DOMINION ENERGY SOUTH CAROLINA, INC., 10-Q filed on 5/5/2020
Quarterly Report
v3.20.1
Document and Entity Information - shares
 3 Months Ended
Mar. 31, 2020
Apr. 17, 2020
Cover [Abstract]    
Entity Registrant Name DOMINION ENERGY SOUTH CAROLINA, INC.  
Entity Central Index Key 0000091882  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Document Type 10-Q  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q1  
Amendment Flag false  
Entity Emerging Growth Company false  
Entity Small Business false  
Entity Common Stock, Shares Outstanding   40,296,147
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity File Number 001-3375  
Entity Tax Identification Number 57-0248695  
Entity Address, Address Line One 400 OTARRE PARKWAY  
Entity Address, City or Town CAYCE  
Entity Address, State or Province SC  
Entity Address, Postal Zip Code 29033  
City Area Code 803  
Local Phone Number 217-9000  
Entity Incorporation, State or Country Code SC  
Document Quarterly Report true  
Document Transition Report false  
Entity Interactive Data Current Yes  
Document Period End Date Mar. 31, 2020  
v3.20.1
Consolidated Balance Sheets (Unaudited) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
ASSETS    
Utility plant in service $ 13,293 $ 13,208
Accumulated depreciation and amortization (4,889) (4,851)
Construction work in progress 339 339
Nuclear fuel, net of accumulated amortization 208 219
Utility plant, net 8,951 8,915
Nonutility Property and Investments:    
Nonutility property, net of accumulated depreciation 68 69
Assets held in trust, nuclear decommissioning 209 214
Nonutility property and investments, net 277 283
Current Assets:    
Cash and cash equivalents 10 4
Receivables, customer, net of allowance for uncollectible accounts 304 320
Receivables, affiliated and related party 4 14
Receivables, other 102 119
Inventories (at average cost):    
Fuel 103 104
Materials and supplies 169 168
Prepayments 87 91
Regulatory assets 260 271
Other current assets 30 27
Total current assets 1,069 1,118
Deferred Debits and Other Assets:    
Regulatory assets 3,873 3,892
Other 92 93
Total deferred debits and other assets 3,965 3,985
Total assets 14,262 14,301
CAPITALIZATION AND LIABILITIES    
Common Stock - no par value 3,695 3,695
Retained earnings 108 20
Accumulated other comprehensive income (loss) (3) (3)
Total common equity 3,800 3,712
Noncontrolling interest 185 180
Total equity 3,985 3,892
Long-term debt, net 3,359 3,358
Affiliated long-term debt 230 230
Finance leases 19 20
Total long-term debt 3,608 3,608
Total capitalization 7,593 7,500
Current Liabilities:    
Securities due within one year 7 7
Accounts payable 153 245
Affiliated and related party payables 767 624
Customer deposits and customer prepayments 68 76
Taxes accrued 61 218
Interest accrued 82 88
Regulatory liabilities 281 256
Reserves for litigation and regulatory proceedings 492 492
Other 48 60
Total current liabilities 1,959 2,066
Deferred Credits and Other Liabilities:    
Deferred income taxes and investment tax credits 654 629
Asset retirement obligations 494 489
Pension and other postretirement benefits 202 203
Regulatory liabilities 3,151 3,210
Affiliated liabilities 14 15
Other 195 189
Total deferred credits and other liabilities 4,710 4,735
Commitments and Contingencies
Total capitalization and liabilities $ 14,262 $ 14,301
v3.20.1
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)
shares in Millions, $ in Millions
Mar. 31, 2020
Dec. 31, 2019
Utility plant, net $ 8,951 $ 8,915
Receivables, customer, allowance for uncollectible accounts 3 3
Total current assets 1,069 1,118
Total deferred debits and other assets $ 3,965 $ 3,985
Common stock, par value $ 0 $ 0
Common stock, shares outstanding 40.3 40.3
Variable Interest Entity, Primary Beneficiary [Member]    
Utility plant, net $ 714 $ 727
Total current assets 131 143
Total deferred debits and other assets $ 39 $ 32
v3.20.1
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Income Statement [Abstract]    
Operating Revenue [1] $ 672 $ (335)
Operating Expenses:    
Fuel used in electric generation [1] 104 137
Purchased power [1] 13 8
Gas purchased for resale [1] 57 77
Other operations and maintenance 90 96
Other operations and maintenance - affiliated suppliers 55 48
Impairment of assets and other charges 2 271
Depreciation and amortization 118 102
Other taxes [1] 62 69
Total operating expenses 501 808
Operating income (loss) 171 (1,143)
Other income (expense), net 3 (5)
Interest charges, net of allowance for borrowed funds used during construction of $2 and $-(1) [1] 58 73
Income (loss) before income tax expense (benefit) 116 (1,221)
Income tax expense (benefit) 23 (118)
Net Income (Loss) and Other Comprehensive Income (Loss) 93 (1,103)
Comprehensive Income Attributable to Noncontrolling Interest 5 6
Comprehensive Income (Loss) Available (Attributable) to Common Shareholder $ 88 $ (1,109)
[1] See Note 12 for amounts attributable to affiliates.
v3.20.1
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Income Statement [Abstract]    
Allowance for borrowed funds used during construction $ 2 $ 0
v3.20.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Operating Activities    
Net income (loss) $ 93 $ (1,103)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:    
Impairment of assets and other charges 2 262
Provision for refunds to customers 0 985
Deferred income taxes, net 25 (416)
Depreciation and amortization 118 104
Amortization of nuclear fuel 14 14
Other adjustments 2 (1)
Changes in certain assets and liabilities:    
Receivables 17 68
Receivables - affiliated and related party 4 0
Inventories (13) (23)
Prepayments 4 13
Pension and other postretirement benefits (1) 0
Regulatory assets (9) 180
Regulatory liabilities (48) 202
Accounts payable (20) (75)
Accounts payable - affiliated and related party (8) 3
Revenue subject to refund 0 (66)
Taxes accrued (157) (106)
Interest accrued (6) 0
Other assets and liabilities 3 (164)
Net cash provided by (used in) operating activities 20 (123)
Investing Activities    
Property additions and construction expenditures (166) (120)
Proceeds from investments and sales of assets 26 7
Purchase of investments (29) (10)
Short-term investments - affiliated 6 0
Investment in affiliate, net (1) 353
Net cash provided by (used in) investing activities (164) 230
Financing Activities    
Repayment of long-term debt, including redemption premiums 0 (1,210)
Dividend to parent 0 (29)
Contribution from parent 0 675
Money pool borrowings, net 0 273
Short-term borrowings, net 0 (73)
Short-term borrowings - affiliated, net 151 0
Other (1) 0
Net cash provided by (used in) financing activities 150 (364)
Net increase (decrease) in cash, restricted cash and equivalents 6 (257)
Cash, restricted cash and equivalents at beginning of period [1] 4 377
Cash, restricted cash and equivalents at end of period [1] 10 120
Significant noncash investing and financing activities:    
Accrued construction expenditures 53 25
Leases [2] $ 3 $ 2
[1] At March 31, 2020, March 31, 2019, December 31, 2019 and December 31, 2018 there were no restricted cash and equivalent balances.
[2] Includes $2 million of financing leases and $1 million of operating leases for the three months ended March 31, 2020 and $1 million of financing leases and $1 million of operating leases for the three months ended March 31, 2019.
v3.20.1
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Dec. 31, 2018
Statement Of Cash Flows [Abstract]        
Restricted cash and equivalents $ 0 $ 0 $ 0 $ 0
Financing leases 2 1    
Operating leases $ 1 $ 1    
v3.20.1
Consolidated Statements of Changes in Common Equity (Unaudited) - USD ($)
shares in Millions, $ in Millions
Total
Common Stock
Retained Earnings
AOCI
Noncontrolling Interest
Beginning balance at Dec. 31, 2018 $ 4,315 $ 2,860 $ 1,279 $ (3) $ 179
Beginning balance (in shares) at Dec. 31, 2018   40      
Cumulative-effect of change in accounting principle 0   1 (1)  
Total comprehensive income (loss) available (attributable) to common shareholder (1,103)   (1,109)   6
Capital contribution from parent 675 $ 675      
Dividend to parent (20)   (20)    
Ending balance at Mar. 31, 2019 3,867 $ 3,535 151 (4) 185
Ending balance (in shares) at Mar. 31, 2019   40      
Beginning balance at Dec. 31, 2019 3,892 $ 3,695 20 (3) 180
Beginning balance (in shares) at Dec. 31, 2019   40      
Total comprehensive income (loss) available (attributable) to common shareholder 93   88   5
Ending balance at Mar. 31, 2020 $ 3,985 $ 3,695 $ 108 $ (3) $ 185
Ending balance (in shares) at Mar. 31, 2020   40      
v3.20.1
Summary of Significant Accounting Policies
 3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation and Variable Interest Entities

DESC has determined that it has a controlling financial interest in each of GENCO and Fuel Company (which are considered to be VIEs) and, accordingly, DESC's Consolidated Financial Statements include, after eliminating intercompany balances and transactions, the accounts of DESC, GENCO and Fuel Company. See Note 1 to the Consolidated Financial Statements included in DESC’s Annual Report on Form 10-K for the year ended December 31, 2019 for a description of GENCO and Fuel Company.

Additionally, DESC purchases shared services from DESS, an affiliated VIE that provides accounting, legal, finance and certain administrative and technical services to all SCANA subsidiaries, including DESC. DESC has determined that it is not the primary beneficiary of DESS as it does not have either the power to direct the activities that most significantly impact its economic performance or an obligation to absorb losses and benefits which could be significant to it. See Note 12 for amounts attributable to affiliates.

Significant Accounting Policies

There have been no significant changes from Note 2 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2019.
v3.20.1
Rate and Other Regulatory Matters
 3 Months Ended
Mar. 31, 2020
Regulated Operations [Abstract]  
Rate and Other Regulatory Matters

2. RATE AND OTHER REGULATORY MATTERS

 

Regulatory Matters Involving Potential Loss Contingencies

As a result of issues generated in the ordinary course of business, DESC is involved in various regulatory matters. Certain regulatory matters may ultimately result in a loss; however, as such matters are in an initial procedural phase, involve uncertainty as to the outcome of pending reviews or orders, and/or involve significant factual issues that need to be resolved, it is not possible for DESC to estimate a range of possible loss. For regulatory matters that DESC cannot estimate, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the regulatory process such that DESC is able to estimate a range of possible loss. For regulatory matters that DESC is able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any estimated range is based on currently available information, involves elements of judgment and significant uncertainties and may not represent DESC’s maximum possible loss exposure. The circumstances of such regulatory matters will change from time to time and actual results may vary significantly from the current estimate. For current matters not specifically reported below, management does not anticipate that the outcome from such matters would have a material effect on DESC’s financial position, liquidity or results of operations.

 

2017 Tax Reform Act

 

In January 2020, GENCO filed to modify its formula rate to incorporate a mechanism to decrease or increase its income tax allowances by any excess deferred income taxes resulting from the 2017 Tax Reform Act, and future changes in tax laws. These modifications are expected to decrease charges to DESC for the power it purchases from GENCO.  In April 2020, the FERC approved GENCO’s request. There have been no other changes to the 2017 Tax Reform Act matters discussed in Note 3 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, 2019.

Other Regulatory Matters

Other than the following matters, there have been no significant developments regarding the pending regulatory matters disclosed in Note 3 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2019.

 

 

South Carolina Base Rate Case

 

Pursuant to the SCANA Merger Approval Order, DESC will not file an application for a general rate case with the South Carolina Commission with a requested effective date for new rates earlier than January 2021.  In April 2020, the South Carolina Commission issued an order vacating the portion of the SCANA Merger Approval Order requiring that new retail electric rates be implemented by January 1, 2021.

 

Electric – Cost of Fuel

 

In February 2020, DESC filed with the South Carolina Commission a proposal to decrease the total fuel cost component of retail electric rates. DESC’s proposed decrease would reduce annual base fuel component recoveries by $44 million and is projected to return to customers the existing over-collected balance while recovering DESC’s current base fuel costs over the 12-month period beginning with the first billing cycle of May 2020. In addition, DESC proposed an increase to its variable environmental and distributed energy resource components. In April 2020, the South Carolina Commission approved the filing.

 

Electric – Other

 

DESC has approval for a DSM rider through which it recovers expenditures related to its DSM programs. In January 2020, DESC submitted its annual DSM programs filing to the South Carolina Commission seeking approval to recover $40 million of costs and net lost revenues associated with DSM programs, along with an incentive to invest in such programs. In April 2020, the South Carolina Commission approved the filing.

 

DESC utilizes a pension costs rider approved by the South Carolina Commission which is designed to allow recovery of projected pension costs, including under-collected balances or net of over-collected balances, as applicable. The rider is typically reviewed for adjustment every 12 months with any resulting increase or decrease going into effect beginning with the first billing cycle in May. In February 2020, DESC requested that the South Carolina Commission approve an adjustment to this rider to decrease annual revenue by $11 million. In April 2020, the South Carolina Commission approved the filing. 

 

Regulatory Assets and Regulatory Liabilities

Rate-regulated utilities recognize in their financial statements certain revenues and expenses in different periods than do other enterprises. As a result, DESC has recorded regulatory assets and regulatory liabilities which are summarized in the following table. Except for NND Project costs and certain other unrecovered plant costs, substantially all regulatory assets are either explicitly excluded from rate base or are effectively excluded from rate base due to their being offset by related liabilities.

 

 

 

March 31,

 

 

December 31,

 

(millions)

 

2020

 

 

2019

 

Regulatory assets:

 

 

 

 

 

 

 

 

NND Project costs(1)

 

$

138

 

 

$

138

 

Deferred employee benefit plan costs(2)

 

 

13

 

 

 

13

 

Other unrecovered plant(3)

 

 

14

 

 

 

14

 

DSM programs(4)

 

 

16

 

 

 

17

 

AROs(5)

 

 

28

 

 

 

28

 

Cost of fuel under-collections(6)

 

 

3

 

 

 

13

 

Other

 

 

48

 

 

 

48

 

Regulatory assets - current

 

 

260

 

 

 

271

 

NND Project costs(1)

 

 

2,468

 

 

 

2,503

 

AROs(5)

 

 

305

 

 

 

293

 

Cost of reacquired debt(7)

 

 

255

 

 

 

259

 

Deferred employee benefit plan costs(2)

 

 

194

 

 

 

196

 

Deferred losses on interest rate derivatives(8)

 

 

318

 

 

 

305

 

Other unrecovered plant(3)

 

 

66

 

 

 

69

 

DSM programs(4)

 

 

58

 

 

 

54

 

Environmental remediation costs(9)

 

 

21

 

 

 

22

 

Deferred storm damage costs(10)

 

 

44

 

 

 

44

 

Deferred transmission operating costs(11)

 

 

43

 

 

 

37

 

Other(12)

 

 

101

 

 

 

110

 

Regulatory assets - noncurrent

 

 

3,873

 

 

 

3,892

 

Total regulatory assets

 

$

4,133

 

 

$

4,163

 

Regulatory liabilities:

 

 

 

 

 

 

 

 

Monetization of guaranty settlement(13)

 

$

67

 

 

$

67

 

Income taxes refundable through future rates(14)

 

 

20

 

 

 

16

 

Reserve for refunds to electric utility customers(15)

 

 

138

 

 

 

143

 

Cost of fuel over-collections(6)

 

 

37

 

 

 

12

 

Other

 

 

19

 

 

 

18

 

Regulatory liabilities - current

 

 

281

 

 

 

256

 

Monetization of guaranty settlement(13)

 

 

953

 

 

 

970

 

Income taxes refundable through future rates(14)

 

 

938

 

 

 

948

 

Asset removal costs(16)

 

 

558

 

 

 

552

 

Deferred gains on interest rate derivatives(8)

 

 

71

 

 

 

71

 

Reserve for refunds to electric utility customers(15)

 

 

623

 

 

 

656

 

Other

 

 

8

 

 

 

13

 

Regulatory liabilities - noncurrent

 

 

3,151

 

 

 

3,210

 

Total regulatory liabilities

 

$

3,432

 

 

$

3,466

 

 

(1)

Reflects expenditures associated with the NND Project, which pursuant to the SCANA Merger Approval Order, will be recovered from electric service customers over a 20-year period ending in 2039. See Note 10 for more information.

