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Economy, Business and Finance

Dominion Energy South Carolina Inc.

11/01/2024 | Press release | Distributed by Public on 11/01/2024 09:03

Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____


		I.R.S. Employer
Commission File Number	Exact name of registrant as specified in its charter	Identification Number

001-3375	DOMINION ENERGY SOUTH CAROLINA, INC.	57-0248695

	south carolina
	(State or other jurisdiction of incorporation or organization)

	220 OPERATION WAY
	CAYCE, SouthCarolina	29033
	(Address of principal executive offices)	(Zip Code)

	(804) 819-2284
	(Registrants' telephone number)

Securities registered pursuant to Section 12(b) of the Act:

None

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "non-accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☒	Smaller reporting company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. At October 25, 2024, Dominion Energy South Carolina, Inc. had outstanding 40,296,147shares of common stock, all of which were held by SCANA Corporation, a wholly-owned subsidiary of Dominion Energy, Inc.

Dominion Energy South Carolina, Inc. meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is filing this Form 10-Q under the reduced disclosure format.

TABLE OF CONTENTS


		Page
	Glossary of Terms	3

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	5

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27

Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	31

Item 1A.	Risk Factors	31
Item 5.	Other Information	31

Item 6.	Exhibits	32

GLOSSARY OF TERMS

The following abbreviations or acronyms used in this Form 10-Q are defined below:


Abbreviation or Acronym		Definition
2017 Tax Reform Act		An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018 (previously known as The Tax Cuts and Jobs Act) enacted on December 22, 2017
ACE Rule		Affordable Clean Energy Rule
AFUDC		Allowance for funds used during construction
AOCI		Accumulated other comprehensive income (loss)
ARO		Asset retirement obligation
BACT		Best available control technology
CAA		Clean Air Act
CCR		Coal combustion residual
CEO		Chief Executive Officer
CERCLA		Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund
CFO		Chief Financial Officer
CO2		Carbon dioxide
CPCN		Certificate of Public Convenience and Necessity
CUA		Capacity Use Area
CWA		Clean Water Act
DES		Dominion Energy Services, Inc.
DESC		The legal entity, Dominion Energy South Carolina, Inc., one or more of its consolidated entities or operating segment, or the entirety of Dominion Energy South Carolina, Inc. and its consolidated entities
Dominion Energy		The legal entity, Dominion Energy, Inc., one or more of its consolidated subsidiaries (other than DESC) or operating segments, or the entirety of Dominion Energy, Inc. and its consolidated subsidiaries
Dominion Energy South Carolina		Dominion Energy South Carolina operating segment
DSM		Demand-side management
ELG Rule		Effluent limitations guidelines for the steam electric power generating category
Enbridge		The legal entity, Enbridge Inc., one or more of its consolidated subsidiaries (including Enbridge Elephant Holdings, LLC, Enbridge Parrot Holdings, LLC and Enbridge Quail Holdings, LLC), or the entirety of Enbridge Inc. and its consolidated subsidiaries
EPA		U.S. Environmental Protection Agency
FERC		Federal Energy Regulatory Commission
Fuel Company		South Carolina Fuel Company, Inc.
GAAP		U.S. generally accepted accounting principles
GENCO		South Carolina Generating Company, Inc.
GHG		Greenhouse gas
kV		Kilovolt
MD&A		Management's Discussion and Analysis of Financial Condition and Results of Operations
MGD		Million gallons per day
MWh		Megawatt hour
NND Project		V. C. Summer Units 2 and 3 nuclear development project under which DESC and Santee Cooper undertook to construct two Westinghouse AP1000 Advanced Passive Safety nuclear units in Jenkinsville, South Carolina
NOx		Nitrogen oxide
Order 1000		Order issued by FERC adopting requirements for electric transmission planning, cost allocation and development
PSD		Prevention of significant deterioration


