v3.25.2
Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes

Note 5. Income Taxes

For continuing operations, including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to the Companies’ effective income tax rate as follows:

 

 

 

Dominion Energy

 

 

Virginia Power

 

Six Months Ended June 30,

 

2025

 

 

2024

 

 

2025

 

 

2024

 

U.S. statutory rate

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

 

 

21.0

%

Increases (reductions)
   resulting from:

 

 

 

 

 

 

 

 

 

 

 

 

State taxes, net of federal
   benefit

 

 

4.7

 

 

 

2.8

 

 

 

4.4

 

 

 

4.4

 

Investment tax credits

 

 

(2.5

)

 

 

(1.8

)

 

 

(0.8

)

 

 

(0.8

)

Production tax credits

 

 

(4.9

)

 

 

(3.0

)

 

 

(4.1

)

 

 

(2.0

)

Reversal of excess
   deferred income taxes

 

 

(1.7

)

 

 

(3.2

)

 

 

(1.7

)

 

 

(1.7

)

Qualified nuclear
   decommissioning trust
   net gains (losses)

 

 

2.0

 

 

 

6.0

 

 

 

—

 

 

 

—

 

Remeasurements and
    settlements of uncertain
    tax positions

 

 

(1.6

)

 

 

—

 

 

 

—

 

 

 

—

 

AFUDC - equity

 

 

(0.8

)

 

 

(0.9

)

 

 

(1.0

)

 

 

(0.6

)

Absence of tax on
    noncontrolling interest

 

 

(1.6

)

 

 

—

 

 

 

(2.3

)

 

 

—

 

Other, net

 

 

(0.1

)

 

 

0.8

 

 

 

(0.1

)

 

 

1.0

 

Effective tax rate

 

 

14.5

%

 

 

21.7

%

 

 

15.4

%

 

 

21.3

%

 

The IRA created a nuclear production tax credit for electricity produced and sold beginning in 2024 and a clean fuel production tax credit for clean fuel produced and sold beginning in 2025. For the six months ended June 30, 2025, Dominion Energy’s and Virginia Power’s effective tax rate includes a $40 million income tax benefit for the nuclear production tax credit. For the same period, Dominion

 

 

 

 

Energy’s effective tax rate includes a $27 million income tax benefit for the clean fuel production tax credit. For the six months ended June 30, 2024, Virginia Power recorded a $17 million tax benefit which represented a prorated portion of the estimated net realizable value of the nuclear production tax credit. The ultimate nuclear and clean fuel production tax credits realized by the Companies could vary significantly based on pending final U.S. Treasury guidance.

As of June 30, 2025, Dominion Energy’s effective tax rate reflects an income tax net benefit of $18 million reflecting a $30 million remeasurement of an unrecognized tax benefit partially deferred to regulatory liabilities. A reconciliation of changes in Dominion Energy’s and Virginia Power’s unrecognized tax benefits follows for the current period:

 

 

Dominion Energy

 

 

Virginia Power

 

(millions)

 

 

 

 

 

 

Balance at January 1, 2025

 

$

170

 

 

$

56

 

Prior period positions - increases

 

 

—

 

 

 

—

 

Prior period positions - decreases

 

 

(38

)

 

 

—

 

Current period positions - increases

 

 

3

 

 

 

2

 

Settlements with tax authorities

 

 

—

 

 

 

—

 

Expiration of statutes of limitations

 

 

—

 

 

 

—

 

Balance at June 30, 2025

 

$

135

 

 

$

58

 

Discontinued operations

Income tax expense (benefit) reflected in discontinued operations is $(3) million and $40 million for the six months ended June 30, 2025 and 2024, respectively. See Note 3 for a discussion of tax expense reflected in discontinued operations during the second quarter of 2024.