Derivatives and Hedge Accounting Activities

9 Months Ended

Sep. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedge Accounting Activities

Note 9. Derivatives and Hedge Accounting Activities

The Companies’ accounting policies, objectives and strategies for using derivative instruments and cash collateral or other instruments under master netting or similar arrangements are discussed in Notes 2 and 7 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2023. See Note 8 in this report for additional information about fair value measurements and associated valuation methods for derivatives. See Note 18 for additional information regarding credit-related contingent features for the Companies’ derivative instruments.

Balance Sheet Presentation

The tables below present the Companies’ derivative asset and liability balances by type of financial instrument, if the gross amounts recognized in their Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid:

	Dominion Energy Gross Amounts Not Offset in the Consolidated Balance Sheet								Virginia Power Gross Amounts Not Offset in the Consolidated Balance Sheet
	Gross Assets Presented in the Consolidated Balance Sheet(1)		Financial Instruments		Cash Collateral Received		Net Amounts		Gross Assets Presented in the Consolidated Balance Sheet(1)		Financial Instruments		Cash Collateral Received		Net Amounts
(millions)
September 30, 2024
Commodity contracts:
Over-the-counter	$	185	$	28	$	—	$	157	$	132	$	15	$	—	$	117
Exchange		104		46		—		58		3		2		—		1
Interest rate contracts:
Over-the-counter		702		17		—		685		45		—		—		45
Foreign currency exchange rate contracts:
Over-the-counter		8		8		—		—		8		8		—		—
Total derivatives,    subject to a    master netting    or similar    arrangement	$	999	$	99	$	—	$	900	$	188	$	25	$	—	$	163
December 31, 2023
Commodity contracts:
Over-the-counter	$	289	$	26	$	—	$	263	$	112	$	13	$	—	$	99
Exchange		118		33		15		70		4		3		—		1
Interest rate contracts:
Over-the-counter		800		191		—		609		181		11		—		170
Total derivatives,    subject to a    master netting    or similar    arrangement	$	1,207	$	250	$	15	$	942	$	297	$	27	$	—	$	270

(1)Excludes derivative assets of $161 million and $143 million at Dominion Energy and $11 million and $1 million at Virginia Power at September 30, 2024 and December 31, 2023, respectively, which are not subject to master netting or other similar arrangements.

	Dominion Energy Gross Amounts Not Offset in the Consolidated Balance Sheet								Virginia Power Gross Amounts Not Offset in the Consolidated Balance Sheet
	Gross Liabilities Presented in the Consolidated Balance Sheet(1)		Financial Instruments		Cash Collateral Paid		Net Amounts		Gross Liabilities Presented in the Consolidated Balance Sheet(1)		Financial Instruments		Cash Collateral Paid		Net Amounts
(millions)
September 30, 2024
Commodity contracts:
Over-the-counter	$	59	$	28	$	—	$	31	$	21	$	15	$	—	$	6
Exchange		46		46		—		—		2		2		—		—
Interest rate contracts:
Over-the-counter		20		17		—		3		—		—		—		—
Foreign currency exchange rate contracts:
Over-the-counter		52		8		—		44		52		8		—		44
Total derivatives,    subject to a    master netting    or similar    arrangement	$	177	$	99	$	—	$	78	$	75	$	25	$	—	$	50
December 31, 2023
Commodity contracts:
Over-the-counter	$	266	$	26	$	30	$	210	$	153	$	13	$	30	$	110
Exchange		33		33		—		—		3		3		—		—
Interest rate contracts:
Over-the-counter		359		186		—		173		45		6		—		39
Foreign currency exchange rate contracts:
Over-the-counter		39		5		—		34		39		5		—		34
Total derivatives,    subject to a    master netting    or similar    arrangement	$	697	$	250	$	30	$	417	$	240	$	27	$	30	$	183

(1)Excludes derivative liabilities of $4 million at Dominion Energy at September 30, 2024 and $37 million and $76 million at Virginia Power at September 30, 2024 and December 31, 2023, respectively, which are not subject to master netting or similar arrangements. Dominion Energy did not have any derivative liabilities at December 31, 2023 which were not subject to master netting or similar arrangements.

AOCI

The following table presents selected information related to gains (losses) on cash flow hedges included in AOCI in the Companies’ Consolidated Balance Sheets at September 30, 2024:

	Dominion Energy							Virginia Power
	AOCI After-Tax			Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax			Maximum Term	AOCI After-Tax		Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax		Maximum Term
(millions)
Interest rate	$	(190	)	$	(30	)	375 months	$	17	$	1	375 months
Total	$	(190	)	$	(30	)		$	17	$	1

The amounts that will be reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., interest rate payments) in earnings, thereby achieving the realization of prices contemplated by the underlying risk management strategies and will vary from the expected amounts presented above as a result of changes in interest rates.

