Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2019

Fair Value Inputs, Assets, Quantitative Information

The following table presents Dominion Energy’s quantitative information about Level 3 fair value measurements at December 31, 2019. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.

	Fair Value (millions)		Valuation Techniques		Unobservable Input		Range		Weighted Average(1)
Assets
Physical and financial forwards:
Natural gas(2)		$  13		Discounted cash flow		Market price (per Dth)(3)		(1) - 4		—
FTRs		6		Discounted cash flow		Market price (per MWh)(3)		(1) - 5		1
Total assets		$  19
Liabilities
Physical and financial forwards:
Natural gas(2)		$  43		Discounted cash flow		Market price (per Dth)(3)		(2) - 4		(1	)
FTRs		5		Discounted cash flow		Market price (per MWh)(3)		(4) - 4		—
Physical options:
Natural gas		8		Option model		Market price (per Dth)(3)		1 - 4		3
						Price volatility(4)		24% - 66%		37	%
Total liabilities		$  56

(1) Averages weighted by volume.

(2) Includes basis.

(3) Represents market prices beyond defined terms for Levels 1 and 2.

(4) Represents volatilities unrepresented in published markets.

Fair Value, Option, Qualitative Disclosures

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:

Significant Unobservable Inputs	Position		Change to Input		Impact on Fair Value Measurement
Market price		Buy		Increase (decrease)		Gain (loss)
Market price		Sell		Increase (decrease)		Loss (gain)
Price volatility		Buy		Increase (decrease)		Gain (loss)
Price volatility		Sell		Increase (decrease)		Loss (gain)

Fair Value, by Balance Sheet Grouping

The following table presents Dominion Energy’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:

	Level 1		Level 2		Level 3		Total
(millions)
December 31, 2019
Assets
Derivatives:
Commodity	$	—	$	55		$  19	$	74
Interest rate		—		11		—		11
Foreign currency		—		8		—		8
Investments(1):
Equity securities:
U.S.		4,195		—		—		4,195
Fixed income:
Corporate debt instruments		—		463		—		463
Government securities		473		719		—		1,192
Cash equivalents and other		19		1		—		20
Total assets	$	4,687	$	1,257		$  19	$	5,963
Liabilities
Derivatives:
Commodity	$	—	$	75		$  56	$	131
Interest rate		—		606		—		606
Foreign currency		—		3		—		3
Total liabilities	$	—	$	684		$56	$	740
December 31, 2018
Assets
Derivatives:
Commodity	$	—	$	180		$  70	$	250
Interest rate		—		18		—		18
Foreign currency		—		26		—		26
Investments(1):
Equity securities:
U.S.		3,277		—		—		3,277
Fixed income:
Corporate debt instruments		—		431		—		431
Government securities		455		688		—		1,143
Cash equivalents and other		11		—		—		11
Total assets	$	3,743	$	1,343		$  70	$	5,156
Liabilities
Derivatives:
Commodity	$	—	$	129		$    6	$	135
Interest rate		—		142		—		142
Foreign currency		—		2		—		2
Total liabilities	$	—	$	273		$    6	$	279

(1) Includes investments held in the nuclear decommissioning and rabbi trusts. Excludes $274 million and $220 million of assets at December 31, 2019 and 2018, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents the net change in Dominion Energy’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:

	2019			2018			2017
(millions)
Balance at January 1,	$	64		$	150		$	139
Total realized and unrealized gains (losses):
Included in earnings:
Operating Revenue		(1	)		(2	)		3
Electric fuel and other energy-related purchases		(22	)		(15	)		(42	)
Purchased gas		2			—			1
Included in other comprehensive income (loss)		—			1			(2	)
Included in regulatory assets/liabilities		(90	)		(44	)		42
Settlements		17			(27	)		6
Purchases		(10	)		—			—
Sales		6			—			—
Transfers out of Level 3		(3	)		1			3
Balance at December 31,	$	(37	)	$	64		$	150
The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets still held at the reporting date:
Operating Revenue	$	—		$	—		$	2

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

For the Companies’ financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:

December 31,	2019				2018
	Carrying Amount		Estimated Fair Value(1)		Carrying Amount		Estimated Fair Value(1)
(millions)
Dominion Energy
Long-term debt(2)	$	32,055		$36,155	$	29,952		$31,045
Credit facility borrowings		—		—		73		73
Junior subordinated notes(3)		4,797		4,953		3,430		3,358
Remarketable subordinated notes(3)		—		—		1,386		1,340
Virginia Power
Long-term debt(3)	$	12,326		$14,281	$	11,671		$12,400
Dominion Energy Gas
Long-term debt(4)	$	5,520		$5,738	$	7,770		$7,803
Credit facility borrowings		—		—		73		73

(1) Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issuances with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value.

(2) Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium, and foreign currency remeasurement adjustments. At December 31, 2019 and 2018, includes the valuation of certain fair value hedges associated with Dominion Energy’s fixed rate debt of $4 million and $(20) million, respectively.

