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Acquisitions and Dispositions | 9 Months Ended
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Sep. 30, 2022
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Acquisitions and Dispositions | Note 3. Acquisitions and Dispositions Disposition of Gas Transmission & Storage Operations In December 2021, Dominion Energy completed the sale of the Q-Pipe Group to Southwest Gas, as discussed in Note 3 to the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. In the first quarter of 2022, Dominion Energy recognized a gain of $27 million ($20 million after-tax) in discontinued operations in its Consolidated Statements of Income associated with finalization of working capital adjustments. In connection with the closing of the sale of the Q-Pipe Group, Dominion Energy and Southwest Gas entered into a transition services agreement under which Dominion Energy will continue to provide specified administrative services to support the operations of the disposed businesses for up to 12 months after closing, subject to extension. Dominion Energy recorded $2 million and $5 million associated with the transition services agreement in operating revenue in the Consolidated Statements of Income for the three and nine months ended September 30, 2022, respectively. The following table represents selected information regarding the results of operations, which were reported within discontinued operations in Dominion Energy’s Consolidated Statements of Income:
|  | Three Months Ended September 30, 2021 |  |  | Nine Months Ended September 30, 2021 |
|  | Q-Pipe Group |  |  | Q-Pipe Group |
(millions) |  |  |  |  |  |  |  |
Operating revenue |  | $ | 62 |  |  | $ | 188 |
Operating expense |  |  | 24 |  |  |  | 52 |
Other income(1) |  |  | 26 |  |  |  | 27 |
Interest and related charges |  |  | 7 |  |  |  | 17 |
Income before income taxes(2) |  |  | 57 |  |  |  | 146 |
Income tax expense |  |  | 12 |  |  |  | 29 |
Net income attributable to Dominion Energy |  | $ | 45 |  |  | $ | 117 |
(1) | Includes a $25 million benefit associated with the termination of the Q-Pipe Transaction in the third quarter of 2021.
(2) | Excludes $18 million income tax benefit recorded in the third quarter of 2021 associated with the GT&S Transaction.
Capital expenditures and significant noncash items relating to the Q-Pipe Group included the following:
|  | Nine Months Ended September 30, 2021 |
(millions) |  |  |  |
Capital expenditures |  | $ | 26 |
Significant noncash items: |  |  |  |
Accrued capital expenditures |  |  | 2 |
Sale of Hope In February 2022, Dominion Energy entered into an agreement to sell 100% of the equity interests in Hope to Ullico for $690 million of cash consideration, subject to customary closing adjustments, which closed in August 2022 after all customary closing and regulatory conditions were satisfied, including clearance under the Hart-Scott-Rodino Act and approval from the West Virginia Commission. The sale is treated as a stock sale for tax purposes. Upon closing, Dominion Energy recognized a pre-tax gain of $8 million, subject to customary closing adjustments, (net of $110 million write-off of goodwill which was not deductible for tax purposes) in losses (gains) on sales of assets in its Consolidated Statements of Income. The transaction resulted in an after-tax loss of $89 million. Upon meeting the classification as held for sale in the first quarter of 2022 and through the second quarter of 2022, Dominion Energy had recorded charges of $90 million in deferred income tax expense in its Consolidated Statements of Income to reflect the recognition of deferred taxes on the outside basis of Hope’s stock. This deferred income tax expense reversed upon closing of the sale and became a component of current income tax expense on the sale disclosed above. See Note 5 for additional information. In addition, a curtailment was recorded related to other postretirement benefit plans as discussed in Note 20. All activity related to Hope prior, or not related, to closing, is included in Gas Distribution. Sale of Kewaunee In May 2021, Dominion Energy entered into an agreement to sell 100% of the equity interests in Dominion Energy Kewaunee, Inc. to EnergySolutions, including the transfer of all decommissioning obligations associated with Kewaunee, which ceased operations in 2013. The sale closed in June 2022 following approval from the Wisconsin Commission in May 2022 and NRC approval of a requested license transfer in March 2022. The sale is treated as an asset sale for tax purposes and Dominion Energy retained the assets and obligations of the pension and other postretirement employee benefit plans. EnergySolutions is subject to the Wisconsin regulatory conditions agreed to by Dominion Energy upon its acquisition of Kewaunee, including the return of any excess decommissioning funds to WPSC and WP&L customers following completion of all decommissioning activities. In the second quarter of 2022, Dominion Energy recorded a loss of $649 million ($513 million after-tax), recorded in losses (gains) on sales of assets in its Consolidated Statements of Income, primarily related to the difference between the nuclear decommissioning trust and AROs. Prior to its receipt, there had been uncertainty as to the timing of or ability to obtain approval from the Wisconsin Commission. Prior to closing, Dominion Energy withdrew $80 million from the nuclear decommissioning trust to recover certain spent nuclear fuel and other permitted costs. All activity related to Kewaunee prior to closing is included in Contracted Assets.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI https://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 + Details
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