v3.26.1
Income Taxes
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

Note 4. Income Taxes

Other than the following matters, there have been no significant developments regarding the Companies’ provision for income taxes, tax-related assets and liabilities and/or unrecognized tax benefits disclosed in Note 5 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2025.

For continuing operations including noncontrolling interests for the six months ended June 30, 2026, the statutory U.S. federal income tax rate reconciles to the Companies’ effective income tax rate as follows:

 

 

Dominion Energy

 

 

 

Virginia Power

 

 

(millions, except percentages)

 

Amount

 

 

Rate

 

 

 

Amount

 

 

Rate

 

 

U.S. federal statutory tax

 

$

270

 

 

 

21.0

 

%

 

$

351

 

 

 

21.0

 

%

State and local income taxes, net of federal income tax effect(1)

 

 

53

 

 

 

4.1

 

 

 

 

66

 

 

 

4.0

 

 

Tax credits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Production tax credits(2)

 

 

(91

)

 

 

(7.1

)

 

 

 

(34

)

 

 

(2.0

)

 

   Investment tax credit amortization

 

 

(44

)

 

 

(3.4

)

 

 

 

(23

)

 

 

(1.4

)

 

Nontaxable or nondeductible items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Regulatory deferrals:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

      Reversal of excess deferred income taxes

 

 

(33

)

 

 

(2.6

)

 

 

 

(23

)

 

 

(1.4

)

 

      AFUDC—equity

 

 

(15

)

 

 

(1.2

)

 

 

 

(16

)

 

 

(1.0

)

 

   Absence of tax on noncontrolling interest

 

 

(29

)

 

 

(2.1

)

 

 

 

(29

)

 

 

(1.8

)

 

Other adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Qualified nuclear decommissioning trust net gains (losses)

 

 

61

 

 

 

4.8

 

 

 

 

10

 

 

 

0.6

 

 

   Other

 

 

(2

)

 

 

(0.3

)

 

 

 

(3

)

 

 

(0.1

)

 

Effective tax(3)

 

$

170

 

 

 

13.2

 

%

 

$

299

 

 

 

17.9

 

%
(1)
State taxes in Virginia make up the majority (greater than 50%) of the tax effect in this category.
(2)
Dominion Energy production tax credits include a $50 million income tax benefit for the clean energy fuel production tax credit.
(3)
The Companies had no adjustments related to the following disclosure categories: foreign tax effects, effects of changes in tax law or rates enacted in the current period and effects of cross-border tax laws.

 

For continuing operations, including noncontrolling interests for the six months ended June 30, 2025, the statutory U.S. federal income tax rate reconciles to the Companies’ effective income tax rate as follows:

 

 

 

Dominion Energy

 

 

Virginia Power

 

U.S. federal statutory tax rate

 

21.0%

 

 

21.0%

 

Increases (reductions) resulting from:

 

 

 

 

 

 

State taxes, net of federal benefit

 

 

4.7

 

 

 

4.4

 

Investment tax credits

 

 

(2.5

)

 

 

(0.8

)

Production tax credits(1)

 

 

(4.9

)

 

 

(4.1

)

Reversal of excess deferred income taxes

 

 

(1.7

)

 

 

(1.7

)

Qualified nuclear decommissioning trust net gains (losses)

 

 

2.0

 

 

 

—

 

Remeasurements and settlements of uncertain tax positions

 

 

(1.6

)

 

 

—

 

AFUDC—equity

 

 

(0.8

)

 

 

(1.0

)

Absence of tax on noncontrolling interest

 

 

(1.6

)

 

 

(2.3

)

Other, net

 

 

(0.1

)

 

 

(0.1

)

Effective tax rate

 

 

14.5

%

 

 

15.4

%

 

(1)
Dominion Energy and Virginia Power production tax credits include a $40 million income tax benefit for the nuclear production tax credit. Dominion Energy production tax credits also include a $27 million income tax benefit for the clean fuel production tax credit.

During the second quarter of 2026, Dominion Energy determined that it is expected to be subject to the corporate alternative minimum tax in 2026 and recorded a corporate alternative minimum tax liability of $21 million, net of tax credit utilization, along with corresponding deferred tax assets related to corporate alternative minimum tax credit carryforwards, which management expects to fully utilize in future periods. The ultimate impact of the corporate alternative minimum tax remains subject to pending guidance and interpretations, which could materially impact the Companies’ results of operations, financial condition and/or cash flows.

During the second quarter of 2026, Dominion Energy entered into an agreement with a third party and completed the transfer of tax credits generated in 2025 for which it received cash proceeds of $45 million. In July 2026, Dominion Energy entered into a separate agreement with a third party and completed the transfer of tax credits generated in 2025 for which it received cash proceeds of $21 million.