Income Taxes

3 Months Ended

Mar. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Note 5. Income Taxes

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
Three Months Ended March 31,	2025			2024			2025			2024
U.S. statutory rate		21.0	%		21.0	%		21.0	%		21.0	%
Increases (reductions) resulting from:
State taxes, net of federal    benefit		4.8			2.8			4.4			4.4
Investment tax credits		(3.1	)		(2.4	)		(0.9	)		(0.7	)
Production tax credits		(6.1	)		(1.8	)		(4.4	)		(0.9	)
Reversal of excess deferred    income taxes		(2.1	)		(3.9	)		(1.9	)		(1.7	)
Remeasurements and     settlements of uncertain     tax positions		(4.0	)		—			—			—
AFUDC - equity		(1.0	)		(1.3	)		(1.1	)		(0.7	)
Absence of tax on     noncontrolling interest		(2.2	)		—			(2.5	)
Other, net		0.1			0.1			0.2			0.2
Effective tax rate		7.4	%		14.5	%		14.8	%		21.6	%

The IRA created a nuclear production tax credit for electricity produced and sold beginning in 2024 and a clean fuel production tax credit for clean fuel produced and sold beginning in 2025. For the three months ended March 31, 2025, Dominion Energy’s and Virginia Power’s effective tax rate includes a $19 million income tax benefit for the nuclear production tax credit. For the same period, Dominion Energy’s effective tax rate includes a $14 million income tax benefit for the clean fuel production tax credit. The ultimate nuclear and clean fuel production tax credits realized by the Companies could vary significantly based on pending final U.S. Treasury guidance. No amounts were realized for the three months ended March 31, 2024.

As of March 31, 2025, Dominion Energy’s effective tax rate reflects an income tax net benefit of $18 million reflecting a $30 million remeasurement of an unrecognized tax benefit partially deferred to regulatory liabilities. During the first quarter of 2025, Dominion Energy realized substantially all of its unrecognized tax benefits in continuing operations that were outstanding as of December 31, 2024. See Note 5 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2024, for a discussion of these unrecognized tax benefits.

Discontinued operations

Income tax expense reflected in discontinued operations is less than $1 million and $54 million for the three months ended March 31, 2025 and 2024, respectively. See Note 3 for a discussion of tax expense reflected in discontinued operations during the first quarter of 2024.