(2)

Employee benefit plan costs have historically been recovered as they have been recorded under GAAP. Deferred employee benefit plan costs represent amounts of pension and other postretirement benefit costs which were accrued as liabilities and treated as regulatory assets pursuant to FERC guidance, and costs deferred pursuant to specific South Carolina Commission regulatory orders. DESC expects to recover deferred pension costs through utility rates over periods through 2044. DESC expects to recover other deferred benefit costs through utility rates, primarily over average service periods of participating employees up to 11 years.

(3)

Represents the carrying value of coal-fired generating units, including related materials and supplies inventory, retired from service prior to being fully depreciated. DESC is amortizing these amounts through cost of service rates over the units' previous estimated remaining useful lives through 2025. Unamortized amounts are included in rate base and are earning a current return.

(4)

Represents deferred costs associated with electric demand reduction programs, and such deferred costs are currently being recovered over five years through an approved rate rider.

(5)

Represents deferred depreciation and accretion expense related to legal obligations associated with the future retirement of generation, transmission and distribution properties. The AROs primarily relate to DESC’s electric generating facilities, including Summer, and are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 105 years.

(6)

Represents amounts under- or over-collected from customers pursuant to the cost of fuel and purchased gas components approved by the South Carolina Commission.

(7)

Costs of the reacquisition of debt are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt or over the life of the replacement debt if refinanced. The reacquired debt had a weighted-average life of approximately 26 years as of March 31, 2020.

(8)

Represents (i) the changes in fair value and payments made or received upon settlement of certain interest rate derivatives designated as cash flow hedges and (ii) the changes in fair value and payments made or received upon settlement of certain other interest rate derivatives not so designated. The amounts recorded with respect to (i) are expected to be amortized to interest expense over the lives of the underlying debt through 2043.The amounts recorded with respect to (ii) are expected to be similarly amortized to interest expense through 2065.

(9)

Reflects amounts associated with the assessment and clean-up of sites currently or formerly owned by DESC. Such remediation costs are expected to be recovered over periods of up to 16 years. See Note 10 for more information.

(10)

Represents storm restoration costs for which DESC expects to receive future recovery through customer rates.

(11)

Includes deferred depreciation and property taxes associated with certain transmission assets for which DESC expects recovery from customers through future rates. See Note 10 for more information.

(12)

Various other regulatory assets are expected to be recovered through rates over varying periods through 2047.

(13)

Represents proceeds related to the monetization of the Toshiba Settlement. In accordance with the SCANA Merger Approval Order, this balance, net of amounts that may be required to satisfy liens, will be refunded to electric customers over a 20-year period ending in 2039. See Note 10 for more information.

(14)

Includes (i) excess deferred income taxes arising from the remeasurement of deferred income taxes in connection with the enactment of the 2017 Tax Reform Act (certain of which are protected under normalization rules and will be amortized over the remaining lives of related property, and certain of which will be amortized to the benefit of customers over prescribed periods as instructed by regulators) and (ii) deferred income taxes arising from investment tax credits, offset by (iii) deferred income taxes that arise from utility operations that have not been included in customer rates (a portion of which relate to depreciation and are expected to be recovered over the remaining lives of the related property which may range up to 85 years). See Note 6 for more information.

(15)

Reflects amounts previously collected from retail electric customers of DESC for the NND Project to be credited to customers over an estimated 11-year period (effective February 2019) in connection with the SCANA Merger Approval Order. See Note 10 for more information.

(16)

Represents estimated net collections through depreciation rates of amounts to be expended for the removal of assets in the future.

 

Regulatory assets have been recorded based on the probability of their recovery. All regulatory assets represent incurred costs that may be deferred under GAAP for regulated operations. The South Carolina Commission or the FERC has reviewed and approved through specific orders certain of the items shown as regulatory assets. In addition, regulatory assets include, but are not limited to, certain costs which have not been specifically approved for recovery by one of these regulatory agencies, including deferred transmission operating costs that are the subject of regulatory proceedings discussed in Note 10. While such costs are not currently being recovered, management believes they would be allowable under existing rate-making concepts embodied in rate orders or applicable state law and expects to recover these costs through rates in future periods.
v3.20.1
Revenue Recognition
 3 Months Ended
Mar. 31, 2020
Revenue From Contract With Customer [Abstract]  
Revenue Recognition

3. REVENUE RECOGNITION

DESC has disaggregated operating revenues by customer class as follows:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2020

 

 

March 31, 2019

 

(millions)

 

Electric

 

 

Gas

 

 

Electric

 

 

Gas

 

Customer class:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

$

252

 

 

$

79

 

 

$

(271

)

 

$

78

 

Commercial

 

 

175

 

 

 

33

 

 

 

(139

)

 

 

38

 

Industrial

 

 

80

 

 

 

17

 

 

 

(82

)

 

 

26

 

Other

 

 

30

 

 

 

4

 

 

 

10

 

 

 

3

 

Revenues from contracts with

   customers

 

 

537

 

 

 

133

 

 

 

(482

)

 

 

145

 

Other revenues

 

 

2

 

 

 

—

 

 

 

2

 

 

 

—

 

Total Operating Revenues

 

$

539

 

 

$

133

 

 

$

(480

)

 

$

145

 

 

Contract liabilities represent the obligation to transfer goods or services to a customer for which consideration has already been received from the customer. DESC had contract liability balances of $4 million and $9 million at March 31, 2020 and December 31, 2019, respectively. During the three months ended March 31, 2020 and 2019, DESC recognized revenue of $5 million and $2 million, respectively, from the beginning contract liability balances as DESC fulfilled its obligations to provide service to its customers. Contract liabilities are recorded in customer deposits and customer prepayments in the Consolidated Balance Sheets.
v3.20.1
Equity
 3 Months Ended
Mar. 31, 2020
Equity [Abstract]  
Equity

4. EQUITY

For all periods presented, DESC's authorized shares of common stock, no par value, were 50 million, of which 40.3 million were issued and outstanding, and DESC's authorized shares of preferred stock, no par value, were 20 million, of which 1,000 shares were issued and outstanding. All outstanding shares of common and preferred stock are held by SCANA.

In February 2019, DESC received an equity contribution of $675 million from its parent that was funded by Dominion Energy. DESC used these funds to redeem long-term debt. See Note 6 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, 2019.

At March 31, 2020, DESC’s retained earnings are below the balance established by the Federal Power Act as a reserve on earnings attributable to hydroelectric generation plants. As a result, DESC is prohibited from the payment of dividends without regulatory approval until the balance of its retained earnings increases. There have been no significant changes to dividend restrictions affecting DESC described in Note 5 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, 2019.
v3.20.1
Long-Term and Short-Term Debt
 3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Long-Term and Short-Term Debt

5. LONG-TERM AND SHORT-TERM DEBT

DESC's short-term financing is supported through its access as co-borrower to Dominion Energy’s $6.0 billion joint revolving credit facility, which can be used for working capital, as support for the combined commercial paper programs of DESC, Dominion Energy, Virginia Power, Dominion Energy Gas and Questar Gas, and for other general corporate purposes.

At March 31, 2020, DESC's share of commercial paper and letters of credit outstanding under its joint credit facility with Dominion Energy, was as follows:

 

(millions)

 

Facility Limit

 

 

Outstanding

Commercial Paper

 

 

Outstanding

Letters of Credit

 

Joint revolving credit facility(1)

 

$

1,000

 

 

$

—

 

 

$

—

 

 

(1)

A maximum of $1.0 billion of the facility is available to DESC, assuming adequate capacity is available after giving effect to uses by co-borrowers Dominion Energy, Virginia Power, Dominion Energy Gas and Questar Gas. The sub-limit for DESC is set within the facility limit but can be changed at the option of the co-borrowers multiple times per year. At March 31, 2020, the sub-limit for DESC was $500 million. If DESC has liquidity needs in excess of its sub-limit, the sub-limit may be changed or such needs may be satisfied through short-term borrowings from DESC's parent or from Dominion Energy. This credit facility matures in March 2023 and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.0 billion (or the sub-limit, whichever is less) of letters of credit.

In January 2020, DESC and GENCO applied to FERC for a two-year short-term borrowing authorization. In March 2020, FERC granted DESC authority through March 2021 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 2020, FERC granted GENCO authority through March 2021 to issue short-term indebtedness not to exceed $200 million outstanding with maturity dates of one year or less.

DESC is obligated with respect to an aggregate of $68 million of industrial revenue bonds which are secured by letters of credit. These letters of credit expire, subject to renewal, in the fourth quarter of 2020.

DESC received FERC approval to enter into an inter-company credit agreement in April 2019 with Dominion Energy under which DESC may have short-term borrowings outstanding up to $900 million. At March 31, 2020, DESC had borrowings outstanding under this credit agreement totaling $486 million, which are recorded in affiliated and related party payables in DESC’s Consolidated Balance Sheets. For the three months ended March 31, 2020, DESC recorded interest charges of $2 million.

DESC participated in a utility money pool with SCANA and another regulated subsidiary of SCANA through April 2019. Fuel Company and GENCO remain in the utility money pool. Money pool borrowings and investments bear interest at short-term market rates. For the three months ended March 31, 2020, DESC recorded interest income from money pool transactions of $1 million, and for the same period DESC recorded interest expense from money pool transactions of $1 million. For the three months ended March 31, 2019, DESC recorded interest income from money pool transactions of $3 million, and for the same period DESC recorded interest expense from money pool transactions of $3 million. Fuel Company had outstanding money pool borrowings due to an affiliate of $239 million and GENCO had investments due from an affiliate of $3 million at March 31, 2020. At December 31, 2019, Fuel Company had outstanding money pool borrowings due to an affiliate of $219 million and GENCO had investments due from an affiliate of $9 million. On its Consolidated Balance Sheets, DESC includes money pool borrowings within affiliated and related party payables and money pool investments within affiliated and related party receivables.
v3.20.1
Income Taxes
 3 Months Ended
Mar. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes

6. INCOME TAXES

DESC has recorded an estimate of excess deferred income tax amortization in 2020. The reversal of these excess deferred income taxes will impact the effective tax rate and rates charged to customers. See Note 3 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, 2019 for more information.

 

DESC’s effective tax rate for the three months ended March 31, 2020 is 19.9% compared to 9.7% for the three months ended March 31, 2019. Variances in the effective tax rate are primarily driven by charges resulting from the SCANA Combination. In connection with the SCANA Merger Approval Order, Dominion Energy committed to forgo, or limit, the recovery of certain income tax-related regulatory assets associated with the NND Project. DESC's 2019 effective tax rate reflects income tax expense of $198 million in satisfaction of this commitment. Also in the first quarter 2019, DESC’s unrecognized tax benefits increased by $51 million and income tax expense increased by $40 million related to a state income tax position taken in prior years.

 

In March 2020, the CARES Act was enacted which includes several significant business tax provisions that modify or temporarily suspend certain provisions of the 2017 Tax Reform Act. The CARES Act provisions are intended to improve cash flow and liquidity by, among other things, providing a temporary five-year carryback for certain net operating losses, accelerating the refund of previously generated corporate alternative minimum tax credits, and temporarily loosening the business interest limitation to 50% of adjusted taxable income for certain businesses. While DESC intends to utilize the income tax provisions of the CARES Act to accelerate the recognition of certain tax attributes, where applicable, they are not expected to provide a material benefit.

As of March 31, 2020, there have been no other material changes in DESC’s unrecognized tax benefits. See Note 7 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2019 for a discussion of these unrecognized tax benefits.
v3.20.1
Derivative Financial Instruments
 3 Months Ended
Mar. 31, 2020
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments

7. DERIVATIVE FINANCIAL INSTRUMENTS

DESC’s accounting policies, objectives, and strategies for using derivative instruments are discussed in Note 2 in the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, 2019. See Note 8 for further information about fair value measurements and associated valuation methods for derivatives.

Derivative assets and liabilities are presented gross on the Consolidated Balance Sheets. DESC’s derivative contracts include over-the-counter transactions. Over-the-counter contracts are bilateral contracts that are transacted directly with a third party. Certain over-the-counter contain contractual rights of setoff through master netting arrangements and contract default provisions. In addition, the contracts are subject to conditional rights of setoff through counterparty nonperformance, insolvency, or other conditions.

In general, most over-the-counter transactions are subject to collateral requirements. Types of collateral for over-the-counter contracts include cash, letters of credit, and, in some cases, other forms of security, none of which are subject to restrictions. Cash collateral is used in the table below to offset derivative assets and liabilities.

All of DESC’s derivative instruments contain credit-related contingent provisions. These provisions require DESC to provide collateral upon the occurrence of specific events, primarily a credit rating downgrade. If the credit-related contingent features underlying the instruments that are in a liability position and not fully collateralized with cash were fully triggered as of March 31, 2020, DESC would have been required to post $10 million of additional collateral to its counterparties. The collateral that would be required to be posted includes the impacts of any amounts already posted for derivatives per contractual terms. DESC had posted $4 million of collateral at March 31, 2020 related to derivatives with credit-related contingent provisions that are in a liability position and not fully collateralized with cash. The aggregate fair value of all derivative instruments with credit-related contingent provisions that are in a liability position and not fully collateralized with cash was $14 million at March 31, 2020. DESC’s derivatives with credit related contingent provisions that were in a liability position were fully collateralized with cash at December 31,2019.

The table below presents derivative balances by type of financial instrument, if the gross amounts recognized in the Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid:

 

 

 

March 31, 2020

 

 

December 31, 2019

 

 

 

Gross Amounts Not Offset in the Consolidated

Balance Sheet

 

 

Gross Amounts Not Offset in the Consolidated

Balance Sheet

 

(millions)

 

Gross

Liabilities

Presented in the

Consolidated

Balance Sheet

 

 

Financial

Instruments

 

 

Cash

Collateral

Paid

 

 

Net

Amounts

 

 

Gross

Liabilities

Presented in the

Consolidated

Balance Sheet

 

 

Financial

Instruments

 

 

Cash

Collateral

Paid

 

 

Net

Amounts

 

Interest rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

$

33

 

 

$

—

 

 

$

23

 

 

$

10

 

 

$

19

 

 

$

—

 

 

$

19

 

 

$

—

 

Total derivatives

 

$

33

 

 

$

—

 

 

$

23

 

 

$

10

 

 

$

19

 

 

$

—

 

 

$

19

 

 

$

—

 

 

Volumes

The following table presents the volume of derivative activity at March 31, 2020. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions.

 

 

 

Current

 

 

Noncurrent

 

Interest rate(1)

 

$

—

 

 

$

71,400,000

 

 

(1)

Maturity is determined based on final settlement period.

Fair Value and Gains and Losses on Derivative Instruments

The following tables present the fair values of derivatives and where they are presented in the Consolidated Balance Sheets:

 

(millions)

 

Fair Value -

Derivatives

under Hedge

Accounting

 

 

Fair Value -

Derivatives not

under Hedge

Accounting

 

 

Total Fair Value

 

At March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

$

1

 

 

$

1

 

 

$

2

 

Total current derivative liabilities(1)

 

 

1

 

 

 

1

 

 

 

2

 

Noncurrent Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

18

 

 

 

13

 

 

 

31

 

Total noncurrent derivative liabilities(2)

 

 

18

 

 

 

13

 

 

 

31

 

Total derivative liabilities

 

$

19

 

 

$

14

 

 

$

33

 

At December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

$

1

 

 

$

1

 

 

$

2

 

Total current derivative liabilities(1)

 

 

1

 

 

 

1

 

 

 

2

 

Noncurrent Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

11

 

 

 

6

 

 

 

17

 

Total noncurrent derivative liabilities(2)

 

 

11

 

 

 

6

 

 

 

17

 

Total derivative liabilities

 

$

12

 

 

$

7

 

 

$

19

 

 

(1)

Current derivative liabilities are presented in other current liabilities in the Consolidated Balance Sheets.

