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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income tax expense for continuing operations including noncontrolling interests | Details of income tax expense for continuing operations including noncontrolling interests were as follows:
|  | Dominion Energy |  |  | Virginia Power |
Year Ended December 31, |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2022 |  |  | 2021 |  |  | 2020 |
(millions) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (76 | ) |  | $ | (301 | ) |  | $ | (388 | ) |  | $ | 17 |  |  | $ | 67 |  |  | $ | 364 |
State |  |  | 27 |  |  |  | 13 |  |  |  | (91 | ) |  |  | (17 | ) |  |  | (13 | ) |  |  | 71 |
Total current expense (benefit) |  |  | (49 | ) |  |  | (288 | ) |  |  | (479 | ) |  |  | — |  |  |  | 54 |  |  |  | 435 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Taxes before operating loss carryforwards and investment tax credits |  |  | (63 | ) |  |  | 144 |  |  |  | (16 | ) |  |  | 212 |  |  |  | 145 |  |  |  | (226 | )
Tax utilization expense of operating loss carryforwards |  |  | 35 |  |  |  | 42 |  |  |  | 42 |  |  |  | — |  |  |  | — |  |  |  | — |
Investment tax credits |  |  | (129 | ) |  |  | 250 |  |  |  | 311 |  |  |  | (148 | ) |  |  | (39 | ) |  |  | (27 | )
State |  |  | 44 |  |  |  | (26 | ) |  |  | 44 |  |  |  | 112 |  |  |  | 118 |  |  |  | 7 |
Total deferred expense (benefit) |  |  | (113 | ) |  |  | 410 |  |  |  | 381 |  |  |  | 176 |  |  |  | 224 |  |  |  | (246 | )
Investment tax credit-gross deferral |  |  | 18 |  |  |  | 121 |  |  |  | 42 |  |  |  | 18 |  |  |  | 121 |  |  |  | 42 |
Investment tax credit-amortization |  |  | (4 | ) |  |  | (4 | ) |  |  | (3 | ) |  |  | (3 | ) |  |  | (2 | ) |  |  | (2 | )
Total income tax expense (benefit) |  | $ | (148 | ) |  | $ | 239 |  |  | $ | (59 | ) |  | $ | 191 |  |  | $ | 397 |  |  | $ | 229 |
In 2022, Dominion Energy’s current income taxes reflect a benefit from continuing operations as the income tax expense associated with the East Ohio, PSNC and Questar Gas Transactions and Cove Point operations is reflected in discontinued operations.
Effective Income Tax | 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
Year Ended December 31, |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |
U.S. statutory rate |  |  | 21.0 |  | % |  | 21.0 |  | % |  | 21.0 |  | % |  | 21.0 |  | % |  | 21.0 |  | % |  | 21.0 |  | %
Increases (reductions) resulting from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Recognition of taxes - sale of subsidiary stock |  |  | (74.7 | ) |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |  |  |
Recognition of taxes - privatization intercompany gain |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2.4 |  |  |  | — |  |  |  | — |  |
State taxes, net of federal benefit |  |  | (28.3 | ) |  |  | 1.8 |  |  |  | (0.4 | ) |  |  | 4.6 |  |  |  | 4.6 |  |  |  | 4.8 |  |
Investment tax credits |  |  | 108.9 |  |  |  | (4.5 | ) |  |  | (18.6 | ) |  |  | (9.1 | ) |  |  | (3.0 | ) |  |  | (4.5 | ) |
Production tax credits |  |  | 12.0 |  |  |  | (0.6 | ) |  |  | (1.3 | ) |  |  | (1.0 | ) |  |  | (0.6 | ) |  |  | (0.7 | ) |
Valuation allowances |  |  | — |  |  |  | 0.2 |  |  |  | 1.7 |  |  |  | — |  |  |  | — |  |  |  | — |  |
