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.

In June 2021, Dominion Energy amended its $6.0 billion joint revolving credit facility to provide 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. In addition, the amended facility incorporates certain administrative changes with respect to the anticipated transition from LIBOR to an alternative benchmark rate. The key financial covenants are unchanged from the previous facility.

At September 30, 2021, 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⁾

6,000

3,494

2,407

DESC and Questar Gas’ short-term financings are supported through access as co-borrowers to the joint revolving credit facility discussed above with the Companies. At September 30, 2021, the sub-limits for DESC and Questar Gas were $500 million and $250 million, respectively.

In January 2021, DESC and GENCO applied to FERC for a two-year short-term borrowing authorization. In March 2021, FERC granted DESC authority through March 2023 to issue short-term indebtedness (pursuant to Section 204 of the Federal Power Act) in amounts not to exceed $2.2 billion outstanding with maturity dates of one year or less. In addition, in March 2021, FERC granted GENCO authority through March 2023 to issue short-term indebtedness not to exceed $200 million outstanding with maturity dates of one year or less.

In addition to the credit facilities mentioned above, Dominion Energy also has a credit facility which allows Dominion Energy to issue up to approximately $30 million in letters of credit and matures in June 2022. At September 30, 2021 and December 31, 2020, Dominion Energy had $29 million and $30 million in letters of credit outstanding under this agreement, respectively.

In addition to the credit facilities mentioned above, SBL Holdco has $30 million of credit facilities which had an original stated maturity date of December 2017 with automatic one-year renewals through the maturity of the SBL Holdco term loan agreement in 2023. Dominion Solar Projects III, Inc. has $25 million of credit facilities which had an original stated maturity date of May 2018 with automatic one-year renewals through the maturity of the Dominion Solar Projects III, Inc. term loan agreement in 2024. At both September 30, 2021 and December 31, 2020, no amounts were outstanding under either of these facilities.

In March 2020, Dominion Energy entered into a $900 million 364-Day Revolving Credit Agreement that bore interest at a variable rate. At December 31, 2020, $225 million was outstanding under the agreement. In March 2021, the agreement reached maturity and Dominion Energy repaid the outstanding borrowed amount in full.

In July 2021, Dominion Energy entered into an approximately $1.3 billion term loan credit agreement following the termination of the Q-Pipe Transaction as discussed in Note 3.

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 Investment^SM 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, 2020. At September 30, 2021 and December 31, 2020, Dominion Energy’s Consolidated Balance Sheets include $391 million and $268 million, respectively, with respect to such notes presented within short-term debt. The proceeds are used for general corporate purposes and to repay debt.

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, as amended in June 2021. The facility can be used for working capital, as support for the combined commercial paper programs of Virginia Power, Dominion Energy, Questar Gas and DESC and for other general corporate purposes.

At September 30, 2021, Virginia Power’s share of commercial paper and letters of credit outstanding under the joint revolving credit facility with Dominion Energy, Questar Gas and DESC was as follows:

Facility

Limit⁽¹⁾

Outstanding

Commercial

Paper

Outstanding

Letters of

Credit

(millions)

Joint revolving credit facility⁽¹⁾

6,000

896

(1)

The full amount of the facility is available to Virginia Power, less any amounts outstanding to co-borrowers Dominion Energy, Questar Gas 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, 2021, 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.

Unless otherwise noted, the proceeds of long-term debt issuances were used for general corporate purposes and/or to repay short-term debt.

In March 2021, PSNC issued, through private placement, $150 million of 3.10% senior notes that mature in 2051.

In April 2021, Dominion Energy issued $600 million of 1.45% senior notes and $500 million of 3.30% senior notes that mature in 2026 and 2041, respectively.

In June 2021, Dominion Energy entered into a $900 million Sustainability Revolving Credit Agreement. This supplemental credit facility, which matures in June 2024 and bears interest at a variable rate, offers a reduced interest rate margin with respect to borrowed amounts allocated to certain environmental sustainability or social investment initiatives. Proceeds of the supplemental credit facility also may be used for general corporate purposes, but such proceeds are not eligible for a reduced interest rate margin. At September 30, 2021, $900 million was outstanding under the supplemental credit facility. The proceeds from these borrowings were used to support environmental sustainability and social investment initiatives ($250 million) and for general corporate purposes ($650 million). The maximum allowed total debt to total capital ratio under this supplemental credit facility is consistent with such allowed ratio under Dominion Energy’s joint revolving credit facility.

In July 2021, DESC redeemed the remaining principal outstanding of $30 million of its 3.22% first mortgage bonds, plus accrued interest. The bonds would have otherwise matured in October 2021.

In July 2021, Dominion Energy redeemed the remaining principal outstanding of $400 million of its 2.0% senior notes, plus accrued interest. The notes would have otherwise matured in August 2021.

In August 2021, Dominion Energy issued $1.0 billion of 2.25% senior notes that mature in 2031. The proceeds from this offering will be used to finance and/or refinance, in whole or in part, existing and future expenditures associated with the development, construction, acquisition and operation of certain solar projects.

In August 2021, Dominion Energy redeemed the remaining principal outstanding of $800 million of its July 2016 hybrids, which matured in 2076 and were listed on the NYSE under the symbol DRUA. Expenses related to the early redemption of the hybrids were $23 million reflected within interest and related charges in the Consolidated Statements of Income for the three and nine months ended September 30, 2021.

In August 2021, Questar Gas issued through private placements $125 million of 2.21% senior notes and $125 million of 3.15% senior notes that mature in 2031 and 2051, respectively.