(2)

Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in the Consolidated Balance Sheets.

The following tables present the gains and losses on derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Comprehensive Income (Loss):

Derivatives in Cash Flow Hedging Relationships

 

(millions)

 

Gain (loss)

Reclassified from

Deferred Accounts

into Income

 

 

Increase (Decrease)

in Derivatives

Subject to

Regulatory

Treatment(1)

 

Three Months Ended March 31, 2020

 

 

 

 

 

 

 

 

Derivative type and location of gains (losses):

 

 

 

 

 

 

 

 

Interest rate(2)

 

$

—

 

 

$

(6

)

Total

 

$

—

 

 

$

(6

)

Three Months Ended March 31, 2019

 

 

 

 

 

 

 

 

Derivative type and location of gains (losses):

 

 

 

 

 

 

 

 

Interest rate(2)

 

$

—

 

 

$

(2

)

Total

 

$

—

 

 

$

(2

)

 

(1)

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 Consolidated Statements of Comprehensive Income (Loss).

(2)

Amounts recorded in DESC’s Consolidated Statements of Comprehensive Income (Loss) are classified in interest charges.

 

 

  

 
v3.20.1
Fair Value Measurements, Including Derivatives
 3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements, Including Derivatives

8. FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES

DESC’s fair value measurements are made in accordance with the policies discussed in Note 9 to the Consolidated Financial Statements in DESC’s Annual Report on Form 10-K for the year ended December 31, 2019. See Note 7 in this report for further information about the DESC’s derivatives and hedge accounting activities.

Recurring Fair Value Measurements

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

 

(millions)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

At March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

$

—

 

 

$

33

 

 

$

—

 

 

$

33

 

Total liabilities

 

$

—

 

 

$

33

 

 

$

—

 

 

$

33

 

At December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

$

—

 

 

$

19

 

 

$

—

 

 

$

19

 

Total liabilities

 

$

—

 

 

$

19

 

 

$

—

 

 

$

19

 

 

Fair Value of Financial Instruments

Substantially all of DESC’s financial instruments are recorded at fair value, with the exception of the instruments described below, which are reported at historical cost. Estimated fair values have been determined using available market information and valuation methodologies considered appropriate by management. The carrying amount of financial instruments classified within current assets and current liabilities are representative of fair value because of the short-term nature of these instruments. For financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:

 

 

 

March 31, 2020

 

 

December 31, 2019

 

(millions)

 

Carrying

Amount

 

 

Estimated

Fair Value(1)

 

 

Carrying

Amount

 

 

Estimated

Fair Value(1)

 

Long-term debt(2)

 

$

3,359

 

 

$

4,060

 

 

$

3,358

 

 

$

4,262

 

Affiliated long-term debt

 

 

230

 

 

 

230

 

 

 

230

 

 

 

230

 

 

(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 and discount or premium.
v3.20.1
Employee Benefit Plans
 3 Months Ended
Mar. 31, 2020
Compensation And Retirement Disclosure [Abstract]  
Employee Benefit Plans

9. EMPLOYEE BENEFIT PLANS

Components of net periodic benefit cost recorded by DESC were as follows:

 

(millions)

 

Pension Benefits

 

 

Other Postretirement Benefits

 

Three Months Ended March 31,

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Service cost

 

$

3

 

 

$

4

 

 

$

1

 

 

$

1

 

Interest cost

 

 

6

 

 

 

8

 

 

 

2

 

 

 

2

 

Expected return on assets

 

 

(11

)

 

 

(10

)

 

 

—

 

 

 

—

 

Amortization of actuarial losses

 

 

2

 

 

 

4

 

 

 

—

 

 

 

—

 

Net periodic benefit cost

 

$

—

 

 

$

6

 

 

$

3

 

 

$

3

 

 

No significant contribution to the pension trust is expected for the remainder of 2020 based on current market conditions and assumptions, nor is a limitation on benefit payments expected to apply. DESC recovers current pension costs through either a rate rider that may be adjusted annually for retail electric operations or through cost of service rates for gas operations.
v3.20.1
Commitments And Contingencies
 3 Months Ended
Mar. 31, 2020
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

10. COMMITMENTS AND CONTINGENCIES

As a result of issues generated in the ordinary course of business, DESC is involved in legal proceedings before various courts and is periodically subject to governmental examinations (including by regulatory authorities), inquiries and investigations. Certain legal proceedings and governmental examinations involve demands for unspecified amounts of damages, are in an initial procedural phase, involve uncertainty as to the outcome of pending appeals or motions, or involve significant factual issues that need to be resolved, such that it is not possible for DESC to estimate a range of possible loss. For such matters that DESC cannot estimate, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the litigation or investigative processes such that DESC is able to estimate a range of possible loss. For legal proceedings and governmental examinations that DESC is able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any accrued liability is recorded on a gross basis with a receivable also recorded for any probable insurance recoveries. Estimated ranges of loss are inclusive of legal fees and net of any anticipated insurance recoveries. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent DESC’s maximum possible loss exposure. The circumstances of such legal proceedings and governmental examinations will change from time to time and actual results may vary significantly from the current estimate. For current proceedings not specifically reported below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on DESC’s financial position, liquidity or results of operations.

Environmental Matters

DESC is subject to costs resulting from a number of federal, state and local laws and regulations designed to protect human health and the environment. These laws and regulations affect future planning and existing operations. They can result in increased capital, operating and other costs as a result of compliance, remediation, containment and monitoring obligations.

From a regulatory perspective, DESC and GENCO continually monitor and evaluate their current and projected emission levels and strive to comply with all state and federal regulations regarding those emissions. DESC and GENCO participate in the SO2 and NOX emission allowance programs with respect to coal plant emissions and also have constructed additional pollution control equipment at their coal-fired electric generating plants. These actions are expected to address many of the rules and regulations discussed herein.

Air

CAA

The CAA, as amended, is a comprehensive program utilizing a broad range of regulatory tools to protect and preserve the nation's air quality. At a minimum, states are required to establish regulatory programs to address all requirements of the CAA. However, states may choose to develop regulatory programs that are more restrictive. Many of DESC’s facilities are subject to the CAA’s permitting and other requirements.

 

MATS

In February 2019, the EPA published a proposed rule to reverse its previous finding that it is appropriate and necessary to regulate hazardous air pollutant emissions from coal- and oil-fired electric generating units. In April 2020, the EPA finalized its reconsideration and issued a final rule. The final rule is consistent with the EPA’s February 2019 proposal, and determines that it is not appropriate and necessary to regulate mercury and hazardous air pollutant emissions from coal- and oil-fired electric generating units. The final rule also states that the MATS rule remains in place and the emissions standards for affected coal- and oil-fired electric generating units will not change. The effective date of the action will be 60 days after publication in the Federal Register.  DESC is complying with the applicable requirements of the rule and does not expect any impacts to its operations.

 

Ozone Standards

The EPA published final non-attainment designations for the October 2015 ozone standard in June 2018. States have until August 2021 to develop plans to address the new standard. Until the states have developed implementation plans for the standard, DESC is unable to predict whether or to what extent the new rules will ultimately require additional controls. The expenditures required to implement additional controls could have a material impact on DESC’s results of operations and cash flows.

 

ACE Rule

In July 2019, the EPA published the final rule informally referred to as the ACE Rule, as a replacement for the Clean Power Plan. The ACE Rule applies to existing coal-fired power plants. The final rule includes unit-specific performance standards based on the degree of emission reduction levels achievable from unit efficiency improvements to be determined by the permitting agency. The ACE Rule requires states to develop plans by July 2022 to implement these performance standards. These state plans must be approved by the EPA by January 2024. While the impacts of this rule could be material to DESC’s results of operations, financial condition and/or cash flows, the existing regulatory framework in South Carolina provides rate recovery mechanisms that could substantially mitigate any such impacts for DESC.

 

Carbon Regulations

In August 2016, the EPA issued a draft rule proposing to reaffirm that a source’s obligation to obtain a PSD or Title V permit for GHGs is triggered only if such permitting requirements are first triggered by non-GHG, or conventional, pollutants that are regulated by the New Source Review program, and to set a significant emissions rate at 75,000 tons per year of CO2 equivalent emissions under which a source would not be required to apply BACT for its GHG emissions. Until the EPA ultimately takes final action on this rulemaking, DESC cannot predict the impact to its results of operations, financial condition and/or cash flows.

In December 2018, the EPA proposed revised Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources. The proposed rule would amend the previous determination that the best system of emission reduction for newly constructed coal-fired steam generating units is no longer partial carbon capture and storage. Instead, the proposed revised best system of emission reduction for this source category is the most efficient demonstrated steam cycle (e.g., supercritical steam conditions for large units and subcritical steam conditions for small units) in combination with the best operating practices.

 

Oil and Gas NSPS

In August 2012, the EPA issued an NSPS impacting new and modified facilities in the natural gas production and gathering sectors and made revisions to the NSPS for natural gas processing and transmission facilities. These rules establish equipment performance specifications and emissions standards for control of VOC emissions for natural gas production wells, tanks, pneumatic controllers, and compressors in the upstream sector. In June 2016, the EPA issued another NSPS regulation, for the oil and natural gas sector, to regulate methane and VOC emissions from new and modified facilities in transmission and storage, gathering and boosting, production and processing facilities. All projects which commenced construction after September 2015 are required to comply with this regulation. In October 2018, the EPA published a proposed rule reconsidering and amending portions of the 2016 rule, including but not limited to, the fugitive emissions requirements at well sites and compressor stations. The amended portions of the 2016 rule were effective immediately upon publication. Until the proposed rule regarding reconsideration is final, DESC is implementing the 2016 regulation. DESC is still evaluating whether potential impacts on results of operations, financial condition and/or cash flows related to this matter will be material.

Water

The CWA, as amended, is a comprehensive program requiring a broad range of regulatory tools including a permit program to authorize and regulate discharges to surface waters with strong enforcement mechanisms. DESC must comply with applicable aspects of the CWA programs at its operating facilities.

Regulation 316(b)

 

In October 2014, the final regulations under Section 316(b) of the CWA that govern existing facilities and new units at existing facilities that employ a cooling water intake structure and that have flow levels exceeding a minimum threshold became effective. The rule establishes a national standard for impingement based on seven compliance options, but forgoes the creation of a single technology standard for entrainment. Instead, the EPA has delegated entrainment technology decisions to state regulators. State regulators are to make case-by-case entrainment technology determinations after an examination of five mandatory facility-specific factors, including a social cost-benefit test, and six optional facility-specific factors. The rule governs all electric generating stations with water withdrawals above two MGD, with a heightened entrainment analysis for those facilities over 125 MGD. DESC has five facilities that are subject to the final regulations. DESC is also working with the EPA and state regulatory agencies to assess the applicability of Section 316(b) to five hydroelectric facilities. DESC anticipates that it may have to install impingement control technologies at certain of these stations that have once-through cooling systems. DESC is currently evaluating the need or potential for entrainment controls under the final rule as these decisions will be made on a case-by-case basis after a thorough review of detailed biological, technology, cost and benefit studies. DESC is conducting studies and implementing plans as required by the rule to determine appropriate intake structure modifications at certain facilities to ensure compliance with this rule. While the impacts of this rule could be material to DESC’s results of operations, financial condition and/or cash flows, the existing regulatory framework in South Carolina provides rate recovery mechanisms that could substantially mitigate any such impacts for DESC.

 

Effluent Limitations Guidelines

 

In September 2015, the EPA released a final rule to revise the ELG Rule. The final rule establishes updated standards for wastewater discharges that apply primarily at coal and oil steam generating stations. Affected facilities are required to convert from wet to dry or closed cycle coal ash management, improve existing wastewater treatment systems and/or install new wastewater treatment technologies in order to meet the new discharge limits. In April 2017, the EPA granted two separate petitions for reconsideration of the final ELG Rule and stayed future compliance dates in the rule. Also in April 2017, the U.S. Court of Appeals for the Fifth Circuit granted the EPA’s request for a stay of the pending consolidated litigation challenging the rule while the EPA addresses the petitions for reconsideration. In September 2017, the EPA signed a rule to postpone the earliest compliance dates for certain waste streams regulations in the final ELG Rule from November 2018 to November 2020; however, the latest date for compliance for these regulations remains December 2023. While the impacts of this rule could be material to DESC’s results of operations, financial condition and/or cash flows, as DESC expects that wastewater treatment technology retrofits will be required at Williams and Wateree generating stations, the existing regulatory framework in South Carolina provides rate recovery mechanisms that could substantially mitigate any such impacts for DESC.

In December 2019, the EPA released proposed revisions to the ELG Rule that, if adopted, could extend the deadlines for compliance with certain standards at several facilities. While the impacts of this rule could be material to DESC’s results of operations, financial condition and/or cash flows, the existing regulatory frameworks in South Carolina provide rate recovery mechanisms that could substantially mitigate any such impacts for the regulated electric utilities.

 

Waste Management and Remediation

 

The operations of DESC are subject to a variety of state and federal laws and regulations governing the management and disposal of solid and hazardous waste, and release of hazardous substances associated with current and/or historical operations. The CERCLA, as amended, and similar state laws, may impose joint, several and strict liability for cleanup on potentially responsible parties who owned, operated or arranged for disposal at facilities affected by a release of hazardous substances. In addition, many states have created programs to incentivize voluntary remediation of sites where historical releases of hazardous substances are identified and property owners or responsible parties decide to initiate cleanups.

 

From time to time, DESC may be identified as a potentially responsible party in connection with the alleged release of hazardous substances or wastes at a site. Under applicable federal and state laws, DESC could be responsible for costs associated with the investigation or remediation of impacted sites, or subject to contribution claims by other responsible parties for their costs incurred at such sites. DESC also may identify, evaluate and remediate other potentially impacted sites under voluntary state programs. Remediation costs may be subject to reimbursement under DESC’s insurance policies, rate recovery mechanisms, or both. Except as described below, DESC does not believe these matters will have a material effect on results of operations, financial condition and/or cash flows.

 

DESC has four decommissioned MGP sites in South Carolina that are in various states of investigation, remediation and monitoring under work plans approved by, or under review by, the SCDHEC or the EPA. DESC anticipates that activities at these sites will continue through 2025 at an estimated cost of $10 million. In September 2018, DESC submitted an updated remediation work plan for one site to SCDHEC, which if approved, would increase costs by approximately $8 million. DESC expects to recover costs arising from the remediation work at all four sites through rate recovery mechanisms and as of March 31, 2020, deferred amounts, net of amounts previously recovered through rates and insurance settlements, totaled $23 million and are included in regulatory assets.

Ash Pond and Landfill Closure Costs

In April 2015, the EPA enacted a final rule regulating CCR landfills, existing ash ponds that still receive and manage CCRs, and inactive ash ponds that do not receive, but still store, CCRs. DESC currently has inactive and existing CCR ponds and CCR landfills subject to the final rule at 3 different facilities. This rule created a legal obligation for DESC to retrofit or close all of its inactive and existing ash ponds over a certain period of time, as well as perform required monitoring, corrective action, and post-closure care activities as necessary.