Fair Value and Gains and Losses on Derivative Instruments

The following table presents the fair values of the Companies’ derivatives and where they are presented in their Consolidated Balance Sheets:

	Dominion Energy						Virginia Power
	Fair Value – Derivatives under Hedge Accounting		Fair Value – Derivatives not under Hedge Accounting		Total Fair Value		Fair Value – Derivatives under Hedge Accounting		Fair Value – Derivatives not under Hedge Accounting		Total Fair Value
(millions)
At September 30, 2024
ASSETS
Current Assets
Commodity	$	—	$	235	$	235	$	—	$	130	$	130
Interest rate		—		305		305		—		—		—
Foreign currency    exchange rate		—		5		5		—		5		5
Total current derivative assets		—		545		545		—		135		135
Noncurrent Assets
Commodity		—		215		215		—		16		16
Interest rate		45		352		397		45		—		45
Foreign currency    exchange rate		—		3		3		—		3		3
Total noncurrent derivative assets(1)		45		570		615		45		19		64
Total derivative assets	$	45	$	1,115	$	1,160	$	45	$	154	$	199
LIABILITIES
Current Liabilities
Commodity	$	—	$	81	$	81	$	—	$	54	$	54
Interest rate		—		—		—		—		—		—
Foreign currency exchange rate		—		26		26		—		26		26
Total current derivative liabilities		—		107		107		—		80		80
Noncurrent Liabilities
Commodity		—		28		28		—		6		6
Interest rate		—		20		20		—		—		—
Foreign currency exchange rate		—		26		26		—		26		26
Total noncurrent derivative liabilities(2)		—		74		74		—		32		32
Total derivative liabilities	$	—	$	181	$	181	$	—	$	112	$	112
At December 31, 2023
ASSETS
Current Assets
Commodity	$	—	$	312	$	312	$	—	$	91	$	91
Interest rate		143		298		441		143		—		143
Total current derivative assets(3)		143		610		753		143		91		234
Noncurrent Assets
Commodity		—		238		238		—		26		26
Interest rate		38		321		359		38		—		38
Total noncurrent derivative assets(1)		38		559		597		38		26		64
Total derivative assets	$	181	$	1,169	$	1,350	$	181	$	117	$	298
LIABILITIES
Current Liabilities
Commodity	$	—	$	244	$	244	$	—	$	188	$	188
Interest rate		45		76		121		45		—		45
Foreign currency exchange rate		—		11		11		—		11		11
Total current derivative liabilities(4)		45		331		376		45		199		244
Noncurrent Liabilities
Commodity		—		55		55		—		44		44
Interest rate		—		238		238		—		—		—
Foreign currency exchange rate		—		28		28		—		28		28
Total noncurrent derivative liabilities(2)		—		321		321		—		72		72
Total derivative liabilities	$	45	$	652	$	697	$	45	$	271	$	316

(1)Noncurrent derivative assets are presented in other deferred charges and other assets in the Companies’ Consolidated Balance Sheets.

(2)Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in the Companies’ Consolidated Balance Sheets.

(3)Includes $54 million recorded in current assets held for sale in Dominion Energy’s Consolidated Balance Sheets at December 31, 2023.

(4)Includes $30 million recorded in current liabilities held for sale in Dominion Energy’s Consolidated Balance Sheets at December 31, 2023.

The following tables present the gains and losses on the Companies’ derivatives, as well as where the associated activity is presented in their Consolidated Balance Sheets and Statements of Income.

	Dominion Energy									Virginia Power
Derivatives in cash flow    hedging relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives(1)			Amount of Gain (Loss) Reclassified from AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2)			Amount of Gain (Loss) Recognized in AOCI on Derivatives(1)			Amount of Gain (Loss) Reclassified from AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment(2)
(millions)
Three Months Ended September 30, 2024
Derivative type and location of gains (losses):
Interest rate(3)	$	(10	)	$	(11	)	$	(110	)	$	(10	)	$	—		$	(109	)
Total	$	(10	)	$	(11	)	$	(110	)	$	(10	)	$	—		$	(109	)
Three Months Ended September 30, 2023
Derivative type and location of gains (losses):
Interest rate(3)	$	25			(11	)	$	268		$	25		$	(1	)	$	267
Total	$	25		$	(11	)	$	268		$	25		$	(1	)	$	267
Nine Months Ended September 30, 2024
Derivative type and location of gains (losses):
Interest rate(3)	$	2		$	(33	)	$	20		$	2		$	—		$	20
Total	$	2		$	(33	)	$	20		$	2		$	—		$	20
Nine Months Ended September 30, 2023
Derivative type and location of gains (losses):
Interest rate(3)	$	21		$	(32	)	$	236		$	21		$	(1	)	$	235
Total	$	21		$	(32	)	$	236		$	21		$	(1	)	$	235

(1)Amounts deferred into AOCI have no associated effect in the Companies’ Consolidated Statements of Income.

(2)Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in the Companies’ Consolidated Statements of Income.

(3)Amounts recorded in the Companies’ Consolidated Statements of Income are classified in interest and related charges.

	Amount of Gain (Loss) Recognized in Income on Derivatives(1)(2)
Derivatives not designated as hedging instruments	Dominion Energy												Virginia Power
	Quarter-to-Date						Year-to-Date						Quarter-to-Date						Year-to-Date
Period Ended September 30,	2024			2023			2024			2023			2024			2023			2024			2023
(millions)
Derivative type and location of gains (losses):
Commodity:
Operating revenue	$	123		$	7		$	184		$	428		$	31		$	6		$	107		$	25
Electric fuel and other energy-related     purchases		2			(149	)		(188	)		(267	)		(1	)		(151	)		(188	)		(270	)
Operations and maintenance		—			—			—			2			—			—			—			2
Discontinued operations		(3	)		—			(28	)		94
Interest rate:
Interest and related charges		77			274			(14	)		227
Discontinued operations		—			(7	)		—			17
Total	$	199		$	125		$	(46	)	$	501		$	30		$	(145	)	$	(81	)	$	(243	)

(1)Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in the Companies’ Consolidated Statements of Income.

(2)Excludes amounts related to foreign currency exchange rate derivatives that are deferred to plant under construction within property, plant and equipment and regulatory assets/liabilities that will begin to amortize once the CVOW Commercial Project is placed in service.