Reversal of excess deferred income taxes |  |  | 67.3 |  |  |  | (2.8 | ) |  |  | (5.9 | ) |  |  | (3.8 | ) |  |  | (2.1 | ) |  |  | (2.2 | ) |
State legislative change |  |  | 0.3 |  |  |  | (1.0 | ) |  |  | — |  |  |  | — |  |  |  | (0.7 | ) |  |  | — |  |
Change in tax status |  |  | — |  |  |  | — |  |  |  | (3.3 | ) |  |  | — |  |  |  | — |  |  |  | — |  |
AFUDC—equity |  |  | 5.0 |  |  |  | (0.5 | ) |  |  | (0.1 | ) |  |  | (0.4 | ) |  |  | (0.5 | ) |  |  | — |  |
Changes in state deferred taxes associated with assets held for sale |  |  | (4.1 | ) |  |  | — |  |  |  | (6.3 | ) |  |  |  |  |  |  |  |  |  |
Absence of tax on noncontrolling interest |  |  | — |  |  |  | (0.2 | ) |  |  | 7.4 |  |  |  |  |  |  |  |  |  |  |
Settlements of uncertain tax positions |  |  | — |  |  |  | (1.7 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |
Employee stock ownership plan deduction |  |  | 6.8 |  |  |  | (0.4 | ) |  |  | (1.7 | ) |  |  |  |  |  |  |  |  |  |
Other, net |  |  | 5.7 |  |  |  | (0.4 | ) |  |  | (0.7 | ) |  |  | (0.1 | ) |  |  | 0.1 |  |  |  | (0.1 | ) |
Effective tax rate |  |  | 119.9 |  | % |  | 10.9 |  | % |  | (8.2 | ) | % |  | 13.6 |  | % |  | 18.8 |  | % |  | 18.3 |  | %
Deferred income taxes components | The Companies’ deferred income taxes consist of the following:
|  | Dominion Energy |  |  | Virginia Power |
At December 31, |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
(millions) |  |  |  |  |  |  |  |  |  |  |  |
Deferred income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Total deferred income tax assets |  | $ | 2,633 |  |  | $ | 2,782 |  |  | $ | 1,535 |  |  | $ | 1,373 |
Total deferred income tax liabilities |  |  | 7,730 |  |  |  | 7,961 |  |  |  | 4,701 |  |  |  | 4,286 |
Total net deferred income tax liabilities |  | $ | 5,097 |  |  | $ | 5,179 |  |  | $ | 3,166 |  |  | $ | 2,913 |
Total deferred income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Plant and equipment, primarily depreciation method and basis differences |  | $ | 4,257 |  |  | $ | 4,773 |  |  | $ | 3,355 |  |  | $ | 3,327 |
Excess deferred income taxes |  |  | (847 | ) |  |  | (884 | ) |  |  | (616 | ) |  |  | (629 | )
Unrecovered NND Project costs |  |  | 479 |  |  |  | 508 |  |  |  |  |  |  |
DESC rate refund |  |  | (89 | ) |  |  | (113 | ) |  |  |  |  |  |
Toshiba Settlement |  |  | (162 | ) |  |  | (189 | ) |  |  |  |  |  |
Nuclear decommissioning |  |  | 1,001 |  |  |  | 1,114 |  |  |  | 311 |  |  |  | 324 |
Deferred state income taxes |  |  | 803 |  |  |  | 777 |  |  |  | 566 |  |  |  | 420 |
Federal benefit of deferred state income taxes |  |  | (164 | ) |  |  | (163 | ) |  |  | (119 | ) |  |  | (88 | )
Deferred fuel, purchased energy and gas costs |  |  | 509 |  |  |  | 154 |  |  |  | 403 |  |  |  | 126 |
Pension benefits |  |  | 330 |  |  |  | 282 |  |  |  | (105 | ) |  |  | (119 | )
Other postretirement benefits |  |  | 58 |  |  |  | 68 |  |  |  | 111 |  |  |  | 93 |
Loss and credit carryforwards |  |  | (1,782 | ) |  |  | (1,566 | ) |  |  | (751 | ) |  |  | (537 | )
Valuation allowances |  |  | 137 |  |  |  | 138 |  |  |  | 7 |  |  |  | 6 |
Partnership basis differences |  |  | 466 |  |  |  | 390 |  |  |  |  |  |  |
Other |  |  | 101 |  |  |  | (109 | ) |  |  | 4 |  |  |  | (10 | )