 

In December 2016, legislation was enacted that creates a framework for EPA- approved state CCR permit programs. In August 2017, the EPA issued interim guidance outlining the framework for state CCR program approval. The EPA has enforcement authority until state programs are approved. The EPA and states with approved programs both will have authority to enforce CCR requirements under their respective rules and programs. In September 2017, the EPA agreed to reconsider portions of the CCR rule in response to two petitions for reconsideration. In March 2018, the EPA proposed certain changes to the CCR rule related to issues remanded as part of the pending litigation and other issues the EPA is reconsidering. Several of the proposed changes would allow states with approved CCR permit programs additional flexibility in implementing their programs. In July 2018, the EPA promulgated the first phase of changes to the CCR rule. Until all phases of the CCR rule are promulgated, DESC cannot forecast potential incremental impacts or costs related to existing coal ash sites in connection with future implementation of the 2016 CCR legislation and reconsideration of the CCR rule. In August 2018, the U.S. Court of Appeals for the D.C. Circuit issued its decision in the pending challenges of the CCR rule, vacating and remanding to the EPA three provisions of the rule. Until regulatory action is taken to incorporate the U.S. Court of Appeals for the D.C. Circuit’s decision, DESC is unable to make an estimate of the potential financial statement impacts associated with any future changes to the CCR rule in connection with the court’s remand. 

 

Abandoned NND Project

A description of events and circumstances leading up to DESC's abandonment of the NND Project and subsequent regulatory, legislative, legal and investigative proceedings, as well as related impairments of NND Project and other costs are described in Note 12 in DESC's Annual Report on Form 10-K for the year ended December 31, 2019.

SCANA Merger Approval Order

In accordance with the terms of the South Carolina Commission's SCANA Merger Approval Order, DESC adopted the Plan-B Levelized Customer Benefits Plan, effective February 2019, whereby the average bill for a DESC residential electric customer approximates that which resulted from the legislatively-mandated temporary reduction that had been put into effect by the South Carolina Commission in August 2018. DESC also recorded a significant impairment charge in the fourth quarter of 2018, which charge resulted from its conclusion that NND Project capital costs exceeding the amount established in the SCANA Merger Approval Order were probable of loss, regardless of whether the SCANA Combination was completed. In addition, in the first quarter of 2019, DESC recorded the following charges and liabilities which arose from or are related to provisions in the SCANA Merger Approval Order.

•

A charge of $105 million ($79 million after-tax) related to certain assets that had been constructed in connection with the NND Project for which DESC committed to forgo recovery.

•

A regulatory liability for refunds and restitution of amounts previously collected from retail electric customers of $1.0 billion ($756 million after-tax), recorded as a reduction in operating revenue, which will be credited to customers over an estimated 11 years. In addition, a previously existing regulatory liability of $1.0 billion will be credited to customers over 20 years, which reflects amounts to be refunded to customers related to the monetization of guaranty settlement described in Note 2.

•

A regulatory liability for refunds to natural gas customers totaling $2 million ($2 million after-tax).

•

A tax charge of $198 million related to $264 million of regulatory assets for which DESC committed to forgo recovery.

Further, except for rate adjustments for fuel and environmental costs, DSM costs, and other rates routinely adjusted on an annual or biannual basis, DESC will freeze retail electric base rates at current levels until January 1, 2021. As discussed in Note 2, in April 2020, the South Carolina Commission issued an order vacating the portion of the SCANA Merger Approval Order requiring that new retail electric rates be implemented by January 1, 2021

The South Carolina Commission order also approved the removal of DESC's investment in certain transmission assets that have not been abandoned from BLRA capital costs. As of March 31, 2020, such investment in these assets included $345 million within utility plant, net and $43 million within regulatory assets, which amount represents certain deferred operating costs. The South Carolina Commission approved deferral of these operating costs related to the investment until recovery of the transmission capital costs and associated deferred operating costs is addressed in a future rate proceeding. DESC believes these transmission capital and deferred operating costs are probable of recovery; however, if the South Carolina Commission were to disallow recovery of or a reasonable return on all or a portion of them, an impairment charge equal to the disallowed costs may be required.

 

Claims and Litigation

The following describes certain legal proceedings involving DESC relating to events occurring before closing of the SCANA Combination. No reference to, or disclosure of, any proceeding, item or matter described below shall be construed as an admission or indication that such proceeding, item or matter is material. For certain of these matters, and unless otherwise noted therein, DESC is unable to estimate a reasonable range of possible loss and the related financial statement impacts, but for any such matter there could be a material impact to its results of operations, financial condition and/or cash flows. For the matters for which DESC is able to reasonably estimate a probable loss, the Consolidated Balance Sheets at both March 31, 2020 and December 31, 2019 include reserves of $492 million and insurance receivables of $6 million, included within other receivables. During the three months ended March 31, 2019, the Consolidated Statements of Comprehensive Income (Loss) includes charges of $166 million ($125 million after-tax), included within impairment of assets and other charges.

Ratepayer Class Actions

In May 2018, a consolidated complaint against DESC, SCANA and the State of South Carolina was filed in the State Court of Common Pleas in Hampton County, South Carolina (the DESC Ratepayer Case). In September 2018, the court certified this case as a class action. The plaintiffs allege, among other things, that DESC was negligent and unjustly enriched, breached alleged fiduciary and contractual duties and committed fraud and misrepresentation in failing to properly manage the NND Project, and that DESC committed unfair trade practices and violated state anti-trust laws. The plaintiffs sought a declaratory judgment that DESC may not charge its customers for any past or continuing costs of the NND Project, sought to have SCANA and DESC’s assets frozen and all monies recovered from Toshiba and other sources be placed in a constructive trust for the benefit of ratepayers and sought specific performance of the alleged implied contract to construct the NND Project.

In December 2018, the State Court of Common Pleas in Hampton County entered an order granting preliminary approval of a class action settlement and a stay of pre-trial proceedings in the DESC Ratepayer Case. The settlement agreement, contingent upon the closing of the SCANA Combination, provided that SCANA and DESC would establish an escrow account and proceeds from the escrow account would be distributed to the class members, after payment of certain taxes, attorneys' fees and other expenses and administrative costs. The escrow account would include (1) up to $2.0 billion, net of a credit of up to $2.0 billion in future electric bill relief, which would inure to the benefit of the escrow account in favor of class members over a period of time established by the South Carolina Commission in its order related to matters before the South Carolina Commission related to the NND Project, (2) a cash payment of $115 million and (3) the transfer of certain DESC-owned real estate or sales proceeds from the sale of such properties, which counsel for the DESC Ratepayer Class estimate to have an aggregate value between $60 million and $85 million. At the closing of the SCANA Combination, SCANA and DESC funded the cash payment portion of the escrow account. The court held a fairness hearing on the settlement in May 2019. In June 2019, the court entered an order granting final approval of the settlement, which order became effective July 2019. In July 2019, DESC transferred $117 million representing the cash payment, plus accrued interest, to the plaintiffs. In addition, property with a net recorded value of $42 million is in the process of being transferred to the plaintiffs in coordination with the court-appointed real estate trustee to satisfy the settlement agreement.

In September 2017, a purported class action was filed by Santee Cooper ratepayers against Santee Cooper, DESC, Palmetto Electric Cooperative, Inc. and Central Electric Power Cooperative, Inc. in the State Court of Common Pleas in Hampton County, South Carolina (the Santee Cooper Ratepayer Case). The allegations are substantially similar to those in the DESC Ratepayer Case. The plaintiffs seek a declaratory judgment that the defendants may not charge the purported class for reimbursement for past or future costs of the NND Project. In March 2018, the plaintiffs filed an amended complaint including as additional named defendants certain then current and former directors of Santee Cooper and SCANA. In June 2018, Santee Cooper filed a Notice of Petition for Original Jurisdiction with the Supreme Court of South Carolina which was denied. In December 2018, Santee Cooper filed its answer to the plaintiffs' fourth amended complaint and filed cross claims against DESC. In October 2019, Santee Cooper voluntarily consented to stay its cross claims against DESC pending the outcome of the trial of the underlying case. In November 2019, DESC removed the case to the U.S. District Court for the District of South Carolina. In December 2019, the plaintiffs and Santee Cooper filed a motion to remand the case to state court. In January 2020, the case was remanded to state court. In March 2020, the parties executed a settlement agreement relating to this matter as well as the Luquire Case and the Glibowski Case described below. The settlement agreement provides that Dominion Energy and Santee Cooper will establish a fund for the benefit of class members in the amount of $520 million, of which DESC’s portion is $320 million of shares of Dominion Energy common stock. Also in March 2020, the court granted preliminary approval for the settlement agreement. This case is pending.

In July 2019, a similar purported class action was filed by certain Santee Cooper ratepayers against DESC, SCANA, Dominion Energy and former directors and officers of SCANA in the State Court of Common Pleas in Orangeburg, South Carolina (the Luquire Case). In August 2019, DESC, SCANA and Dominion Energy were voluntarily dismissed from the case. The claims are similar to the Santee Cooper Ratepayer Case. In March 2020, the parties executed a settlement agreement as described above relating to this matter as well as the Santee Cooper Ratepayer Case and the Glibowski Case. This case is pending.

RICO Class Action

In January 2018, a purported class action was filed, and subsequently amended, against SCANA, DESC and certain former executive officers in the U.S. District Court for the District of South Carolina (the Glibowski Case). The plaintiff alleges, among other things, that SCANA, DESC and the individual defendants participated in an unlawful racketeering enterprise in violation of RICO and conspired to violate RICO by fraudulently inflating utility bills to generate unlawful proceeds. The DESC Ratepayer Class Action settlement described previously contemplates dismissal of claims by DESC ratepayers in this case against DESC, SCANA and their officers. In August 2019, the individual defendants filed motions to dismiss. In March 2020, the parties executed a settlement agreement as described above relating to this matter as well as the Santee Cooper Ratepayer Case and the Luquire Case. This case is pending.

SCANA Shareholder Litigation

In February 2018, a purported class action was filed against Dominion Energy and certain former directors of SCANA and DESC in the State Court of Common Pleas in Richland County, South Carolina (the Metzler Lawsuit). The plaintiff alleges, among other things, that defendants violated their fiduciary duties to shareholders by executing a merger agreement that would unfairly deprive plaintiffs of the true value of their SCANA stock, and that Dominion Energy aided and abetted these actions. Among other remedies, the plaintiff seeks to enjoin and/or rescind the merger. In February 2018, Dominion Energy removed the case to the U.S. District Court for the District of South Carolina and filed a Motion to Dismiss in March 2018. In August 2018, the case was remanded back to the State Court of Common Pleas in Richland County. Dominion Energy appealed the decision to remand to the U.S. Court of Appeals for the Fourth Circuit, where the appeal was consolidated with another lawsuit regarding the SCANA Merger Agreement to which DESC is not a party. In June 2019, the U.S. Court of Appeals for the Fourth Circuit reversed the order remanding the case to state court. In September 2019, the U.S. District Court for the District of South Carolina granted the plaintiffs’ motion to consolidate the Metzler Lawsuit with another lawsuit regarding the SCANA Merger Agreement to which DESC is not a party. In October 2019, the plaintiffs filed an amended complaint against certain former directors and executive officers of SCANA and DESC, which stated substantially

similar allegations to those in the initial lawsuits as well as an inseparable fraud claim. In November 2019, the defendants filed a motion to dismiss. In April 2020, the U.S. District Court for the District of South Carolina denied the motion to dismiss. This case is pending.

Employment Class Actions and Indemnification

In August 2017, a case was filed in the U.S. District Court for the District of South Carolina on behalf of persons who were formerly employed at the NND Project. In July 2018, the court certified this case as a class action. In February 2019, certain of these plaintiffs filed an additional case, which case has been dismissed and the plaintiffs have joined the case filed in August 2017. The plaintiffs allege, among other things, that SCANA, DESC, Fluor Corporation and Fluor Enterprises, Inc. violated the Worker Adjustment and Retraining Notification Act in connection with the decision to stop construction at the NND Project. The plaintiffs allege that the defendants failed to provide adequate advance written notice of their terminations of employment and are seeking damages, which are estimated to be as much as $100 million for 100% of the NND Project.

In September 2018, a case was filed in the State Court of Common Pleas in Fairfield County, South Carolina by Fluor Enterprises, Inc. and Fluor Daniel Maintenance Services, Inc. against DESC and Santee Cooper. The plaintiffs make claims for indemnification, breach of contract and promissory estoppel arising from, among other things, the defendants' alleged failure and refusal to defend and indemnify the Fluor defendants in the aforementioned case. These cases are pending.

FILOT Litigation and Related Matters

In November 2017, Fairfield County filed a complaint and a motion for temporary injunction against DESC in the State Court of Common Pleas in Fairfield County, South Carolina, making allegations of breach of contract, fraud, negligent misrepresentation, breach of fiduciary duty, breach of implied duty of good faith and fair dealing and unfair trade practices related to DESC’s termination of the FILOT agreement between DESC and Fairfield County related to the NND Project. The plaintiff sought a temporary and permanent injunction to prevent DESC from terminating the FILOT agreement. The plaintiff withdrew the motion for temporary injunction in December 2017. This case is pending.

Governmental Proceedings and Investigations

In June 2018, DESC received a notice of proposed assessment of approximately $410 million, excluding interest, from the SCDOR following its audit of DESC’s sales and use tax returns for the periods September 1, 2008 through December 31, 2017. The proposed assessment, which includes 100% of the NND Project, is based on the SCDOR’s position that DESC’s sales and use tax exemption for the NND Project does not apply because the facility will not become operational. DESC has protested the proposed assessment, which remains pending.

In September and October 2017, SCANA was served with subpoenas issued by the U.S. Attorney’s Office for the District of South Carolina and the Staff of the SEC’s Division of Enforcement seeking documents related to the NND Project. In February 2020, the SEC filed a complaint against SCANA, two of its former executive officers and DESC in the U.S. District Court for the District of South Carolina alleging that the defendants violated federal securities laws by making false and misleading statements about the NND Project. In April 2020, SCANA and DESC reached an agreement in principle with the Staff of the SEC’s Division of Enforcement to settle, without admitting or denying the allegations in the complaint. The Staff of the SEC’s Division of Enforcement has not yet presented the proposed settlement to the SEC. The agreement in principle would, among other things, require SCANA to pay a civil monetary penalty totaling $25 million, and SCANA and DESC to pay disgorgement and prejudgment interest totaling $112.5 million, which disgorgement and prejudgment interest amount will be deemed satisfied by the settlements in the SCANA Securities Class Action and the DESC Ratepayer Case. The proposed settlement is contingent on the review and approval of final documentation by SCANA, DESC and the Staff of the SEC’s Division of Enforcement and is subject to approval by the SEC and the U.S. District Court for the District of South Carolina. This matter is pending.

In addition, the South Carolina Law Enforcement Division is conducting a criminal investigation into the handling of the NND Project by SCANA and DESC. Dominion Energy is cooperating fully with the investigations by the U.S. Attorney’s Office and the South Carolina Law Enforcement Division, including responding to additional subpoenas and document requests. Dominion Energy has also entered into a cooperation agreement with the U.S. Attorney’s Office and the South Carolina Attorney General’s Office. The cooperation agreement provides that in consideration of its full cooperation with these investigations to the satisfaction of both agencies, neither such agency will criminally prosecute or bring any civil action against Dominion Energy or any of its current, previous, or future direct or indirect subsidiaries related to the NND Project. These matters are pending.

Other Litigation

In December 2018, arbitration proceedings commenced between DESC and Cameco Corporation related to a supply agreement signed in May 2008. This agreement provides the terms and conditions under which DESC agreed to purchase uranium hexafluoride from

Cameco Corporation over a period from 2010 to 2020. Cameco Corporation alleges that DESC violated this agreement by failing to purchase the stated quantities of uranium hexafluoride for the 2017 and 2018 delivery years. DESC denies that it is in breach of the agreement and believes that it has reduced its purchase quantity within the terms of the agreement. This matter is pending.

