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Significant Financing Transactions | 9 Months Ended
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Sep. 30, 2024
Debt Disclosure [Abstract] |
Significant Financing Transactions | Note 16. Significant Financing Transactions Credit Facilities and Short-term Debt The Companies use short-term debt to fund working capital requirements and as a bridge to long-term debt financings. The levels of borrowing may vary significantly during the course of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations. In addition, Dominion Energy utilizes cash and letters of credit to fund collateral requirements. Collateral requirements are impacted by commodity prices, hedging levels, Dominion Energy’s credit ratings and the credit quality of its counterparties. Other than the items discussed below, there have been no significant changes regarding the Companies’ credit facilities and short-term debt as described in Note 17 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2023. Dominion Energy Dominion Energy’s short-term financing is supported by its $6.0 billion joint revolving credit facility that provides for a discount in the pricing of certain annual fees and amounts borrowed by Dominion Energy under the facility if Dominion Energy achieves certain annual renewable electric generation and diversity and inclusion objectives. At September 30, 2024, Dominion Energy’s commercial paper and letters of credit outstanding, as well as its capacity available under the credit facility, were as follows:
|  | Facility Limit |  |  | Outstanding Commercial Paper |  |  | Outstanding Letters of Credit |  |  | Facility Capacity Available |
(millions) |  |  |  |  |  |  |  |  |  |  |  |
Joint revolving credit facility(1)(2) |  | $ | 6,000 |  |  | $ | 3,622 |  |  | $ | 21 |  |  | $ | 2,357 |
(1) This credit facility matures in June 2026, with the potential to be extended by the borrowers to June 2028, and can be used by the borrowers under the credit facility to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit. (2) In May 2024, the joint revolving credit facility was amended to remove Questar Gas as a co-borrower. DESC’s short-term financing is supported through its access as co-borrower to the joint revolving credit facility discussed above with the Companies. At September 30, 2024, the sub-limit for DESC was $500 million. In addition to the credit facility mentioned above and Virginia Power’s letter of credit facilities mentioned below, Dominion Energy also had a credit facility which allowed Dominion Energy to issue up to approximately $30 million in letters of credit, which matured in June 2024. At December 31, 2023, Dominion Energy had $25 million in letters of credit outstanding under this facility. In March 2023, Dominion Energy entered into an agreement with a financial institution which it expects to allow it to issue up to $100 million in letters of credit. At September 30, 2024 and December 31, 2023, $48 million and $54 million, respectively, in letters of credit were issued and outstanding under this agreement. In June 2024, the Companies entered into an agreement with a financial institution which the Companies expect to allow the Companies to issue up to a combined $125 million in letters of credit. At September 30, 2024, Dominion Energy had no letters of credit issued and outstanding under this agreement. Dominion Energy has an effective shelf registration statement with the SEC for the sale of up to $3.0 billion of variable denomination floating rate demand notes, called Dominion Energy Reliability InvestmentSM as disclosed in Note 17 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2023. At September 30, 2024 and December 31, 2023, Dominion Energy’s Consolidated Balance Sheets include $482 million and $409 million, respectively, with respect to such notes presented within short-term debt. The proceeds are used for general corporate purposes and to repay debt. In March 2024, Dominion Energy repaid the full $2.5 billion outstanding under its $2.5 billion 364-day term loan facility entered into in January 2023 as amended in January 2024, using after-tax proceeds received in connection with the East Ohio Transaction. The debt was scheduled to mature in July 2024. At December 31, 2023, Dominion Energy’s Consolidated Balance Sheet included $2.5 billion with respect to such facility presented within securities due within one year. In March 2024, Dominion Energy repaid $1.8 billion of its $2.25 billion 364-day term loan facility entered into in October 2023, using after-tax proceeds received in connection with the East Ohio Transaction. Subsequently in March 2024, Dominion Energy requested and received a $500 million increase to the amount of the facility and concurrently borrowed $500 million with the proceeds used for general corporate purposes. In May 2024, Dominion Energy repaid the full $976 million outstanding under the facility, using after-tax proceeds received in connection with the Questar Gas Transaction. The debt was scheduled to mature in October 2024. At December 31, 2023, Dominion Energy’s Consolidated Balance Sheet included $2.25 billion with respect to such facility presented within securities due within one year. Virginia Power Virginia Power’s short-term financing is supported through its access as co-borrower to Dominion Energy’s $6.0 billion joint revolving credit facility. The credit facility can be used for working capital, as support for the combined commercial paper programs of the borrowers under the credit facility and for other general corporate purposes. At September 30, 2024, Virginia Power’s share of commercial paper and letters of credit outstanding under the joint revolving credit facility with Dominion Energy and DESC was as follows:
|  | Facility Limit(1) |  |  | Outstanding Commercial Paper |  |  | Outstanding Letters of Credit |
(millions) |  |  |  |  |  |  |  |  |
Joint revolving credit facility(1)(2) |  | $ | 6,000 |  |  | $ | 740 |  |  | $ | 10 |
(1) The full amount of the facility is available to Virginia Power, less any amounts outstanding to co-borrowers Dominion Energy and DESC. The sub-limit for Virginia Power is set pursuant to the terms of the facility but can be changed at the option of the borrowers multiple times per year. At September 30, 2024, the sub-limit for Virginia Power was $1.75 billion. If Virginia Power has liquidity needs in excess of its sub-limit, the sub-limit may be changed or such needs may be satisfied through short-term intercompany borrowings from Dominion Energy. This credit facility matures in June 2026, with the potential to be extended by the borrowers to June 2028. The credit facility can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $2.0 billion (or the sub-limit, whichever is less) of letters of credit. (2) In May 2024, the joint revolving credit facility was amended to remove Questar Gas as a co-borrower. In January 2023, Virginia Power entered into a letter of credit facility which allowed Virginia Power to issue up to $125 million in letters of credit and was scheduled to mature in January 2026. At December 31, 2023, less than $1 million in letters of credit were issued and outstanding under this facility with no amounts drawn under the letters of credit. As of March 31, 2024, the credit facility had been terminated. In March 2023, Virginia Power entered into an agreement with a financial institution, which it expects to allow it to issue up to $300 million in letters of credit. At September 30, 2024 and December 31, 2023, $123 million and $124 million, respectively, in letters of credit were issued and outstanding under this agreement. As noted above, in June 2024, the Companies entered into an agreement with a financial institution which the Companies expect to allow the Companies to issue up to a combined $125 million in letters of credit. At September 30, 2024, Virginia Power had $21 million in letters of credit issued and outstanding under this agreement. Long-term Debt Unless otherwise noted, the proceeds of long-term debt issuances were used for general corporate purposes and/or to repay short-term debt. In May 2024, Dominion Energy used a portion of the proceeds from the issuance of the 2024 EJSNs discussed below, to repay the outstanding balance of $450 million under the Sustainability Revolving Credit Facility, which is described in Note 18 to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2023. In June 2024, the facility was amended to extend the maturity date to June 2025. At December 31, 2023, Dominion Energy’s Consolidated Balance Sheet included $450 million with respect to this facility. In May 2024, Dominion Energy issued $2.0 billion of enhanced junior subordinated notes, consisting of $1.0 billion of 2024 Series A EJSNs and $1.0 billion of 2024 Series B EJSNs that mature in 2055 and 2054, respectively. The 2024 Series A EJSNs will bear interest at 6.875% until February 1, 2030. The interest rate will reset every five years beginning on February 1, 2030, to equal the then-current five-year U.S. Treasury rate plus a spread of 2.386%, provided that the interest rate will not reset below 6.875%. The 2024 Series B EJSNs will bear interest at 7.0% until June 1, 2034. The interest rate will reset every five years beginning on June 1, 2034, to equal the then-current five-year U.S. Treasury rate plus a spread of 2.511%, provided that the interest rate will not reset below 7.0%. Dominion Energy may defer interest payments on the 2024 EJSNs on one or more occasions for up to 10 consecutive years. If interest payments on the 2024 EJSNs are deferred, Dominion Energy may not, subject to certain limited exceptions, declare or pay any dividends or other distributions on, or redeem, repurchase or otherwise acquire any of its capital stock during the deferral period. Also, during the deferral period, Dominion Energy may not make any payments on or redeem or repurchase any debt securities or make any payments under any guarantee of debt that, in each case, is equal or junior in right of payment to the 2024 EJSNs. Dominion Energy used the proceeds from this issuance for general corporate purposes including the repayment of short-term debt, the repayment of amounts outstanding under the Sustainability Revolving Credit Facility as discussed above and the repurchase of Series B Preferred Stock as discussed below. In May 2024, Virginia Power remarketed three series of tax-exempt bonds, with an aggregate outstanding principal of $243 million to new investors. All three bonds will bear interest at a coupon of 3.80% until May 2027, after which they will bear interest at a market rate to be determined at that time. In August 2024, Virginia Power issued $600 million of 5.05% senior notes and $600 million of 5.55% senior notes that mature in 2034 and 2054, respectively. Proceeds were used for general corporate purposes and to repay amounts outstanding under the intercompany credit facility with Dominion Energy. In October 2024, Dominion Energy redeemed all $27 million in outstanding principal amount of its 3.80% Peninsula Ports Authority of