Total net deferred income tax liabilities |  | $ | 5,097 |  |  | $ | 5,180 |  |  | $ | 3,166 |  |  | $ | 2,913 |
Deferred Investment Tax Credits – Regulated Operations |  |  | 300 |  |  |  | 286 |  |  |  | 286 |  |  |  | 270 |
Total Deferred Taxes and Deferred Investment Tax Credits |  | $ | 5,397 |  |  | $ | 5,466 |  |  | $ | 3,452 |  |  | $ | 3,183 |
Summary of deductible loss and credit carryforwards | At December 31, 2022, Dominion Energy had the following deductible loss and credit carryforwards:
|  | Deductible |  |  | Deferred |  |  | Valuation |  |  | Expiration
|  | Amount |  |  | Tax Asset |  |  | Allowance |  |  | Period
(millions) |  |  |  |  |  |  |  |  |  |  |
Federal losses |  | $ | 778 |  |  | $ | 163 |  |  | $ | — |  |  | 2037
Federal investment credits |  | — |  |  |  | 874 |  |  | — |  |  | 2036-2042
Federal production and other credits |  | — |  |  |  | 82 |  |  | — |  |  | 2036-2042
State losses |  |  | 5,665 |  |  |  | 305 |  |  |  | (51 | ) |  | 2023-2042
State minimum tax credits |  | — |  |  |  | 271 |  |  | — |  |  | No expiration
State investment and other credits |  | — |  |  |  | 127 |  |  |  | (86 | ) |  | 2023-2032
Total |  | $ | 6,443 |  |  | $ | 1,822 |  |  | $ | (137 | ) |  |
At December 31, 2022, Virginia Power had the following deductible loss and credit carryforwards:
|  | Deductible |  |  | Deferred |  |  | Valuation |  |  | Expiration
|  | Amount |  |  | Tax Asset |  |  | Allowance |  |  | Period
(millions) |  |  |  |  |  |  |  |  |  |  |
Federal losses |  | $ | — |  |  | $ | — |  |  | $ | — |  |  |
Federal investment credits |  | — |  |  |  | 631 |  |  | — |  |  | 2036-2042
Federal production and other credits |  | — |  |  |  | 80 |  |  | — |  |  | 2036-2042
State losses |  |  | 513 |  |  |  | 31 |  |  | — |  |  | 2042
State investment and other credits |  | — |  |  |  | 9 |  |  |  | (7 | ) |  | 2024
Total |  | $ | 513 |  |  | $ | 751 |  |  | $ | (7 | ) |  |
Reconciliation of changes in unrecognized tax benefits | A reconciliation of changes in Dominion Energy’s unrecognized tax benefits follows. Virginia Power does no t have any unrecognized tax benefits in the periods presented:
|  | Dominion Energy |  |
|  | 2022 |  |  | 2021 |  |  | 2020 |  |
(millions) |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 128 |  |  | $ | 167 |  |  | $ | 175 |  |
Increases-prior period positions |  |  | 8 |  |  |  | 48 |  |  |  | 18 |  |
Decreases-prior period positions |  |  | (8 | ) |  |  | (59 | ) |  |  | (19 | ) |
Increases-current period positions |  |  | 2 |  |  |  | 2 |  |  |  | 1 |  |
Settlements with tax authorities |  |  | (3 | ) |  |  | (26 | ) |  |  | — |  |
Expiration of statutes of limitations |  |  | (10 | ) |  |  | (4 | ) |  |  | (8 | ) |
Ending balance |  | $ | 117 |  |  | $ | 128 |  |  | $ | 167 |  |
Earliest tax year remaining | For each of the major states in which Dominion Energy operates or previously operated, the earliest tax year remaining open for examination is as follows:
State |  | Earliest Open Tax Year
Pennsylvania(1) |  | 2012
Connecticut |  | 2019
Virginia(2) |  | 2019
Utah(1) |  | 2019
South Carolina |  | 2019
(1) Considered a major state for entities presented in discontinued operations. (2) Considered a major state for Virginia Power’s operations.

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