In September 2019, a South Carolina state court jury awarded a judgment to the estate of Jose Larios in a wrongful death suit filed in June 2017 against DESC, of which DESC was apportioned $19 million.  DESC holds general liability insurance coverage which is expected to provide payment for substantially all DESC’s liability in this matter. In October 2019, DESC filed a motion requesting a reduction in the judgment or, in the alternative, a new trial. In November 2019, DESC’s motion for a new trial was granted, setting aside the entire verdict amount. This matter is pending.  

Contractor Bankruptcy Proceedings

Westinghouse’s Reorganization Plan became effective August 1, 2018. Initially, Westinghouse had projected that its Reorganization Plan would pay in full or nearly in full its pre-petition trade creditors, including several of the Westinghouse Subcontractors which have alleged non-payment by the Consortium for amounts owed for work performed on the NND Project and have filed liens on related property in Fairfield County, South Carolina. DESC is contesting approximately $285 million of such filed liens. Most of these asserted liens are “pre-petition” claims that relate to work performed by Westinghouse Subcontractors before the Westinghouse bankruptcy, although some of them are “post-petition” claims arising from work performed after the Westinghouse bankruptcy. It is possible that the Reorganization Plan will not provide for payment in full or nearly in full to its pre-petition trade creditors. The shortfall could be significant. In addition, payments under the Toshiba Settlement are subject to reduction if Westinghouse pays Westinghouse Subcontractors holding pre-petition liens directly. Under these circumstances, DESC and Santee Cooper, each in its pro rata share, would be required to make Citibank, N.A., which purchased the scheduled payments under the Toshiba Settlement, whole for reductions related to valid subcontractor and vendor pre-petition liens up to $60 million ($33 million for DESC's 55% share).

DESC and Santee Cooper were responsible for amounts owed to Westinghouse for valid work performed by Westinghouse Subcontractors on the NND Project after the Westinghouse bankruptcy filing (i.e., post-petition) until termination of the IAA (the IAA Period). In the Westinghouse bankruptcy proceeding, deadlines were established for creditors of Westinghouse to assert the amounts owed to such creditors prior to the Westinghouse bankruptcy filing and during the IAA Period. Many of the Westinghouse Subcontractors have filed such claims. In December 2019, DESC and Santee Cooper entered into a confidential settlement agreement with W Wind Down Co LLC resolving claims relating to the IAA.

Further, some Westinghouse Subcontractors who have made claims against Westinghouse in the bankruptcy proceeding also filed against DESC and Santee Cooper in South Carolina state court for damages. The Westinghouse Subcontractor claims in South Carolina state court include common law claims for pre-petition work, IAA Period work, and work after the termination of the IAA. Many of these claimants have also asserted construction liens against the NND Project site. While DESC cannot be assured that it will not have any exposure on account of unpaid Westinghouse Subcontractor claims, which claims DESC is presently disputing, DESC believes it is unlikely that it will be required to make payments on account of such claims.

 

Nuclear Insurance

Under Price-Anderson, DESC (for itself and on behalf of Santee-Cooper) maintains agreements of indemnity with the U.S. Nuclear Regulatory Commission that, together with private insurance, cover third-party liability arising from any nuclear incident occurring at Summer. Price-Anderson provides funds up to $14.0 billion for public liability claims that could arise from a single nuclear incident. Each nuclear plant is insured against this liability to a maximum of $450 million by American Nuclear Insurers with the remaining coverage provided by a mandatory program of deferred premiums that could be assessed, after a nuclear incident, against all owners of commercial nuclear reactors. Each reactor licensee is liable for up to $138 million per reactor owned for each nuclear incident occurring at any reactor in the U.S., provided that not more than $21 million of the liability per reactor would be assessed per year. DESC’s maximum assessment, based on its two-thirds ownership of Summer, would be $92 million per incident, but not more than $14 million per year. Both the maximum assessment per reactor and the maximum yearly assessment are adjusted for inflation at least every five years.

DESC currently maintains insurance policies (for itself and on behalf of Santee Cooper) with NEIL. The policies provide coverage to Summer for property damage and outage costs up to $2.75 billion resulting from an event of nuclear origin and up to $2.33 billion resulting from an event of a non-nuclear origin. The NEIL policies in aggregate, are subject to a maximum loss of $2.75 billion for any single loss occurrence. The NEIL policies permit retrospective assessments under certain conditions to cover insurer’s losses. Based on the current annual premium, DESC’s portion of the retrospective premium assessment would not exceed $24 million. DESC currently maintains an excess property insurance policy (for itself and on behalf of Santee Cooper) with EMANI. The policy provides coverage to Summer for property damage and outage costs up to $415 million resulting from an event of a non-nuclear origin. The EMANI policy permits retrospective assessments under certain conditions to cover insurer's losses. Based on the current annual premium, DESC's portion of the retrospective premium assessment would not exceed $2 million.

To the extent that insurable claims for property damage, decontamination, repair and replacement and other costs and expenses arising from an incident at Summer exceed the policy limits of insurance, or to the extent such insurance becomes unavailable in the future, and to the extent that DESC's rates would not recover the cost of any purchased replacement power, DESC will retain the risk of loss as a self-insurer. DESC has no reason to anticipate a serious nuclear or other incident. However, if such an incident were to occur, it likely would have a material impact on DESC's results of operations, cash flows and financial position.  
v3.20.1
Operating Segments
 3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
Operating Segments

11. OPERATING SEGMENTS

In December 2019, DESC realigned its segments which resulted in the formation of a single primary operating segment. The historical information presented herein has been recast to reflect the current segment presentation.

The Corporate and Other segment includes specific items attributable to its operating segment that are not included in profit measures evaluated by executive management in assessing the segment’s performance or in allocating resources.

In the three months ended March 31, 2020, DESC reported an immaterial amount of specific items in the Corporate and Other segment. In the three months ended March 31, 2019, DESC reported after-tax net expenses of $1.2 billion for specific items in the Corporate and Other segment, all of which were attributable to its operating segment.

The net expense for specific items attributable to DESC’s operating segment in 2019 primarily related to the impact of the following items:

•

A $1.0 billion ($756 million after-tax) charge for refunds of amounts previously collected from retail electric customers for the NND Project;

•

A $198 million tax charge for $264 million of income tax-related regulatory assets for which DESC committed to forgo recovery;

•

A $166 million ($125 million after-tax) of charges associated with litigation;

•

A $105 million ($79 million after-tax) charge for utility plant primarily for which DESC committed to forgo recovery; and

•

$40 million tax charges for changes in unrecognized tax benefits.

 

(millions)

 

External

Revenue

 

 

Comprehensive

Income (Loss)

Available

(Attributable) to

Common

Shareholder

 

Three Months Ended March 31, 2020

 

 

 

 

 

 

 

 

Dominion Energy South Carolina

 

$

672

 

 

$

89

 

Corporate and Other

 

 

—

 

 

 

(1

)

Consolidated Total

 

$

672

 

 

$

88

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2019

 

 

 

 

 

 

 

 

Dominion Energy South Carolina

 

$

674

 

 

$

64

 

Corporate and Other

 

 

(1,009

)

 

 

(1,173

)

Consolidated Total

 

$

(335

)

 

$

(1,109

)

 
v3.20.1
Affiliated and Related Party Transactions
 3 Months Ended
Mar. 31, 2020
Related Party Transactions [Abstract]  
Affiliated and Related Party Transactions

12. AFFILIATED AND RELATED PARTY TRANSACTIONS

DESC owns 40% of Canadys Refined Coal, LLC, which is involved in the manufacturing and sale of refined coal to reduce emissions at certain of DESC's generating facilities. DESC accounts for this investment using the equity method. Purchases and sales of the related coal are recorded as other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss).

DESC purchases natural gas and related pipeline capacity from SEMI to serve its retail gas customers and to satisfy certain electric generation requirements. These purchases are included within gas purchased for resale or fuel used in electric generation, as applicable in the Consolidated Statements of Comprehensive Income (Loss).

DESS, on behalf of itself and its parent company, provides the following services to DESC, which are rendered at direct or allocated cost: information systems, telecommunications, customer support, marketing and sales, human resources, corporate compliance, purchasing, financial, risk management, public affairs, legal, investor relations, gas supply and capacity management, strategic planning, general administrative and retirement benefits. In addition, DESS processes and pays invoices for DESC and is reimbursed. Costs for these services include amounts capitalized. Amounts expensed are primarily recorded in other operations and maintenance - affiliated suppliers and other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss).

 

 

 

Three Months Ended

March 31,

 

(millions)

 

2020

 

 

2019

 

Purchases of coal from affiliate

 

$

—

 

 

$

28

 

Sales of coal to affiliate

 

 

—

 

 

 

28

 

Purchases of fuel used in electric generation from affiliate

 

 

—

 

 

 

33

 

Direct and allocated costs from services company affiliate(1)

 

 

67

 

 

 

58

 

Operating Revenues - Electric from sales to affiliate

 

 

—

 

 

 

1

 

Operating Expenses - Other taxes from affiliate

 

 

3

 

 

 

2

 

Purchases of electricity from solar affiliates

 

 

2

 

 

 

1

 

Demand and transportation charges from DECG - Fuel used in electric generation

 

 

4

 

 

 

11

 

Demand and transportation charges from DECG - Gas purchased for resale

 

 

11

 

 

 

4

 

 

(1)

Includes capitalized expenditures of $12 million and $9 million for the three months ended March 31, 2020 and 2019, respectively.

 

(millions)

 

March 31, 2020

 

 

December 31, 2019

 

Receivable from Canadys Refined Coal, LLC

 

$

—

 

 

$

2

 

Payable to Canadys Refined Coal, LLC

 

 

—

 

 

 

2

 

Payable to DESS

 

 

58

 

 

 

76

 

Payable to Public Service Company of North Carolina, Incorporated

 

 

6

 

 

 

8

 

Payable to solar affiliates

 

 

1

 

 

 

—

 

Receivable from DECG

 

 

—

 

 

 

1

 

Payable to DECG

 

 

5

 

 

 

5

 

 

Borrowings from an affiliate are described in Note 5.
v3.20.1
Other Income (Expense), Net
 3 Months Ended
Mar. 31, 2020
Income Statement [Abstract]  
Other Income (Expense), Net

13. OTHER INCOME (EXPENSE), NET

Components of other income (expense), net are as follows:

 

 

 

Three Months Ended

March 31,

 

(millions)

 

2020

 

 

2019

 

Revenues from contracts with customers

 

$

1

 

 

$

1

 

Other income

 

 

3

 

 

 

4

 

Other expense

 

 

(2

)

 

 

(10

)

Allowance for equity funds used during construction

 

 

1

 

 

 

—

 

Other income (expense), net

 

$

3

 

 

$

(5

)

 

Non-service cost components of pension and other postretirement benefits are included in other income (expense).
v3.20.1
Summary of Significant Accounting Policies (Policies)
 3 Months Ended
Mar. 31, 2020
Accounting Policies [Abstract]  
Basis of Consolidation and Variable Interest Entities

Basis of Consolidation and Variable Interest Entities

DESC has determined that it has a controlling financial interest in each of GENCO and Fuel Company (which are considered to be VIEs) and, accordingly, DESC's Consolidated Financial Statements include, after eliminating intercompany balances and transactions, the accounts of DESC, GENCO and Fuel Company. See Note 1 to the Consolidated Financial Statements included in DESC’s Annual Report on Form 10-K for the year ended December 31, 2019 for a description of GENCO and Fuel Company.

Additionally, DESC purchases shared services from DESS, an affiliated VIE that provides accounting, legal, finance and certain administrative and technical services to all SCANA subsidiaries, including DESC. DESC has determined that it is not the primary beneficiary of DESS as it does not have either the power to direct the activities that most significantly impact its economic performance or an obligation to absorb losses and benefits which could be significant to it. See Note 12 for amounts attributable to affiliates.

Significant Accounting Policies

There have been no significant changes from Note 2 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2019.
v3.20.1
Rate and Other Regulatory Matters (Tables)
 3 Months Ended
Mar. 31, 2020
Regulated Operations [Abstract]  
Schedule of Regulatory Assets and Liabilities

 

 

 

March 31,

 

 

December 31,

 

(millions)

 

2020

 

 

2019

 

Regulatory assets:

 

 

 

 

 

 

 

 

NND Project costs(1)

 

$

138

 

 

$

138

 

Deferred employee benefit plan costs(2)

 

 

13

 

 

 

13

 

Other unrecovered plant(3)

 

 

14

 

 

 

14

 

DSM programs(4)

 

 

16

 

 

 

17

 

AROs(5)

 

 

28

 

 

 

28

 

Cost of fuel under-collections(6)

 

 

3

 

 

 

13

 

Other

 

 

48

 

 

 

48

 

Regulatory assets - current

 

 

260

 

 

 

271

 

NND Project costs(1)

 

 

2,468

 

 

 

2,503

 

AROs(5)

 

 

305

 

 

 

293

 

Cost of reacquired debt(7)

 

 

255

 

 

 

259

 

Deferred employee benefit plan costs(2)

 

 

194

 

 

 

196

 

Deferred losses on interest rate derivatives(8)

 

 

318

 

 

 

305

 

Other unrecovered plant(3)

 

 

66

 

 

 

69

 

DSM programs(4)

 

 

58

 

 

 

54

 

Environmental remediation costs(9)

 

 

21

 

 

 

22

 

Deferred storm damage costs(10)

 

 

44

 

 

 

44

 

Deferred transmission operating costs(11)

 

 

43

 

 

 

37

 

Other(12)

 

 

101

 

 

 

110

 

Regulatory assets - noncurrent

 

 

3,873

 

 

 

3,892

 

Total regulatory assets

 

$

4,133

 

 

$

4,163

 

Regulatory liabilities:

 

 

 

 

 

 

 

 

Monetization of guaranty settlement(13)

 

$

67

 

 

$

67

 

Income taxes refundable through future rates(14)

 

 

20

 

 

 

16

 

Reserve for refunds to electric utility customers(15)

 

 

138

 

 

 

143

 

Cost of fuel over-collections(6)

 

 

37

 

 

 

12

 

Other

 

 

19

 

 

 

18

 

Regulatory liabilities - current

 

 

281

 

 

 

256

 

Monetization of guaranty settlement(13)

 

 

953

 

 

 

970

 

Income taxes refundable through future rates(14)

 

 

938

 

 

 

948

 

Asset removal costs(16)

 

 

558

 

 

 

552

 

Deferred gains on interest rate derivatives(8)

 

 

71

 

 

 

71

 

Reserve for refunds to electric utility customers(15)

 

 

623

 

 

 

656

 

Other

 

 

8

 

 

 

13

 

Regulatory liabilities - noncurrent

 

 

3,151

 

 

 

3,210

 

Total regulatory liabilities

 

$

3,432

 

 

$

3,466

 

 

(1)

Reflects expenditures associated with the NND Project, which pursuant to the SCANA Merger Approval Order, will be recovered from electric service customers over a 20-year period ending in 2039. See Note 10 for more information.

(2)

Employee benefit plan costs have historically been recovered as they have been recorded under GAAP. Deferred employee benefit plan costs represent amounts of pension and other postretirement benefit costs which were accrued as liabilities and treated as regulatory assets pursuant to FERC guidance, and costs deferred pursuant to specific South Carolina Commission regulatory orders. DESC expects to recover deferred pension costs through utility rates over periods through 2044. DESC expects to recover other deferred benefit costs through utility rates, primarily over average service periods of participating employees up to 11 years.

(3)

Represents the carrying value of coal-fired generating units, including related materials and supplies inventory, retired from service prior to being fully depreciated. DESC is amortizing these amounts through cost of service rates over the units' previous estimated remaining useful lives through 2025. Unamortized amounts are included in rate base and are earning a current return.

(4)

Represents deferred costs associated with electric demand reduction programs, and such deferred costs are currently being recovered over five years through an approved rate rider.

