OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MD&A discusses Dominion Energy's results of operations and general financial condition and Virginia Power's results of operations. MD&A should be read in conjunction with the Companies' Consolidated Financial Statements. Virginia Power meets the conditions to file under the reduced disclosure format, and therefore has omitted certain sections of MD&A.

Contents of MD&A

MD&A consists of the following information:

• Forward-Looking Statements

• Accounting Matters - Dominion Energy




• Dominion Energy


  • Results of Operations


  • Segment Results of Operations


• Virginia Power


  • Results of Operations

• Liquidity and Capital Resources - Dominion Energy

• Future Issues and Other Matters - Dominion Energy

Forward-Looking Statements

This report contains statements concerning the Companies' expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify these forward-looking statements by such words as "anticipate," "estimate," "forecast," "expect," "believe," "should," "could," "plan," "may," "continue," "target" or other similar words.

The Companies make forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to differ materially from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other factors may cause actual results to differ materially from those indicated in any forward-looking statement. These factors include but are not limited to:

• Unusual weather conditions and their effect on energy sales to customers and

energy commodity prices;

• Extreme weather events and other natural disasters, including, but not limited


   to, hurricanes, high winds, severe storms, earthquakes, flooding, climate
   changes and changes in water temperatures and availability that can cause
   outages and property damage to facilities;

• The impact of extraordinary external events, such as the current pandemic


   health event resulting from COVID-19, and their collateral consequences,
   including extended disruption of economic activity in our markets and global
   supply chains;

• Federal, state and local legislative and regulatory developments, including

changes in or interpretations of federal and state tax laws and regulations;

• Risks of operating businesses in regulated industries that are subject to

changing regulatory structures;

• Changes to regulated electric rates collected by the Companies and regulated

gas distribution, transportation and storage rates collected by Dominion

Energy;

• Changes in rules for RTOs and ISOs in which the Companies join and/or

participate, including changes in rate designs, changes in FERC's

interpretation of market rules and new and evolving capacity models;

• Risks associated with Virginia Power's membership and participation in PJM,

including risks related to obligations created by the default of other

participants;

• Risks associated with entities in which Dominion Energy shares ownership with


   third parties, including risks that result from lack of sole decision making
   authority, disputes that may arise between Dominion Energy and third party
   participants and difficulties in exiting these arrangements;


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• Changes in future levels of domestic and international natural gas production,

supply or consumption;

• Impacts to Dominion Energy's noncontrolling interest in Cove Point from


   fluctuations in future volumes of LNG imports or exports from the U.S. and
   other countries worldwide or demand for, purchases of, and prices related to
   natural gas or LNG;

• Timing and receipt of regulatory approvals necessary for planned construction

or growth projects and compliance with conditions associated with such

regulatory approvals;

• The inability to complete planned construction, conversion or growth projects


   at all, or with the outcomes or within the terms and time frames initially
   anticipated, including as a result of increased public involvement,
   intervention or litigation in such projects;

• Risks and uncertainties that may impact the Companies' ability to develop and


   construct the CVOW Commercial Project within the currently proposed timeline,
   or at all, and consistent with current cost estimates along with the ability
   to recover such costs from customers;

• Changes to federal, state and local environmental laws and regulations,


   including those related to climate change, the tightening of emission or
   discharge limits for GHGs and other substances, more extensive permitting
   requirements and the regulation of additional substances;

• Cost of environmental compliance, including those costs related to climate

change;

• Changes in implementation and enforcement practices of regulators relating to

environmental standards and litigation exposure for remedial activities;

• Difficulty in anticipating mitigation requirements associated with

environmental and other regulatory approvals or related appeals;

• Unplanned outages at facilities in which the Companies have an ownership

interest;

• The impact of operational hazards, including adverse developments with respect

to pipeline and plant safety or integrity, equipment loss, malfunction or

failure, operator error and other catastrophic events;

• Risks associated with the operation of nuclear facilities, including costs

associated with the disposal of spent nuclear fuel, decommissioning, plant

maintenance and changes in existing regulations governing such facilities;

• Changes in operating, maintenance and construction costs;

• Domestic terrorism and other threats to the Companies' physical and intangible

assets, as well as threats to cybersecurity;

• Additional competition in industries in which the Companies operate, including


   in electric markets in which Dominion Energy's nonregulated generation
   facilities operate and potential competition from the development and
   deployment of alternative energy sources, such as self-generation and
   distributed generation technologies, and availability of market alternatives
   to large commercial and industrial customers;

• Competition in the development, construction and ownership of certain electric

transmission facilities in the Companies' service territory in connection with

Order 1000;