In November 2021, Virginia Power provided notice to redeem its 2.95% senior notes, which would have otherwise matured in January 2022, at the remaining principal outstanding of $450 million plus accrued interest.

In June 2020, Dominion Energy amended a portfolio of interest rate swaps with a notional value of $2.0 billion, extending the mandatory termination dates from 2020 and 2021 to December 2024. As a result of this noncash financing activity with an embedded interest rate swap, Dominion Energy recorded $326 million in other long-term debt representing the net present value of the initial fair value measurement of the new contract as discussed in Note 18 to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020. In August 2021, Dominion Energy settled certain of the outstanding interest rate swaps which would have otherwise matured in December 2024, resulting in a $39 million reduction in other long-term debt.

In August 2020, Virginia Power amended a portfolio of interest rate swaps with a notional value of $900 million, extending the mandatory termination dates from 2020 to December 2023. As a result of this noncash financing activity with an embedded interest rate swap, Virginia Power recorded $443 million in other long-term debt representing the net present value of the initial fair value measurement of the new contract as discussed in Note 18 to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2020.

Dominion Energy is authorized to issue up to 20 million shares of preferred stock, which may be designated into separate classes. At both September 30, 2021 and December 31, 2020, Dominion Energy had issued and outstanding 2.4 million shares of preferred stock, 1.6 million and 0.8 million of which were designated as the Series A Preferred Stock and the Series B Preferred Stock, respectively.

Dominion Energy recorded dividends of $7 million ($4.375 per share) for both the three months ended September 30, 2021 and 2020, and $21 million ($13.125 per share) for both the nine months ended September 30, 2021 and 2020, on the Series A Preferred Stock. Dominion Energy also recorded dividends of $9 million ($11.625 per share) for both the three months ended September 30, 2021 and 2020, and $27 million ($34.875 per share) for both the nine months ended September 30, 2021 and 2020, on Series B Preferred Stock. The stock purchase contract liability associated with Dominion Energy’s 2019 Equity Units was $65 million and $129 million at September 30, 2021 and December 31, 2020, respectively. Stock purchase contract payments of $64 million and $62 million were made during the nine months ended September 30, 2021 and 2020, respectively. In calculating diluted EPS, Dominion Energy applies the treasury stock method to the stock purchase contracts and the if-converted method to the Series A Preferred Stock.

There have been no significant changes to Dominion Energy’s Series A Preferred Stock and Series B 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, 2020, other than the item described below.

In November 2021, Dominion Energy’s Articles of Incorporation were amended to require that any conversion of its Series A Preferred Stock be settled, at Dominion Energy’s election, either entirely in cash or in cash up to the first $1,000 per share and in shares of Dominion Energy common stock, cash or any combination thereof for any amounts in excess of $1,000 per share. As a result of establishing a minimum amount to be settled in cash if the holders elect to convert the Series A Preferred Stock, $1.6 billion will be reclassified from equity to mezzanine equity in the fourth quarter of 2021.

Dominion Energy recorded, net of fees and commissions, $292 million from the issuance of 4 million shares of common stock for the nine months ended September 30, 2021 and $481 million from the issuance of 6.2 million shares of common stock for the nine months ended September 30, 2020, through various programs including Dominion Energy Direct® and employee savings plans, as well as settlements of litigation 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, 2020.

In July 2021, Dominion Energy issued 1.4 million shares of its common stock, valued at $104 million, to satisfy DESC’s obligation under a settlement agreement for the FILOT litigation discussed in Note 17.

In August 2021, Dominion Energy issued 0.6 million shares of its common stock, valued at $45 million, to satisfy DESC’s obligation for the initial payment under a settlement agreement with the SCDOR discussed in Note 17.

In September 2020, Dominion Energy issued 4.1 million shares of its common stock to satisfy its obligation under a settlement agreement for the Santee Cooper Ratepayer Case discussed in Note 17. These shares were immediately repurchased as discussed below.

In August 2020, Dominion Energy entered into sales agency agreements to effect sales under an at-the-market program as discussed in Note 20 to the Consolidated Financial Statements in the Companies’ Annual Report Form 10-K for the year ended December 31, 2020. As of September 30, 2021, Dominion Energy has not issued any shares or entered into any forward sale agreements under this program.

In November 2020, the Board of Directors authorized the repurchase of up to $1.0 billion of Dominion Energy’s common stock in addition to the $3.0 billion repurchase program authorized in July 2020 and completed in December 2020 as discussed in Note 20 to the Consolidated Financial Statements in the Companies’ Annual Report Form 10-K for the year ended December 31, 2020.

In August 2020, Dominion Energy began repurchasing shares under an open market agreement with a financial institution. During the third quarter of 2020, Dominion Energy repurchased 7.2 million shares of Dominion Energy common stock for $562 million.

In September 2020, Dominion Energy entered into two prepaid accelerated share repurchase agreements with separate financial institutions as counterparties, which was ultimately completed in November 2020. Dominion Energy made payments totaling $1.5 billion to the counterparties in exchange for an aggregate of approximately 17.2 million shares of Dominion Energy common stock, which represented approximately 90% of $1.5 billion worth of Dominion Energy shares based on the closing price of such shares on the date the agreements were executed. As a result, Dominion Energy recorded a reduction to common stock of $1.5 billion during the third quarter of 2020.

In September 2020, Dominion Energy repurchased 4.1 million shares of Dominion Energy common stock in a private transaction for $323 million.

Dominion Energy did not repurchase any shares of common stock during the nine months ended September 30, 2021.