(5)

Represents deferred depreciation and accretion expense related to legal obligations associated with the future retirement of generation, transmission and distribution properties. The AROs primarily relate to DESC’s electric generating facilities, including Summer, and are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 105 years.

(6)

Represents amounts under- or over-collected from customers pursuant to the cost of fuel and purchased gas components approved by the South Carolina Commission.

(7)

Costs of the reacquisition of debt are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt or over the life of the replacement debt if refinanced. The reacquired debt had a weighted-average life of approximately 26 years as of March 31, 2020.

(8)

Represents (i) the changes in fair value and payments made or received upon settlement of certain interest rate derivatives designated as cash flow hedges and (ii) the changes in fair value and payments made or received upon settlement of certain other interest rate derivatives not so designated. The amounts recorded with respect to (i) are expected to be amortized to interest expense over the lives of the underlying debt through 2043.The amounts recorded with respect to (ii) are expected to be similarly amortized to interest expense through 2065.

(9)

Reflects amounts associated with the assessment and clean-up of sites currently or formerly owned by DESC. Such remediation costs are expected to be recovered over periods of up to 16 years. See Note 10 for more information.

(10)

Represents storm restoration costs for which DESC expects to receive future recovery through customer rates.

(11)

Includes deferred depreciation and property taxes associated with certain transmission assets for which DESC expects recovery from customers through future rates. See Note 10 for more information.

(12)

Various other regulatory assets are expected to be recovered through rates over varying periods through 2047.

(13)

Represents proceeds related to the monetization of the Toshiba Settlement. In accordance with the SCANA Merger Approval Order, this balance, net of amounts that may be required to satisfy liens, will be refunded to electric customers over a 20-year period ending in 2039. See Note 10 for more information.

(14)

Includes (i) excess deferred income taxes arising from the remeasurement of deferred income taxes in connection with the enactment of the 2017 Tax Reform Act (certain of which are protected under normalization rules and will be amortized over the remaining lives of related property, and certain of which will be amortized to the benefit of customers over prescribed periods as instructed by regulators) and (ii) deferred income taxes arising from investment tax credits, offset by (iii) deferred income taxes that arise from utility operations that have not been included in customer rates (a portion of which relate to depreciation and are expected to be recovered over the remaining lives of the related property which may range up to 85 years). See Note 6 for more information.

(15)

Reflects amounts previously collected from retail electric customers of DESC for the NND Project to be credited to customers over an estimated 11-year period (effective February 2019) in connection with the SCANA Merger Approval Order. See Note 10 for more information.

(16)

Represents estimated net collections through depreciation rates of amounts to be expended for the removal of assets in the future.
v3.20.1
Revenue Recognition (Tables)
 3 Months Ended
Mar. 31, 2020
Revenue From Contract With Customer [Abstract]  
Disaggregation of Revenue

DESC has disaggregated operating revenues by customer class as follows:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

March 31, 2020

 

 

March 31, 2019

 

(millions)

 

Electric

 

 

Gas

 

 

Electric

 

 

Gas

 

Customer class:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential

 

$

252

 

 

$

79

 

 

$

(271

)

 

$

78

 

Commercial

 

 

175

 

 

 

33

 

 

 

(139

)

 

 

38

 

Industrial

 

 

80

 

 

 

17

 

 

 

(82

)

 

 

26

 

Other

 

 

30

 

 

 

4

 

 

 

10

 

 

 

3

 

Revenues from contracts with

   customers

 

 

537

 

 

 

133

 

 

 

(482

)

 

 

145

 

Other revenues

 

 

2

 

 

 

—

 

 

 

2

 

 

 

—

 

Total Operating Revenues

 

$

539

 

 

$

133

 

 

$

(480

)

 

$

145

 
v3.20.1
Long-Term and Short-Term Debt (Tables)
 3 Months Ended
Mar. 31, 2020
Debt Disclosure [Abstract]  
Schedule of Line of Credit Facilities

At March 31, 2020, DESC's share of commercial paper and letters of credit outstanding under its joint credit facility with Dominion Energy, was as follows:

 

(millions)

 

Facility Limit

 

 

Outstanding

Commercial Paper

 

 

Outstanding

Letters of Credit

 

Joint revolving credit facility(1)

 

$

1,000

 

 

$

—

 

 

$

—

 

 

(1)

A maximum of $1.0 billion of the facility is available to DESC, assuming adequate capacity is available after giving effect to uses by co-borrowers Dominion Energy, Virginia Power, Dominion Energy Gas and Questar Gas. The sub-limit for DESC is set within the facility limit but can be changed at the option of the co-borrowers multiple times per year. At March 31, 2020, the sub-limit for DESC was $500 million. If DESC has liquidity needs in excess of its sub-limit, the sub-limit may be changed or such needs may be satisfied through short-term borrowings from DESC's parent or from Dominion Energy. This credit facility matures in March 2023 and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.0 billion (or the sub-limit, whichever is less) of letters of credit.
v3.20.1
Derivative Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2020
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Offsetting Liabilities

The table below presents derivative balances by type of financial instrument, if the gross amounts recognized in the Consolidated Balance Sheets were netted with derivative instruments and cash collateral received or paid:

 

 

 

March 31, 2020

 

 

December 31, 2019

 

 

 

Gross Amounts Not Offset in the Consolidated

Balance Sheet

 

 

Gross Amounts Not Offset in the Consolidated

Balance Sheet

 

(millions)

 

Gross

Liabilities

Presented in the

Consolidated

Balance Sheet

 

 

Financial

Instruments

 

 

Cash

Collateral

Paid

 

 

Net

Amounts

 

 

Gross

Liabilities

Presented in the

Consolidated

Balance Sheet

 

 

Financial

Instruments

 

 

Cash

Collateral

Paid

 

 

Net

Amounts

 

Interest rate contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Over-the-counter

 

$

33

 

 

$

—

 

 

$

23

 

 

$

10

 

 

$

19

 

 

$

—

 

 

$

19

 

 

$

—

 

Total derivatives

 

$

33

 

 

$

—

 

 

$

23

 

 

$

10

 

 

$

19

 

 

$

—

 

 

$

19

 

 

$

—

 

 
Schedule of Volume of Derivative Activity

The following table presents the volume of derivative activity at March 31, 2020. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions.

 

 

 

Current

 

 

Noncurrent

 

Interest rate(1)

 

$

—

 

 

$

71,400,000

 

 

(1)

Maturity is determined based on final settlement period.
Fair Value of Derivatives

The following tables present the fair values of derivatives and where they are presented in the Consolidated Balance Sheets:

 

(millions)

 

Fair Value -

Derivatives

under Hedge

Accounting

 

 

Fair Value -

Derivatives not

under Hedge

Accounting

 

 

Total Fair Value

 

At March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

$

1

 

 

$

1

 

 

$

2

 

Total current derivative liabilities(1)

 

 

1

 

 

 

1

 

 

 

2

 

Noncurrent Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

18

 

 

 

13

 

 

 

31

 

Total noncurrent derivative liabilities(2)

 

 

18

 

 

 

13

 

 

 

31

 

Total derivative liabilities

 

$

19

 

 

$

14

 

 

$

33

 

At December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

$

1

 

 

$

1

 

 

$

2

 

Total current derivative liabilities(1)

 

 

1

 

 

 

1

 

 

 

2

 

Noncurrent Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

 

11

 

 

 

6

 

 

 

17

 

Total noncurrent derivative liabilities(2)

 

 

11

 

 

 

6

 

 

 

17

 

Total derivative liabilities

 

$

12

 

 

$

7

 

 

$

19

 

 

(1)

Current derivative liabilities are presented in other current liabilities in the Consolidated Balance Sheets.

(2)

Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in the Consolidated Balance Sheets.
Derivatives in Cash Flow Hedging Relationships

The following tables present the gains and losses on derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Comprehensive Income (Loss):

Derivatives in Cash Flow Hedging Relationships

 

(millions)

 

Gain (loss)

Reclassified from

Deferred Accounts

into Income

 

 

Increase (Decrease)

in Derivatives

Subject to

Regulatory

Treatment(1)

 

Three Months Ended March 31, 2020

 

 

 

 

 

 

 

 

Derivative type and location of gains (losses):

 

 

 

 

 

 

 

 

Interest rate(2)

 

$

—

 

 

$

(6

)

Total

 

$

—

 

 

$

(6

)

Three Months Ended March 31, 2019

 

 

 

 

 

 

 

 

Derivative type and location of gains (losses):

 

 

 

 

 

 

 

 

Interest rate(2)

 

$

—

 

 

$

(2

)

Total

 

$

—

 

 

$

(2

)

 

(1)

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 Consolidated Statements of Comprehensive Income (Loss).

(2)

Amounts recorded in DESC’s Consolidated Statements of Comprehensive Income (Loss) are classified in interest charges.

v3.20.1
Fair Value Measurements, Including Derivatives (Tables)
 3 Months Ended
Mar. 31, 2020
Fair Value Disclosures [Abstract]  
Schedule of Liabilities Measured at Fair Value on Recurring Basis

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

 

(millions)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

At March 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

$

—

 

 

$

33

 

 

$

—

 

 

$

33

 

Total liabilities

 

$

—

 

 

$

33

 

 

$

—

 

 

$

33

 

At December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate

 

$

—

 

 

$

19

 

 

$

—

 

 

$

19

 

Total liabilities

 

$

—

 

 

$

19

 

 

$

—

 

 

$

19

 
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments For financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:

 

 

 

March 31, 2020

 

 

December 31, 2019

 

(millions)

 

Carrying

Amount

 

 

Estimated

Fair Value(1)

 

 

Carrying

Amount

 

 

Estimated

Fair Value(1)

 

Long-term debt(2)

 

$

3,359

 

 

$

4,060

 

 

$

3,358

 

 

$

4,262

 

Affiliated long-term debt

 

 

230

 

 

 

230

 

 

 

230

 

 

 

230

 

 

(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 and discount or premium.
v3.20.1
Employee Benefit Plans (Tables)
 3 Months Ended
Mar. 31, 2020
Compensation And Retirement Disclosure [Abstract]  
Components of Net Periodic Benefit Cost

Components of net periodic benefit cost recorded by DESC were as follows:

 

(millions)

 

Pension Benefits

 

 

Other Postretirement Benefits

 

Three Months Ended March 31,

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Service cost

 

$

3

 

 

$

4

 

 

$

1

 

 

$

1

 

Interest cost

 

 

6

 

 

 

8

 

 

 

2

 

 

 

2

 

Expected return on assets

 

 

(11

)

 

 

(10

)

 

 

—

 

 

 

—

 

Amortization of actuarial losses

 

 

2

 

 

 

4

 

 

 

—

 

 

 

—

 

Net periodic benefit cost

 

$

—

 

 

$

6

 

 

$

3

 

 

$

3

 

 
v3.20.1
Operating Segments (Tables)
 3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
Schedule of Segment Reporting Information, by Segment

 

(millions)

 

External

Revenue

 

 

Comprehensive

Income (Loss)

Available

(Attributable) to

Common

Shareholder

 

Three Months Ended March 31, 2020

 

 

 

 

 

 

 

 

Dominion Energy South Carolina

 

$

672

 

 

$

89

 

Corporate and Other

 

 

—

 

 

 

(1

)

Consolidated Total

 

$

672

 

 

$

88

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2019

 

 

 

 

 

 

 

 

Dominion Energy South Carolina

 

$

674

 

 

$

64

 

Corporate and Other

 

 

(1,009

)

 

 

(1,173

)

Consolidated Total

 

$

(335

)

 

$

(1,109

)

 
v3.20.1
Affiliated and Related Party Transactions (Tables)
 3 Months Ended
Mar. 31, 2020
Related Party Transactions [Abstract]  
Schedule of Affiliated Transactions Amounts expensed are primarily recorded in other operations and maintenance - affiliated suppliers and other income (expense), net in the Consolidated Statements of Comprehensive Income (Loss).

 

 

 

Three Months Ended

March 31,

 

(millions)

 

2020

 

 

2019

 

Purchases of coal from affiliate

 

$

—

 

 

$

28

 

Sales of coal to affiliate

 

 

—

 

 

 

28

 

Purchases of fuel used in electric generation from affiliate

 

 

—

 

 

 

33

 

Direct and allocated costs from services company affiliate(1)

 

 

67

 

 

 

58

 

Operating Revenues - Electric from sales to affiliate

 

 

—

 

 

 

1

 

Operating Expenses - Other taxes from affiliate

 

 

3

 

 

 

2

 

Purchases of electricity from solar affiliates

 

 

2

 

 

 

1

 

Demand and transportation charges from DECG - Fuel used in electric generation

 

 

4

 

 

 

11

 

Demand and transportation charges from DECG - Gas purchased for resale

 

 

11

 

 

 

4

 

 

(1)

Includes capitalized expenditures of $12 million and $9 million for the three months ended March 31, 2020 and 2019, respectively.
Schedule of Affiliated Transactions

 

(millions)

 

March 31, 2020

 

 

December 31, 2019

 

Receivable from Canadys Refined Coal, LLC

 

$

—

 

 

$

2

 

Payable to Canadys Refined Coal, LLC

 

 

—

 

 

 

2

 

Payable to DESS

 

 

58

 

 

 

76

 

Payable to Public Service Company of North Carolina, Incorporated

 

 

6

 

 

 

8

 

Payable to solar affiliates

 

 

1

 

 

 

—

 

Receivable from DECG

 

 

—

 

 

 

1

 

Payable to DECG

 

 

5

 

 

 

5

 

 
v3.20.1
Other Income (Expense), Net (Tables)
 3 Months Ended
Mar. 31, 2020
Income Statement [Abstract]  
Components of Other Income (Expense), Net

Components of other income (expense), net are as follows:

 

 

 

Three Months Ended

March 31,

 

(millions)

 

2020

 

 

2019

 

Revenues from contracts with customers

 

$

1

 

 

$

1

 

Other income

 

 

3

 

 

 

4

 

Other expense

 

 

(2

)

 

 

(10

)

Allowance for equity funds used during construction

 

 

1

 

 

 

—

 

Other income (expense), net

 

$

3

 

 