Abbreviation or Acronym		Definition
PSNC		Public Service Company of North Carolina, Incorporated (a subsidiary of Enbridge effective September 2024)
PSNC Transaction		The sale by Dominion Energy to Enbridge of all of its membership interests in Fall North Carolina Holdco LLC and its consolidated subsidiaries, which following a reorganization included PSNC, pursuant to a purchase and sale agreement entered into on September 5, 2023, which was completed on September 30, 2024
Questar Gas		Questar Gas Company (a subsidiary of Enbridge effective May 2024)
ROE		Return on equity
Santee Cooper		South Carolina Public Service Authority
SCANA		The legal entity, SCANA Corporation, one or more of its consolidated subsidiaries (other than DESC) or the entirety of SCANA Corporation and its consolidated subsidiaries
SCANA Combination		Dominion Energy's acquisition of SCANA completed on January 1, 2019 pursuant to the terms of the SCANA Merger Agreement
SCANA Merger Agreement		Agreement and plan of merger entered on January 2, 2018 between Dominion Energy and SCANA
SCANA Merger Approval Order		Final order issued by the South Carolina Commission on December 21, 2018 setting forth its approval of the SCANA Combination
SCDES		South Carolina Department of Environmental Services
SCDOR		South Carolina Department of Revenue
SEC		U.S. Securities and Exchange Commission
SO2		Sulfur dioxide
South Carolina Commission		Public Service Commission of South Carolina
Summer		V. C. Summer nuclear power station
Toshiba		Toshiba Corporation, parent company of Westinghouse
Toshiba Settlement		Settlement Agreement dated as of July 27, 2017, by and among Toshiba, DESC and Santee Cooper
VIE		Variable interest entity
Virginia Power		The legal entity, Virginia Electric and Power Company, a wholly-owned subsidiary of Dominion Energy, one or more of its consolidated subsidiaries or operating segment, or the entirety of Virginia Electric and Power Company and its consolidated subsidiaries
Westinghouse		Westinghouse Electric Company LLC

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Dominion Energy South Carolina, Inc.

Consolidated Balance Sheets

(Unaudited)


(millions)	September 30, 2024			December 31, 2023
ASSETS
Utility plant in service	$	15,945			$	15,500
Accumulated depreciation and amortization		(5,700	)			(5,557	)
Construction work in progress		916				606
Nuclear fuel, net of accumulated amortization		213				229
Utility plant, net ($792and $773related to VIEs)		11,374				10,778
Nonutility Property and Investments:
Nonutility property, net of accumulated depreciation		16				24
Assets held in trust, nuclear decommissioning		270				247
Nonutility property and investments, net		286				271
Current Assets:
Cash and cash equivalents		-				1
Receivables:
Customer, net of allowance for uncollectible accounts of $7and $6		378				420
Affiliated and related party		1				4
Other		74				97
Inventories (at average cost):
Fuel		80				94
Gas stored		22				30
Materials and supplies		201				232
Prepayments		109				84
Regulatory assets		282				444
Other current assets(1)		37				23
Total current assets ($75and $89related to VIEs)		1,184				1,429
Deferred Debits and Other Assets:
Regulatory assets		3,383				3,107
Affiliated receivables		30				4
Other(1)		273				268
Total deferred debits and other assets ($31and $26related to VIEs)		3,686				3,379
Total assets	$	16,530			$	15,857

(1) See Note 12 for amounts attributable to affiliates.

See Notes to Consolidated Financial Statements.

Dominion Energy South Carolina, Inc.

