenditures related to its DSM programs. In January 2022, DESC filed an application with the South Carolina Commission seeking approval to recover $60 million of costs and net lost revenues associated with these programs, along with an incentive to invest in such programs. In April 2022, the South Carolina Commission approved the request, effective with the first billing cycle of May 2022. Cost of Fuel DESC’s retail electric rates include a cost of fuel component approved by the South Carolina Commission which may be adjusted periodically to reflect changes in the price of fuel purchased by DESC. In April 2022, the South Carolina Commission approved DESC’s request to increase the total fuel cost component of retail electric rates, effective with the first billing cycle of May 2022. The South Carolina Commission also approved DESC’s request to apply approximately $66 million representing the net balance of funds associated with the monetization of the bankruptcy settlement with Toshiba Corporation following the satisfaction of liens against NND Project property previously recorded in regulatory liabilities, as a reduction to its under-collected base fuel cost balance, along with a requested increase to DESC’s variable environmental and avoided capacity cost component. The net effect is an annual increase of $143 million. Ohio Regulation PIR Program In 2008, East Ohio began PIR, aimed at replacing approximately 25% of its pipeline system. In April 2022, the Ohio Commission approved an extension of East Ohio’s PIR program for capital investments through 2026 with continuation of 3% increases of annual capital expenditures per year. In February 2022, East Ohio filed an application with the Ohio Commission requesting approval to adjust the PIR cost recovery rates for 2021 costs. The filing reflects gross plant investment for 2021 of $225 million, cumulative gross plant investment of $2.2 billion and a revenue requirement of $273 million. This matter is pending. CEP Program In 2011, East Ohio began CEP which enables East Ohio to defer depreciation expense, property tax expense and carrying costs associated with CEP investments. In April 2022, certain parties filed an appeal with the Supreme Court of Ohio appealing the Ohio Commission’s December 2020 order establishing the CEP rider, including the rate of return utilized in determining the revenue requirement. This matter is pending. In February 2022, the Ohio Commission approved adjustments to CEP cost recovery rates for 2019 and 2020 costs. The approved rates reflect gross plant investment for 2019 and 2020 of $231 million, cumulative gross plant investment of $952 million and a revenue requirement of $118 million. The Ohio Commission also ordered that East Ohio should file its next base rate case by October 2023. In April 2022, East Ohio filed an application with the Ohio Commission requesting approval to adjust CEP cost recovery rates for 2021 costs. The filing reflects gross plant investment for 2021 of $140 million, cumulative gross plant investment of $1.1 billion and a revenue requirement of $137 million. This matter is pending.

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