$

(5

)
v3.20.1
Rate and Other Regulatory Matters (Narrative) (Detail) - USD ($)
$ in Millions
 1 Months Ended 3 Months Ended
Apr. 30, 2020
Mar. 31, 2020
Rate And Other Regulatory Matters [Line Items]    
Regulatory asset recovery assessment end period   2047
Reserve For Refunds To Electric Utility Customers [Member]    
Rate And Other Regulatory Matters [Line Items]    
Electric service customers recovery period   11 years
Monetization Of Guaranty Settlement [Member]    
Rate And Other Regulatory Matters [Line Items]    
Electric service customers recovery period   20 years
End period for recovery   2039
Income Taxes Refundable Through Future Rates [Member]    
Rate And Other Regulatory Matters [Line Items]    
Remaining lives of related property period   85 years
Deferred Losses or Gains On Interest Rate Derivatives [Member]    
Rate And Other Regulatory Matters [Line Items]    
Changes in fair value and payments of interest rate derivatives designated as cash flow hedge, amortized to interest expense, year   2043
Changes in fair value and payments of interest rate derivatives not designed, amortized to interest, year   2065
NND Project Costs [Member]    
Rate And Other Regulatory Matters [Line Items]    
Electric service customers recovery period   20 years
End period for recovery   2039
Deferred Employee Benefit Plan Costs [Member]    
Rate And Other Regulatory Matters [Line Items]    
Regulatory asset recovery assessment end period   2044
Average service period expected to recover other deferred benefit costs   11 years
Other Unrecovered Plant [Member]    
Rate And Other Regulatory Matters [Line Items]    
Remaining useful lives of coal-fired generating units, year   2025
Demand Side Management Programs [Member]    
Rate And Other Regulatory Matters [Line Items]    
Recovery period of regulatory asset   5 years
Asset Retirement Obligation Costs [Member]    
Rate And Other Regulatory Matters [Line Items]    
Recovery period of regulatory asset   105 years
Cost of Reacquired Debt [Member]    
Rate And Other Regulatory Matters [Line Items]    
Recovery period of regulatory asset   26 years
Environmental Remediation Costs [Member]    
Rate And Other Regulatory Matters [Line Items]    
MGP environmental remediation   16 years
Subsequent Event    
Rate And Other Regulatory Matters [Line Items]    
Annual decrease in total fuel cost component of retail electric rates $ 44  
South Carolina Commission Order, Annual DSM Program Rate Rider Recovery Amount 40  
DESC Pension Costs Rider Adjustment $ 11  
v3.20.1
Rate and Other Regulatory Matters (Schedule of Regulatory Assets) (Detail) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Regulatory Assets    
Regulatory assets, current $ 260 $ 271
Regulatory assets, noncurrent 3,873 3,892
Total regulatory assets 4,133 4,163
NND Project Costs [Member]    
Regulatory Assets    
Regulatory assets, current [1] 138 138
Regulatory assets, noncurrent [1] 2,468 2,503
Deferred Employee Benefit Plan Costs [Member]    
Regulatory Assets    
Regulatory assets, current [2] 13 13
Regulatory assets, noncurrent [2] 194 196
Other Unrecovered Plant [Member]    
Regulatory Assets    
Regulatory assets, current [3] 14 14
Regulatory assets, noncurrent [3] 66 69
Demand Side Management Programs [Member]    
Regulatory Assets    
Regulatory assets, current [4] 16 17
Regulatory assets, noncurrent [4] 58 54
Other Regulatory Assets [Member]    
Regulatory Assets    
Regulatory assets, current 48 48
Regulatory assets, noncurrent [5] 101 110
Asset Retirement Obligation Costs [Member]    
Regulatory Assets    
Regulatory assets, current [6] 28 28
Regulatory assets, noncurrent [6] 305 293
Cost Of Fuel Under-collections [Member]    
Regulatory Assets    
Regulatory assets, current [7] 3 13
Deferred Losses On Interest Rate Derivatives [Member]    
Regulatory Assets    
Regulatory assets, noncurrent [8] 318 305
Cost of Reacquired Debt [Member]    
Regulatory Assets    
Regulatory assets, noncurrent [9] 255 259
Environmental Remediation Costs [Member]    
Regulatory Assets    
Regulatory assets, noncurrent [10] 21 22
Deferred Storm Damage Costs [Member]    
Regulatory Assets    
Regulatory assets, noncurrent [11] 44 44
Deferred Transmission Operating Costs [Member]    
Regulatory Assets    
Regulatory assets, noncurrent [12] $ 43 $ 37
[1] Reflects expenditures associated with the NND Project, which pursuant to the SCANA Merger Approval Order, will be recovered from electric service customers over a 20-year period ending in 2039. See Note 10 for more information
[2] Employee benefit plan costs have historically been recovered as they have been recorded under GAAP. Deferred employee benefit plan costs represent amounts of pension and other postretirement benefit costs which were accrued as liabilities and treated as regulatory assets pursuant to FERC guidance, and costs deferred pursuant to specific South Carolina Commission regulatory orders. DESC expects to recover deferred pension costs through utility rates over periods through 2044. DESC expects to recover other deferred benefit costs through utility rates, primarily over average service periods of participating employees up to 11 years
[3] Represents the carrying value of coal-fired generating units, including related materials and supplies inventory, retired from service prior to being fully depreciated. DESC is amortizing these amounts through cost of service rates over the units' previous estimated remaining useful lives through 2025. Unamortized amounts are included in rate base and are earning a current return
[4] Represents deferred costs associated with electric demand reduction programs, and such deferred costs are currently being recovered over five years through an approved rate rider
[5] Various other regulatory assets are expected to be recovered through rates over varying periods through 2047.
[6] Represents deferred depreciation and accretion expense related to legal obligations associated with the future retirement of generation, transmission and distribution properties. The AROs primarily relate to DESC’s electric generating facilities, including Summer, and are expected to be recovered over the related property lives and periods of decommissioning which may range up to approximately 105 years
[7] Represents amounts under- or over-collected from customers pursuant to the cost of fuel and purchased gas components approved by the South Carolina Commission.
[8] Represents (i) the changes in fair value and payments made or received upon settlement of certain interest rate derivatives designated as cash flow hedges and (ii) the changes in fair value and payments made or received upon settlement of certain other interest rate derivatives not so designated. The amounts recorded with respect to (i) are expected to be amortized to interest expense over the lives of the underlying debt through 2043.The amounts recorded with respect to (ii) are expected to be similarly amortized to interest expense through 2065
[9] Costs of the reacquisition of debt are deferred and amortized as interest expense over the would-be remaining life of the reacquired debt or over the life of the replacement debt if refinanced. The reacquired debt had a weighted-average life of approximately 26 years as of March 31, 2020
[10] Reflects amounts associated with the assessment and clean-up of sites currently or formerly owned by DESC. Such remediation costs are expected to be recovered over periods of up to 16 years. See Note 10 for more information
[11] Represents storm restoration costs for which DESC expects to receive future recovery through customer rates.
[12] Includes deferred depreciation and property taxes associated with certain transmission assets for which DESC expects recovery from customers through future rates. See Note 10 for more information
v3.20.1
Rate and Other Regulatory Matters (Schedule of Regulatory Liabilities) (Detail) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Regulatory Liabilities    
Regulatory liability, current $ 281 $ 256
Regulatory liability, noncurrent 3,151 3,210
Total regulatory liabilities 3,432 3,466
Monetization Of Guaranty Settlement [Member]    
Regulatory Liabilities    
Regulatory liability, current [1] 67 67
Regulatory liability, noncurrent [1] 953 970
Income Taxes Refundable Through Future Rates [Member]    
Regulatory Liabilities    
Regulatory liability, current [2] 20 16
Regulatory liability, noncurrent [2] 938 948
Reserve For Refunds To Electric Utility Customers [Member]    
Regulatory Liabilities    
Regulatory liability, current [3] 138 143
Regulatory liability, noncurrent [3] 623 656
Cost of Fuel Over-Collections [Member]    
Regulatory Liabilities    
Regulatory liability, current [4] 37 12
Other Regulatory Liability [Member]    
Regulatory Liabilities    
Regulatory liability, current 19 18
Regulatory liability, noncurrent 8 13
Asset Removal Cost [Member]    
Regulatory Liabilities    
Regulatory liability, noncurrent [5] 558 552
Deferred Gains On Interest Rate Derivatives [Member]    
Regulatory Liabilities    
Regulatory liability, noncurrent [6] $ 71 $ 71
[1] Represents proceeds related to the monetization of the Toshiba Settlement. In accordance with the SCANA Merger Approval Order, this balance, net of amounts that may be required to satisfy liens, will be refunded to electric customers over a 20-year period ending in 2039. See Note 10 for more information
[2] Includes (i) excess deferred income taxes arising from the remeasurement of deferred income taxes in connection with the enactment of the 2017 Tax Reform Act (certain of which are protected under normalization rules and will be amortized over the remaining lives of related property, and certain of which will be amortized to the benefit of customers over prescribed periods as instructed by regulators) and (ii) deferred income taxes arising from investment tax credits, offset by (iii) deferred income taxes that arise from utility operations that have not been included in customer rates (a portion of which relate to depreciation and are expected to be recovered over the remaining lives of the related property which may range up to 85 years). See Note 6 for more information
[3] Reflects amounts previously collected from retail electric customers of DESC for the NND Project to be credited to customers over an estimated 11-year period (effective February 2019) in connection with the SCANA Merger Approval Order. See Note 10 for more information
[4] Represents amounts under- or over-collected from customers pursuant to the cost of fuel and purchased gas components approved by the South Carolina Commission.
[5] Represents estimated net collections through depreciation rates of amounts to be expended for the removal of assets in the future.
[6] Represents (i) the changes in fair value and payments made or received upon settlement of certain interest rate derivatives designated as cash flow hedges and (ii) the changes in fair value and payments made or received upon settlement of certain other interest rate derivatives not so designated. The amounts recorded with respect to (i) are expected to be amortized to interest expense over the lives of the underlying debt through 2043.The amounts recorded with respect to (ii) are expected to be similarly amortized to interest expense through 2065
v3.20.1
Revenue Recognition (Disaggregation of Revenue) (Detail) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Operating revenue from contracts with customers $ 1 $ 1
Total Operating Revenues [1] 672 (335)
Electric Operations    
Operating revenue from contracts with customers 537 (482)
Other revenues 2 2
Total Operating Revenues 539 (480)
Gas Distribution    
Operating revenue from contracts with customers 133 145
Other revenues 0 0
Total Operating Revenues 133 145
Residential | Electric Operations    
Operating revenue from contracts with customers 252 (271)
Residential | Gas Distribution    
Operating revenue from contracts with customers 79 78
Commercial | Electric Operations    
Operating revenue from contracts with customers 175 (139)
Commercial | Gas Distribution    
Operating revenue from contracts with customers 33 38
Industrial | Electric Operations    
Operating revenue from contracts with customers 80 (82)
Industrial | Gas Distribution    
Operating revenue from contracts with customers 17 26
Other | Electric Operations    
Operating revenue from contracts with customers 30 10
Other | Gas Distribution    
Operating revenue from contracts with customers $ 4 $ 3
[1] See Note 12 for amounts attributable to affiliates.
v3.20.1
Revenue Recognition (Narrative) (Detail) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Revenue From Contract With Customer [Abstract]      
Contract liability balances $ 4   $ 9
Revenue recognized from contract liability balances $ 5 $ 2  
v3.20.1
Equity (Narrative) (Detail) - USD ($)
$ / shares in Units, $ in Millions
 1 Months Ended 3 Months Ended
Feb. 28, 2019
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Class Of Stock [Line Items]        
Common stock, par value   $ 0   $ 0
Common stock, shares authorized   50,000,000   50,000,000
Common stock, shares issued   40,300,000   40,300,000
Common stock, shares outstanding   40,300,000   40,300,000
Preferred stock, par value   $ 0   $ 0
Preferred stock, shares authorized   20,000,000   20,000,000
Preferred stock, shares issued   1,000   1,000
Preferred stock, shares outstanding   1,000   1,000
Contribution from parent   $ 0 $ 675  
Dominion Energy        
Class Of Stock [Line Items]        
Contribution from parent $ 675      
v3.20.1
Long-Term and Short-Term Debt (Narrative) (Detail) - USD ($)
 1 Months Ended 3 Months Ended
Jan. 31, 2020
Mar. 31, 2020
Apr. 30, 2019
Mar. 31, 2020
Mar. 31, 2019
Dec. 31, 2019
Debt Instrument [Line Items]            
Commercial paper borrowing limit   $ 2,200,000,000   $ 2,200,000,000    
Commercial paper maturity period   2021-03        
Short Term Borrowing Maturity Period 2 years          
Interest charges [1]       58,000,000 $ 73,000,000  
Interest income from money pool transactions       1,000,000 3,000,000  
Interest expense from money pool transactions       1,000,000 $ 3,000,000  
Maximum [Member]            
Debt Instrument [Line Items]            
Short term commercial paper maturity period   1 year        
Genco            
Debt Instrument [Line Items]            
Commercial paper borrowing limit   $ 200,000,000   200,000,000    
Investments due from affiliates   $ 3,000,000   3,000,000   $ 9,000,000
Genco | Maximum [Member]            
Debt Instrument [Line Items]            
Short term commercial paper maturity period   1 year        
Fuel Company            
Debt Instrument [Line Items]            
Money pool borrowings due to affiliates   $ 239,000,000   239,000,000   $ 219,000,000
Dominion Energy            
Debt Instrument [Line Items]            
Short-term borrowings outstanding, maximum     $ 900,000,000      
Short-term borrowings outstanding   486,000,000   486,000,000    
Interest charges       2,000,000    
Joint Revolving Credit Facility            
Debt Instrument [Line Items]            
Facility limit [2]   1,000,000,000   1,000,000,000    
Joint Revolving Credit Facility | Dominion Energy            
Debt Instrument [Line Items]            
Facility limit   6,000,000,000.0   6,000,000,000.0    
Letter of Credit            
Debt Instrument [Line Items]            
Facility limit   1,000,000,000.0   1,000,000,000.0    
Debt instrument, face amount   $ 68,000,000   $ 68,000,000    
[1] See Note 12 for amounts attributable to affiliates.
[2] A maximum of $1.0 billion of the facility is available to DESC, assuming adequate capacity is available after giving effect to uses by co-borrowers Dominion Energy, Virginia Power, Dominion Energy Gas and Questar Gas. The sub-limit for DESC is set within the facility limit but can be changed at the option of the co-borrowers multiple times per year. At March 31, 2020, the sub-limit for DESC was $500 million. If DESC has liquidity needs in excess of its sub-limit, the sub-limit may be changed or such needs may be satisfied through short-term borrowings from DESC's parent or from Dominion Energy. This credit facility matures in March 2023 and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.0 billion (or the sub-limit, whichever is less) of letters of credit
v3.20.1
Long-Term and Short-Term Debt (Schedule of Line of Credit Facilities) (Detail) - Joint Revolving Credit Facility
Mar. 31, 2020
USD ($)
 [1]
Debt Instrument [Line Items]  
Facility limit $ 1,000,000,000
Outstanding Commercial Paper 0
Outstanding Letters of Credit $ 0
[1] A maximum of $1.0 billion of the facility is available to DESC, assuming adequate capacity is available after giving effect to uses by co-borrowers Dominion Energy, Virginia Power, Dominion Energy Gas and Questar Gas. The sub-limit for DESC is set within the facility limit but can be changed at the option of the co-borrowers multiple times per year. At March 31, 2020, the sub-limit for DESC was $500 million. If DESC has liquidity needs in excess of its sub-limit, the sub-limit may be changed or such needs may be satisfied through short-term borrowings from DESC's parent or from Dominion Energy. This credit facility matures in March 2023 and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.0 billion (or the sub-limit, whichever is less) of letters of credit
v3.20.1
Long-Term and Short-Term Debt (Schedule of Line of Credit Facilities) (Parenthetical) (Detail)
 3 Months Ended
Mar. 31, 2020
USD ($)
Debt Instrument [Line Items]  
Line of credit facility maturity date 2023-03
Joint Revolving Credit Facility  
Debt Instrument [Line Items]  
Facility limit $ 1,000,000,000 [1]
Line of Credit Facility  
Debt Instrument [Line Items]  
Facility limit 500,000,000
Letter of Credit  
Debt Instrument [Line Items]  
Facility limit $ 1,000,000,000.0
[1] A maximum of $1.0 billion of the facility is available to DESC, assuming adequate capacity is available after giving effect to uses by co-borrowers Dominion Energy, Virginia Power, Dominion Energy Gas and Questar Gas. The sub-limit for DESC is set within the facility limit but can be changed at the option of the co-borrowers multiple times per year. At March 31, 2020, the sub-limit for DESC was $500 million. If DESC has liquidity needs in excess of its sub-limit, the sub-limit may be changed or such needs may be satisfied through short-term borrowings from DESC's parent or from Dominion Energy. This credit facility matures in March 2023 and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.0 billion (or the sub-limit, whichever is less) of letters of credit