(3) Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium.

(4) Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs, discount or premium, and foreign currency remeasurement adjustments.

Virginia Electric and Power Company

Fair Value Inputs, Assets, Quantitative Information

VIRGINIA POWER

The following table presents Virginia Power’s quantitative information about Level 3 fair value measurements at December 31, 2019. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.

	Fair Value (millions)		Valuation Techniques		Unobservable Input		Range		Weighted Average(1)
Assets
Physical and financial forwards:
Natural gas(2)		$  13		Discounted cash flow		Market price (per Dth)(3)		(1) - 4		—
FTRs		6		Discounted cash flow		Market price (per MWh)(3)		(1) - 5		1
Total assets		$  19
Liabilities
Physical and financial forwards:
Natural gas(2)		$  43		Discounted cash flow		Market price (per Dth)(3)		(2) - 4		(1	)
FTRs		5		Discounted cash flow		Market price (per MWh)(3)		(4) - 4		—
Physical options:
Natural gas		8		Option model		Market price (per Dth)(3)		1 - 4		3
						Price volatility(4)		24%—66%		37	%
Total liabilities		$  56

(1) Averages weighted by volume.

(2) Includes basis.

(3) Represents market prices beyond defined terms for Levels 1 and 2.

(4) Represents volatilities unrepresented in published markets.

Fair Value, Option, Qualitative Disclosures

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:

Significant Unobservable Inputs	Position		Change to Input		Impact on Fair Value Measurement
Market price		Buy		Increase (decrease)		Gain (loss)
Market price		Sell		Increase (decrease)		Loss (gain)
Price volatility		Buy		Increase (decrease)		Gain (loss)
Price volatility		Sell		Increase (decrease)		Loss (gain)

Fair Value, by Balance Sheet Grouping

The following table presents Virginia Power’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:

	Level 1		Level 2		Level 3		Total
(millions)
December 31, 2019
Assets
Derivatives:
Commodity	$	—		$    3		$19	$	22
Interest rate		—		2		—		2
Investments(1):
Equity securities:
U.S.		1,920		—		—		1,920
Fixed income:
Corporate debt instruments		—		256		—		256
Government securities		186		361		—		547
Cash equivalents and other		—		1		—		1
Total assets	$	2,106		$623		$19	$	2,748
Liabilities
Derivatives:
Commodity	$	—		$  47		$56	$	103
Interest rate		—		363		—		363
Total liabilities	$	—		$410		$56	$	466
December 31, 2018
Assets
Derivatives:
Commodity	$	—		$  24		$66	$	90
Interest rate		—		3		—		3
Investments(1):
Equity securities:
U.S.		1,476		—		—		1,476
Fixed income:
Corporate debt instruments		—		221		—		221
Government securities		164		343		—		507
Total assets	$	1,640		$591		$66	$	2,297
Liabilities
Derivatives:
Commodity	$	—		$    9		$  6	$	15
Interest rate		—		88		—		88
Total liabilities	$	—		$  97		$  6	$	103

(1) Includes investments held in the nuclear decommissioning trusts. Excludes $159 million and $160 million of assets at December 31, 2019 and 2018, respectively, measured at fair value using NAV (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents the net change in Virginia Power’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:

	2019			2018			2017
(millions)
Balance at January 1,	$	60		$	147		$	143
Total realized and unrealized gains (losses):
Included in earnings:
Electric fuel and other energy-related purchases		(22	)		(17	)		(43	)
Included in regulatory assets/liabilities		(88	)		(45	)		40
Settlements		13			(25	)		7
Balance at December 31,	$	(37	)	$	60		$	147

Dominion Energy Gas Holdings, LLC

Fair Value, by Balance Sheet Grouping

The following table presents Dominion Energy Gas’ assets and liabilities for derivatives that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:

	Level 1		Level 2		Level 3		Total
(millions)
December 31, 2019
Assets
Foreign currency		$ —		$8		$   —		$8
Total assets		$ —		$8		$   —		$8
Liabilities
Interest rate		$ —		$83		$   —		$83
Foreign currency		—		3		—		3
Total liabilities		$ —		$86		$   —		$86
December 31, 2018
Assets
Commodity		$ —		$3		$   —		$3
Interest rate		—		2		—		2
Foreign currency		—		26		—		26
Total assets		$ —		$31		$   —		$31
Liabilities
Interest rate		$ —		$17		$   —		$17
Foreign currency		—		2		—		2
Total liabilities		$ —		$  19		$   —		$  19

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation

The following table presents the net change in Dominion Energy Gas’ derivative assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category. There were no changes in assets and liabilities measure at fair value on a recurring basis and included in the Level 3 fair value category during the year ended December 31, 2019.

	2018			2017
(millions)
Balance at January 1,		$(2	)		$(2	)
Total realized and unrealized gains (losses):
Included in other comprehensive income (loss)		1			(3	)
Transfers out of Level 3		1			3
Balance at December 31,		$—			$(2	)