Consolidated Balance Sheets-(Continued)

(Unaudited)


(millions)	September 30, 2024			December 31, 2023
CAPITALIZATION AND LIABILITIES
Common Stock - nopar value, 40.3million shares outstanding	$	4,088			$	4,088
Retained earnings		591				592
Accumulated other comprehensive loss		(1	)			(1	)
Total common equity		4,678				4,679
Noncontrolling interest		200				183
Total equity		4,878				4,862
Long-term debt, net		4,220				4,219
Affiliated long-term debt		230				-
Finance leases		2				4
Total long-term debt		4,452				4,223
Total capitalization		9,330				9,085
Current Liabilities:
Short-term borrowings		125				254
Securities due within one year		2				3
Accounts payable		159				180
Affiliated and related party payables		966				740
Customer deposits and customer prepayments		78				75
Taxes accrued		197				248
Interest accrued		82				79
Regulatory liabilities		205				205
Other		198				166
Total current liabilities		2,012				1,950
Deferred Credits and Other Liabilities:
Deferred income taxes and investment tax credits		1,362				1,318
Asset retirement obligations		1,178				731
Pension and other postretirement benefits		114				115
Regulatory liabilities		2,462				2,579
Other		72				79
Total deferred credits and other liabilities		5,188				4,822
Commitments and Contingencies (see Note 10)
Total capitalization and liabilities	$	16,530			$	15,857

See Notes to Consolidated Financial Statements.

Dominion Energy South Carolina, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended September 30,			Nine Months Ended September 30,
(millions)	2024			2023			2024		2023
Operating Revenue(1)	$	851			$	848		$	2,357		$	2,311
Operating Expenses:
Fuel used in electric generation		170				169			450			454
Purchased power(1)		18				24			50			60
Gas purchased for resale		50				47			175			174
Other operations and maintenance		121				119			369			334
Other operations and maintenance - affiliated suppliers		42				38			125			121
Impairment of assets and other charges		56				-			60			-
Depreciation and amortization		136				135			408			395
Other taxes(1)		78				69			232			221
Total operating expenses		671				601			1,869			1,759
Operating income		180				247			488			552
Other income (expense), net		(3	)			(2	)		(1	)		26
Interest charges, net of AFUDC of $5, $6, $15and $15(1)		69				64			203			186
Income before income tax expense		108				181			284			392
Income tax expense		3				35			36			68
Net Income and Other Comprehensive Income		105				146			248			324
Comprehensive Income Attributable to Noncontrolling Interest		5				5			17			15
Comprehensive Income Available to Common Shareholder	$	100			$	141		$	231		$	309

(1) See Note 12 for amounts attributable to affiliates.

See Notes to Consolidated Financial Statements.

Dominion Energy South Carolina, Inc.

Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
(millions)	2024			2023
Operating Activities
Net income	$	248			$	324
Adjustments to reconcile net income to net cash provided by operating activities:
Impairment of assets and other charges		60				-
Deferred income taxes, net		44				19
Depreciation and amortization		408				395
Amortization of nuclear fuel		27				23
Gains on sale of investments		-				(32	)
Other adjustments		1				8
Changes in certain assets and liabilities:
Receivables		58				29
Receivables - affiliated and related party		3				2
Inventories		3				-
Prepayments and deposits, net		(22	)			(32	)
Regulatory assets		105				197
Regulatory liabilities		(120	)			(243	)
Accounts payable		5				(95	)
Accounts payable - affiliated and related party		(20	)			(36	)
Taxes accrued		(51	)			(49	)
Interest accrued		3				(9	)
Pension and other postretirement benefits		(1	)			-
Other assets and liabilities		(43	)			81
Net cash provided by operating activities		708				582
Investing Activities
Property additions and construction expenditures		(767	)			(706	)
Proceeds from investments and sales or disposals of assets, including asset retirement costs		(42	)			(23	)
Purchase of investments		(15	)			(4	)
Other		2				4
Net cash used in investing activities		(822	)			(729	)
Financing Activities
Dividend to parent		(232	)			(150	)
Short-term borrowings, net		476				38
Short-term borrowings - affiliated, net		(129	)			258
Other		(2	)			(2	)
Net cash provided by financing activities		113				144
Net decrease in cash, restricted cash and equivalents		(1	)			(3	)
Cash, restricted cash and equivalents at beginning of period(1)		1				11
Cash, restricted cash and equivalents at end of period(1)	$	-			$	8
Supplemental Cash Flow Information
Significant noncash investing and financing activities:(2)
Accrued construction expenditures	$	69			$	65
Operating leases		5				2

(1)

At September 30, 2024, December 31, 2023, September 30, 2023 and December 31, 2022there were norestricted cash and equivalents balances.