v3.20.1
Income Taxes (Narrative) (Detail) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Income Taxes [Line Items]    
Effective tax rate, percent 19.90% 9.70%
Income tax expense $ 23 $ (118)
Adjusted taxable income for certain businesses 50.00%  
Prior Years | State    
Income Taxes [Line Items]    
Income tax expense   40
Unrecognized tax benefits increase (decrease)   51
SCANA Combination    
Income Taxes [Line Items]    
Income tax expense   $ 198
v3.20.1
Derivative Financial Instruments (Narrative) (Detail)
$ in Millions
Mar. 31, 2020
USD ($)
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Additional collateral to its counterparties $ 10
Collateral already posted 4
Fair value of derivative instruments with credit-related contingent provisions that are in liability position and not fully collateralized with cash $ 14
v3.20.1
Derivative Financial Instruments (Offsetting Liabilities) (Detail) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Derivative [Line Items]    
Gross liabilities presented in the consolidated balance sheet $ 33 $ 19
Gross amounts not offset in the consolidated balance sheet, financial instruments 0 0
Gross amounts not offset in the consolidated balance sheet, cash collateral paid 23 19
Gross amounts not offset in the consolidated balance sheet, net amounts 10 0
Interest Rate Contract [Member] | Over The Counter [Member]    
Derivative [Line Items]    
Gross liabilities presented in the consolidated balance sheet 33 19
Gross amounts not offset in the consolidated balance sheet, financial instruments 0 0
Gross amounts not offset in the consolidated balance sheet, cash collateral paid 23 19
Gross amounts not offset in the consolidated balance sheet, net amounts $ 10 $ 0
v3.20.1
Derivative Financial Instruments (Schedule of Volume of Derivative Activity) (Detail)
Mar. 31, 2020
USD ($)
 [1]
Interest Rate Swap Current [Member]  
Derivative [Line Items]  
Interest rate $ 0
Interest Rate Swap Noncurrent [Member]  
Derivative [Line Items]  
Interest rate $ 71,400,000
[1] Maturity is determined based on final settlement period.
v3.20.1
Derivative Financial Instruments (Fair Value of Derivatives) (Detail) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Derivative [Line Items]    
Derivative Liability $ 33 $ 19
Other Current Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability [1] 2 2
Other Noncurrent Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability [2] 31 17
Interest Rate Contract [Member] | Other Current Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability 2 2
Interest Rate Contract [Member] | Other Noncurrent Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability 31 17
Designated as Hedging Instrument [Member]    
Derivative [Line Items]    
Derivative Liability 19 12
Designated as Hedging Instrument [Member] | Other Current Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability [1] 1 1
Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability [2] 18 11
Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Current Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability 1 1
Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Noncurrent Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability 18 11
Not Designated as Hedging Instrument [Member]    
Derivative [Line Items]    
Derivative Liability 14 7
Not Designated as Hedging Instrument [Member] | Other Current Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability [1] 1 1
Not Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability [2] 13 6
Not Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Current Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability 1 1
Not Designated as Hedging Instrument [Member] | Interest Rate Contract [Member] | Other Noncurrent Liabilities [Member]    
Derivative [Line Items]    
Derivative Liability $ 13 $ 6
[1] Current derivative liabilities are presented in other current liabilities in the Consolidated Balance Sheets.
[2] Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in the Consolidated Balance Sheets.
v3.20.1
Derivative Financial Instruments (Derivatives in Cash Flow Hedging Relationships) (Detail) - Cash Flow Hedging [Member] - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Derivative [Line Items]    
Gain (loss) Reclassified from Deferred Accounts into Income $ 0 $ 0
Increase (Decrease) in Derivatives Subject to Regulatory Treatment [1] (6) (2)
Interest Rate Contract [Member]    
Derivative [Line Items]    
Gain (loss) Reclassified from Deferred Accounts into Income [2] 0 0
Increase (Decrease) in Derivatives Subject to Regulatory Treatment [1],[2] $ (6) $ (2)
[1] 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 Consolidated Statements of Comprehensive Income (Loss).
[2] Amounts recorded in DESC’s Consolidated Statements of Comprehensive Income (Loss) are classified in interest charges.
v3.20.1
Fair Value Measurements, Including Derivatives (Schedule of Liabilities Measured at Fair Value on Recurring Basis) (Details) - Fair value, recurring - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Liabilities    
Total liabilities $ 33 $ 19
Interest Rate Contract [Member]    
Liabilities    
Total liabilities 33 19
Level 1    
Liabilities    
Total liabilities 0 0
Level 1 | Interest Rate Contract [Member]    
Liabilities    
Total liabilities 0 0
Level 2    
Liabilities    
Total liabilities 33 19
Level 2 | Interest Rate Contract [Member]    
Liabilities    
Total liabilities 33 19
Level 3    
Liabilities    
Total liabilities 0 0
Level 3 | Interest Rate Contract [Member]    
Liabilities    
Total liabilities $ 0 $ 0
v3.20.1
Fair Value Measurements, Including Derivatives (Schedule of Carrying Values and Estimated Fair Values of Debt Instruments) (Detail) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
Carrying Amount    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Long-term debt [1] $ 3,359 $ 3,358
Affiliated long-term debt 230 230
Estimated Fair Value    
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]    
Long-term debt [1],[2] 4,060 4,262
Affiliated long-term debt [2] $ 230 $ 230
[1] Carrying amount includes current portions included in securities due within one year and amounts which represent the unamortized debt issuance costs and discount or premium.
[2] 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.
v3.20.1
Employee Benefit Plans (Components of Net Periodic Benefit Cost (Credit) (Detail) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Pension Benefits    
Defined Benefit Plan Disclosure [Line Items]    
Service cost $ 3 $ 4
Interest cost 6 8
Expected return on assets (11) (10)
Amortization of actuarial losses 2 4
Net periodic benefit cost 0 6
Other Postretirement Benefits    
Defined Benefit Plan Disclosure [Line Items]    
Service cost 1 1
Interest cost 2 2
Expected return on assets 0 0
Amortization of actuarial losses 0 0
Net periodic benefit cost $ 3 $ 3
v3.20.1
Employee Benefit Plans (Narrative) (Detail)
 3 Months Ended
Mar. 31, 2020
Compensation And Retirement Disclosure [Abstract]  
Defined benefit plan, expected future employer contributions, next fiscal year, description No
v3.20.1
Commitments and Contingencies (Narrative) (Detail)
 1 Months Ended 3 Months Ended
Apr. 30, 2015
Facility
Oct. 31, 2014
MGD
Facility
Apr. 30, 2020
USD ($)
Sep. 30, 2019
USD ($)
Jul. 31, 2019
USD ($)
Feb. 28, 2019
USD ($)
Dec. 31, 2018
USD ($)
Jun. 30, 2018
USD ($)
Aug. 31, 2016
T
Mar. 31, 2020
USD ($)
Product
Mar. 31, 2019
USD ($)
Dec. 31, 2019
USD ($)
Loss Contingencies [Line Items]                        
Electric generating stations with water withdrawals under CWA | MGD   125                    
Electric generating stations with water withdrawals with heightened entrainment analysis under CWA | MGD   2                    
Number of DESC facilities subject to final regulations | Facility   5                    
Number of DESC hydroelectric facilities subject to regulations | Facility   5                    
Number of manufacturing gas plant decommissioned sites that contain residues of byproduct chemicals | Product                   4    
Estimated environmental remediation activities at manufacturing gas plant sites                   $ 10,000,000    
Estimated increase in remediation costs for Congaree River site                   8,000,000    
Environmental remediation costs recognized in regulatory assets                   23,000,000    
Number of CCR landfills facilities subject to final rule | Facility 3                      
Impairment of assets and other charges                   2,000,000 $ 262,000,000  
Customer refundable fees, alternative plan                   3,432,000,000   $ 3,466,000,000
Transmission assets related to BLRA capital costs                   345,000,000    
Transmission assets related to BLRA regulatory assets                   43,000,000    
Reserves for litigation and regulatory proceedings                   492,000,000   492,000,000
Insurance receivables                   6,000,000   $ 6,000,000
Settlement payable by all                   520,000,000    
Settlement payable by company           $ 100,000,000       320,000,000    
Proportionate ownership share in project           100.00%   100.00%        
Proposed assessment amount from SCDOR audit               $ 410,000,000        
Contesting amount for filed liens in Fairfield country                   285,000,000    
Reduction of liens filed                   $ 60,000,000    
Percentage share of reduction of liens filed                   55.00%    
Nuclear Insurance                        
Loss Contingencies [Line Items]                        
Maximum liability each nuclear plant is insured against                   $ 450,000,000    
Inflation adjustment period for nuclear insurance                   5 years    
NEIL maximum insurance coverage to nuclear facility for property damage and outage costs                   $ 2,750,000,000    
NEIL maximum insurance coverage to nuclear facility for property damage and outage costs from non-nuclear event                   2,330,000,000    
NEIL aggregate maximum loss for any single loss occurrence                   2,750,000,000    
NEIL maximum retrospective premium assessment                   24,000,000    
EMANI maximum insurance coverage for Summer station unit 1 for property damage and outage costs from non-nuclear event                   415,000,000    
EMANI maximum retrospective premium assessment                   2,000,000    
Maximum [Member] | Nuclear Insurance                        
Loss Contingencies [Line Items]                        
Maximum liability protection per nuclear incident amount                   14,000,000,000.0    
Amount that could be assessed for each licensed reactor                   138,000,000    
Amount that could be assessed for each licensed reactor per year                   21,000,000    
Dominion Energy South Carolina, Inc.                        
Loss Contingencies [Line Items]                        
Reduction of liens filed                   33,000,000    
SCANA | Subsequent Event                        
Loss Contingencies [Line Items]                        
Payment of civil monetary penalty     $ 25,000,000                  
SCANA and DESC | Subsequent Event                        
Loss Contingencies [Line Items]                        
Payment of disgorgement and prejudgment interest     $ 112,500,000                  
DESC Summer | Maximum [Member] | Nuclear Insurance                        
Loss Contingencies [Line Items]                        
Amount that could be assessed for each licensed reactor                   92,000,000    
Amount that could be assessed for each licensed reactor per year                   $ 14,000,000    
DESC Ratepayer Case                        
Loss Contingencies [Line Items]                        
Impairment of assets and other charges                     105,000,000  
Impairment of assets and other charges, after-tax                     79,000,000  
Customer refundable fees, alternative plan                     1,000,000,000.0  
Customer refund fees alternative plan after tax                     $ 756,000,000  
Customer refunded estimated period                     11 years  
Previous existing regulatory liability                     $ 1,000,000,000.0  
Previous existing regulatory liability, years                     20 years  
Regulatory liability for refunds to natural gas customers                     $ 2,000,000  
Regulatory liability for refunds to natural gas customers, after tax                     2,000,000  
Regulatory asset impairment charges committed to forgo recovery                     264,000,000  
Tax charge related to regulatory assets committed to forgo recovery                     198,000,000  
Escrow amount             $ 2,000,000,000.0          
Credit in future electric rate relief for ratepayer case             2,000,000,000.0          
Cash payment related to Ratepayer Case         $ 117,000,000   115,000,000          
Property with net value transferred         $ 42,000,000              
DESC Ratepayer Case | Minimum [Member]                        
Loss Contingencies [Line Items]                        
Estimated aggregate fair value of certain real estate             60,000,000          
DESC Ratepayer Case | Maximum [Member]                        
Loss Contingencies [Line Items]                        
Estimated aggregate fair value of certain real estate             $ 85,000,000          
DESC Ratepayer Case | Dominion Energy South Carolina, Inc. | Impairment of Assets and Other Charges                        
Loss Contingencies [Line Items]                        
Impairment of assets and other charges                     166,000,000  
Impairment of assets and other charges, after-tax                     $ 125,000,000  
Wrongful Death Suit of Estate of Jose Larios | Dominion Energy South Carolina, Inc.                        
Loss Contingencies [Line Items]                        
Litigation settlement expense awarded       $ 19,000,000                
Carbon Regulations [Member]                        
Loss Contingencies [Line Items]                        
Significant emission rate per year CO2 equivalent | T                 75,000      
v3.20.1
Operating Segments (Narrative) (Detail)
$ in Millions
 3 Months Ended
Mar. 31, 2020
USD ($)
Segment
Mar. 31, 2019
USD ($)
Dec. 31, 2019
USD ($)
Segment Reporting Information [Line Items]      
Number of primary operating segment | Segment 1    
Charge for refund of amounts from customers $ 68   $ 76
Operating Segment | Corporate and Other      
Segment Reporting Information [Line Items]      
After- tax net expenses   $ 1,200  
Operating Segment | Dominion Energy South Carolina      
Segment Reporting Information [Line Items]      
Charge for refund of amounts from customers   1,000  
Charge for refund of amounts from customers, after tax   756  
Income tax related to regulatory assets acquired   198  
Income tax related to regulatory assets acquired, after tax   264  
Litigation charges   166  
Litigation charges, after tax   125  
Charge for utility plant but committed to forgo recovery   105  
Charge for utility plant but committed to forgo recovery, after tax   79  
Changes in unrecognized tax benefits   $ 40  
v3.20.1
Operating Segments - Schedule of Segment Information (Details) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Segment Reporting Information [Line Items]    
External revenue $ 672 $ (335)
Comprehensive income (loss) available (attributable) to common shareholder 88 (1,109)
Dominion Energy South Carolina | Operating Segment    
Segment Reporting Information [Line Items]    
External revenue 672 674
Comprehensive income (loss) available (attributable) to common shareholder 89 64
Corporate and Other | Operating Segment    
Segment Reporting Information [Line Items]    
External revenue 0 (1,009)
Comprehensive income (loss) available (attributable) to common shareholder $ (1) $ (1,173)
v3.20.1
Affiliated and Related Party Transactions (Narrative) (Detail)
Mar. 31, 2020
Canadys Refined Coal [Member]  
Related Party Transaction [Line Items]  
Ownership percentage 40.00%
v3.20.1
Affiliated and Related Party Transactions (Schedule of Affiliated Transactions - Income Statement) (Detail) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Related Party Transaction [Line Items]    
Purchases of fuel used in electric generation from affiliate $ 0 $ 33
Operating Revenues - Electric from sales to affiliate 0 1
Operating Expenses - Other taxes from affiliate 3 2
DESS [Member]    
Related Party Transaction [Line Items]    
Direct and allocated costs from services company affiliate [1] 67 58
Canadys Refined Coal [Member]    
Related Party Transaction [Line Items]    
Purchases from affiliate 0 28
Sales of coal to affiliate 0 28
Solar Affiliates [Member]    
Related Party Transaction [Line Items]    
Purchases from affiliate 2 1
DECG [Member]    
Related Party Transaction [Line Items]    
Purchases of fuel used in electric generation from affiliate 4 11
Gas purchased for resale $ 11 $ 4
[1] Includes capitalized expenditures of $12 million and $9 million for the three months ended March 31, 2020 and 2019, respectively.
v3.20.1
Affiliated and Related Party Transactions (Schedule of Affiliated Transactions - Income Statement) (Parenthetical) (Detail) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
DESS [Member]    
Related Party Transaction [Line Items]    
Capitalized expenditures $ 12 $ 9
v3.20.1
Affiliated and Related Party Transactions (Schedule of Affiliated Transactions - Balance Sheet) (Detail) - USD ($)
$ in Millions
Mar. 31, 2020
Dec. 31, 2019
DESS [Member]    
Related Party Transaction [Line Items]    
Payable to affiliates $ 58 $ 76
Public Service Company of North Carolina, Incorporated [Member]    
Related Party Transaction [Line Items]    
Payable to affiliates 6 8
Canadys Refined Coal [Member]    
Related Party Transaction [Line Items]    
Receivable from affiliates 0 2
Payable to affiliates 0 2
Solar Affiliates [Member]    
Related Party Transaction [Line Items]    
Payable to affiliates 1 0
DECG [Member]    
Related Party Transaction [Line Items]    
Receivable from affiliates 0 1
Payable to affiliates $ 5 $ 5
v3.20.1
Other Income (Expense), Net (Components of Other Income (Expense), Net) (Detail) - USD ($)
$ in Millions
 3 Months Ended
Mar. 31, 2020
Mar. 31, 2019
Income Statement [Abstract]    
Operating revenue from contracts with customers $ 1 $ 1
Other income 3 4
Other expense (2) (10)
Allowance for equity funds used during construction 1 0
Other income (expense), net $ 3 $ (5)