Virginia Coal Terminal Revenue Refunding Bonds at par plus accrued interest. These bonds, which would have otherwise matured in 2033, are reflected in securities due within one year in Dominion Energy’s Consolidated Balance Sheet at September 30, 2024. Dominion Energy expects to record a charge of less than $1 million in the fourth quarter of 2024 in connection with this early redemption. In October 2024, Dominion Energy redeemed all $685 million in outstanding principal amount of its October 2014 hybrids at par plus accrued interest including interest accrued at a floating rate effective October 2024. The notes, which would have otherwise matured in 2054, are reflected in securities due within one year in Dominion Energy’s Consolidated Balance Sheet at September 30, 2024. Dominion Energy expects to record a charge of approximately $7 million in the fourth quarter of 2024 in connection with this early redemption. Dominion Energy recognized a charge of $10 million during the nine months ended September 30, 2024 within interest expense in its Consolidated Statements of Income in connection with the early redemption of Eagle Solar’s secured senior notes in February 2024. Preferred Stock Dominion Energy is authorized to issue up to 20 million shares of preferred stock, which may be designated into separate classes. At December 31, 2023, Dominion Energy had issued and outstanding 1.8 million shares of preferred stock, 0.8 million and 1.0 million of which were designated as the Series B Preferred Stock and the Series C Preferred Stock, respectively. In June 2024, Dominion Energy completed a tender offer repurchasing 0.4 million of the 0.8 million shares of Series B Preferred Stock issued and outstanding representing $440 million in aggregate liquidation preference. At September 30, 2024, Dominion Energy had issued and outstanding 1.4 million shares of preferred stock, 0.4 million and 1.0 million of which were designated as the Series B Preferred Stock and the Series C Preferred Stock, respectively. Dominion Energy recorded dividends on the Series B Preferred Stock of $4 million ($11.625 per share) and $21 million ($33.172 per share) for the three and nine months ended September 30, 2024, respectively. These amounts exclude a deemed dividend of $9 million representing deferred issuance costs, legal and bank fees and excise tax associated with the shares of Series B Preferred Stock repurchased in June 2024. Dominion Energy recorded dividends on the Series B Preferred Stock of $9 million ($11.625 per share) and $27 million ($34.875 per share) for the three and nine months ended September 30, 2023, respectively. Dominion Energy recorded dividends on the Series C Preferred Stock of $11 million ($10.875 per share) for both the three months ended September 30, 2024 and 2023 and $33 million ($32.625 per share) for both the nine months ended September 30, 2024 and 2023. There have been no significant changes to Dominion Energy’s Series C Preferred Stock as described in Note 19 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2023. Issuance of Common Stock Dominion Energy recorded, net of fees and commissions, $91 million from the issuance of 2 million shares of common stock for the nine months ended September 30, 2023 and $102 million from the issuance of 2 million shares of common stock for the nine months ended September 30, 2024, through various programs including Dominion Energy Direct® and employee savings plans as described in Note 20 to the Consolidated Financial Statements to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2023. In August 2023, Dominion Energy began purchasing its common stock on the open market for these direct stock purchase plans and, in March 2024, began issuing new shares of common stock. At-the-Market Program In May 2024, Dominion Energy entered into sales agency agreements to effect sales under a new at-the-market program. Under the sales agency agreements, Dominion Energy may, from time to time, offer and sell shares of its common stock through the sales agents or enter into one or more forward sale agreements with respect to shares of its common stock. Sales by Dominion Energy through the sales agents or by forward sellers pursuant to a forward sale agreement cannot exceed $1.8 billion in the aggregate. Through September 30, 2024, Dominion Energy entered forward sale agreements for approximately 11.4 million shares of its common stock expected to be settled in the fourth quarter of 2024 at a weighted average initial forward price of $53.23 per share. Except in certain circumstances, Dominion Energy can elect physical, cash or net settlement of the forward sale agreements. In September 2024, Dominion Energy entered forward sale agreements for approximately 3.8 million shares of its common stock expected to be settled in the fourth quarter of 2025 at a weighted average initial forward price of $57.62 per share. Except in certain circumstances, Dominion Energy can elect physical, cash or net settlement of the forward sale agreements. Repurchase of Common Stock In November 2020, the Board of Directors authorized the repurchase of up to $1.0 billion of Dominion Energy’s common stock, with $0.9 billion available as of September 30, 2024. Dominion Energy did not repurchase any shares of common stock during the nine months ended September 30, 2024, except for shares tendered by employees to satisfy tax withholding obligations on vested restricted stock, which do not count against its stock repurchase authorization.

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