Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Note 2. Significant Accounting Policies

As permitted by the rules and regulations of the SEC, the Companies’ accompanying unaudited Consolidated Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2023.

In the Companies’ opinion, the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary to present fairly their financial position at March 31, 2024, and results of operations, changes in equity and cash flows for the three months ended March 31, 2024 and 2023. Such adjustments are normal and recurring in nature unless otherwise noted.

The Companies make certain estimates and assumptions in preparing their Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates.

The Companies’ accompanying unaudited Consolidated Financial Statements include, after eliminating intercompany transactions and balances, their accounts, those of their respective majority-owned subsidiaries and non-wholly-owned entities in which they have a controlling financial interest. For certain partnership structures, income is allocated based on the liquidation value of the underlying contractual arrangements.

The results of operations for interim periods are not necessarily indicative of the results expected for the full year. Information for quarterly periods is affected by seasonal variations in sales, rate changes, electric fuel and other energy-related purchases, purchased gas expenses and other factors.

Certain amounts in the Companies’ 2023 Consolidated Financial Statements and Notes have been reclassified to conform to the 2024 presentation for comparative purposes; however, such reclassifications did not affect the Companies’ net income, total assets, liabilities, equity or cash flows.

Amounts disclosed for Dominion Energy are inclusive of Virginia Power, where applicable. There have been no significant changes from Note 2 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2023, with the exception of the items described below.

Cash, Restricted Cash and Equivalents

Restricted Cash and Equivalents

The following table provides a reconciliation of the total cash, restricted cash and equivalents reported within the Companies’ Consolidated Balance Sheets to the corresponding amounts reported within the Companies’ Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023:


	Cash, Restricted Cash and Equivalents at End of Period				Cash, Restricted Cash and Equivalents at Beginning of Period
	March 31, 2024		March 31, 2023		December 31, 2023		December 31, 2022
(millions)
Dominion Energy
Cash and cash equivalents(1)	$	306	$	1,792	$	217	$	153
Restricted cash and equivalents(2)(4)		30		164		84		188
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows	$	336	$	1,956	$	301	$	341
Virginia Power
Cash and cash equivalents	$	119	$	21	$	90	$	22
Restricted cash and equivalents(3)(4)		6		1		—		2
Cash, restricted cash and equivalents shown in the Consolidated Statements of Cash Flows	$	125	$	22	$	90	$	24

(1)

At March 31, 2024, March 31, 2023, December 31, 2023 and December 31, 2022, Dominion Energy had $41 million, $40 million, $33 million and $34 million, respectively, of cash and cash equivalents included in current assets held for sale.

(2)

At March 31, 2024, March 31, 2023, December 31, 2023 and December 31, 2022, Dominion Energy had $4 million, $1 million, $4 million and $2 million, respectively, of restricted cash and equivalents included in current assets held for sale with the remaining balances presented within other current assets in Dominion Energy’s Consolidated Balance Sheets.

(3)

Restricted cash and equivalents balances are presented within other current assets in Virginia Power’s Consolidated Balance Sheets.

(4)

Includes $6 million attributable to VIEs at March 31, 2024.

Supplemental Cash Flow Information

The following table provides supplemental disclosure of cash flow information related to Dominion Energy:


Three Months Ended March 31,	2024		2023
(millions)
Significant noncash investing and financing activities:(1)
Accrued capital expenditures	$	753	$	671
Leases(2)		161		117

(1)

See Notes 3 and 17 for noncash financing activities related to debt assumed with closing of the East Ohio Transaction and the transfer of property associated with the settlement of litigation.

(2)

Includes $26 million and $32 million of financing leases at March 31, 2024 and 2023, respectively, and $135 million and $85 million of operating leases at March 31, 2024 and 2023, respectively.

The following table provides supplemental disclosure of cash flow information related to Virginia Power:


Three Months Ended March 31,	2024		2023
(millions)
Significant noncash investing and financing activities:
Accrued capital expenditures	$	566	$	460
Leases(1)		142		99

(1)

Includes $22 million and $31 million of financing leases at March 31, 2024 and 2023, respectively, and $120 million and $68 million of operating leases at March 31, 2024 and 2023, respectively.

New Accounting Standards

Climate-Related Disclosures

In March 2024, the SEC issued guidance for climate-related disclosures. The guidance requires disclosure of the financial statement impacts of severe weather events and other natural conditions, including amounts capitalized or expensed as well as any associated recoveries. In addition, the guidance requires disclosure of amounts related to renewable energy credits or carbon offsets if utilized as

a material component of plans to achieve climate-related targets or goals. This guidance, which is currently subject to a stay issued by the SEC, would be effective for the fiscal year beginning January 1, 2025. The Companies expect this guidance to only impact their disclosures with no impacts to their results of operations, cash flows or financial condition.