• Changes in technology, particularly with respect to new, developing or

alternative sources of generation and smart grid technologies;

• Changes in demand for the Companies' services, including industrial,


   commercial and residential growth or decline in the Companies' service areas,
   changes in supplies of natural gas delivered to Dominion Energy's pipeline
   system, failure to maintain or replace customer contracts on favorable terms,
   changes in customer growth or usage patterns, including as a result of energy
   conservation programs, the availability of energy efficient devices and the
   use of distributed generation methods;

• Receipt of approvals for, and timing of, closing dates for acquisitions and

divestitures;

• Impacts of acquisitions, divestitures, transfers of assets to joint ventures

and retirements of assets based on asset portfolio reviews;

• The expected timing and likelihood of completing the sales of the Q-Pipe Group

and Kewaunee, including the ability to obtain the requisite regulatory

approvals and the terms and conditions of such regulatory approvals;

• Adverse outcomes in litigation matters or regulatory proceedings, including

matters acquired in the SCANA Combination;

• Counterparty credit and performance risk;

• Fluctuations in the value of investments held in nuclear decommissioning

trusts by the Companies and in benefit plan trusts by Dominion Energy;

• Fluctuations in energy-related commodity prices and the effect these could


   have on Dominion Energy's earnings and the Companies' liquidity position and
   the underlying value of their assets;


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• Fluctuations in interest rates;

• Fluctuations in currency exchange rates of the Euro or Danish Krone associated

with the CVOW Commercial Project;

• Changes in rating agency requirements or credit ratings and their effect on

availability and cost of capital;

• Global capital market conditions, including the availability of credit and the


   ability to obtain financing on reasonable terms;

• Political and economic conditions, including inflation and deflation;

• Employee workforce factors including collective bargaining agreements and

labor negotiations with union employees; and

• Changes in financial or regulatory accounting principles or policies imposed

by governing bodies.

Additionally, other risks that could cause actual results to differ from predicted results are set forth in Part I. Item 1A. Risk Factors in the Companies' Annual Report on Form 10-K for the year ended December 31, 2020 and in Part II. Item 1A. Risk Factors in this report.

The Companies' forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. The Companies caution the reader not to place undue reliance on their forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. The Companies undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

Accounting Matters

Critical Accounting Policies and Estimates

As of September 30, 2021, there have been no significant changes with regard to the critical accounting policies and estimates disclosed in MD&A in the Companies' Annual Report on Form 10-K for the year ended December 31, 2020 and in the Companies' Quarterly Report on Form 10-Q for the quarter ended June 30, 2021. The policies disclosed included the accounting for regulated operations, AROs, income taxes, accounting for derivative contracts and financial instruments at fair value, use of estimates in goodwill impairment testing, use of estimates in long-lived asset and equity method investment impairment testing, employee benefit plans and held for sale classification.

Dominion Energy

Results of Operations

Presented below is a summary of Dominion Energy's consolidated results:



                                                     2021         2020        $ Change
(millions, except EPS)
Third Quarter
Net income attributable to Dominion Energy          $   654     $    356     $      298
Diluted EPS                                            0.79         0.41           0.38

Year-To-Date


Net income (loss) attributable to Dominion Energy   $ 1,947     $ (1,083 )   $    3,030
Diluted EPS                                            2.35        (1.38 )         3.73


Overview

Third Quarter 2021 vs. 2020

Net income attributable to Dominion Energy increased 84%, primarily due to the absence of charges associated with an impairment of interests in certain nonregulated solar generation facilities and the termination of a contract in connection with the sale of Fowler Ridge. In addition, there was a decrease in charges associated with Virginia Power's 2021 Triennial Review. These increases were partially offset by a decrease in net investment earnings on nuclear decommissioning trust funds and increased unrealized losses on economic hedging activities.

Year-To-Date 2021 vs. 2020

Net income attributable to Dominion Energy increased $3.0 billion, primarily due to the absence of charges associated with the cancellation of the Atlantic Coast Pipeline Project and related portions of the Supply Header Project which are presented in discontinued operations, the planned early retirements of certain electric generation facilities in Virginia, an impairment of interests in certain nonregulated solar generation facilities and the termination of a contract in connection with the sale of Fowler Ridge. In addition, there was an increase in net investment earnings on nuclear decommissioning trust funds and a decrease in charges



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associated with Virginia Power's 2021 Triennial Review. These increases were partially offset by charges associated with the settlement of the South Carolina electric base rate case and increased unrealized losses on economic hedging activities.

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