(2)

See Note 10 for noncash investing activities related to the transfer of property associated with the settlement of litigation and Note 5 for noncash financing activities related to an amendment of affiliated long-term debt.

See Notes to Consolidated Financial Statements.

Dominion Energy South Carolina, Inc.

Consolidated Statements ofChanges in Common Equity

(Unaudited)

Quarter-To-Date


	Common Stock
(millions)	Shares		Amount			Retained Earnings			AOCI	Noncontrolling Interest			Total Equity
June 30, 2023		40		$	4,088			$	486	$	(2	)		$	172			$	4,744
Total comprehensive income available to common shareholder							141					5				146
Dividend to parent							(50	)							(50	)
September 30, 2023		40		$	4,088			$	577	$	(2	)		$	177			$	4,840

June 30, 2024		40		$	4,088			$	598	$	(1	)		$	195			$	4,880
Total comprehensive income available to common shareholder							100					5				105
Dividend to parent							(107	)				-				(107	)
September 30, 2024		40		$	4,088			$	591	$	(1	)		$	200			$	4,878

Year-To-Date


	Common Stock
(millions)	Shares		Amount			Retained Earnings			AOCI	Noncontrolling Interest			Total Equity
December 31, 2022		40		$	4,088			$	418	$	(2	)		$	162			$	4,666
Total comprehensive income available to common shareholder							309					15				324
Dividend to parent							(150	)							(150	)
September 30, 2023		40		$	4,088			$	577	$	(2	)		$	177			$	4,840

December 31, 2023		40		$	4,088			$	592	$	(1	)		$	183			$	4,862
Total comprehensive income available to common shareholder							231					17				248
Dividend to parent							(232	)				-				(232	)
September 30, 2024		40		$	4,088			$	591	$	(1	)		$	200			$	4,878

See Notes to Consolidated Financial Statements.

Dominion Energy South Carolina, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

The following notes should be read in conjunction with the Notes to Consolidated Financial Statements appearing in DESC's Annual Report on Form 10-K for the year ended December 31, 2023.

These are interim financial statements and, due to the seasonality of DESC's business and matters that may occur during the rest of the year, the amounts reported in the Consolidated Statements of Comprehensive Income are not necessarily indicative of amounts expected for the full year. In the opinion of management, the information furnished herein reflects all adjustments which are necessary for a fair statement of the results for the interim periods reported, and such adjustments are of a normal recurring nature unless otherwise noted. In addition, the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Certain amounts in DESC's 2023 Consolidated Financial Statements and Notes have been reclassified to conform to the 2024 presentation for comparative purposes; however, such reclassifications did not affect DESC's net income and other comprehensive income, total assets, liabilities, equity or cash flows.

DESC is a wholly-owned subsidiary of SCANA, which is a wholly-owned subsidiary of Dominion Energy.

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 2 to the Consolidated Financial Statements included in DESC's Annual Report on Form 10-K for the year ended December 31, 2023 for a description of GENCO and Fuel Company.

DESC purchases shared services from DES, an affiliated VIE that provides accounting, legal, finance and certain administrative and technical services to all Dominion Energy subsidiaries, including DESC. DESC has determined that it is not the primary beneficiary of DES 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, 2023, except as follows.

New Accounting Standards

Climate-Related Disclosures

In March 2024, the SEC issued guidance for climate-related disclosures. The guidance requires disclosure of the financial statement impacts of severe weather events and other natural conditions, including amounts capitalized or expensed as well as any associated recoveries. In addition, the guidance requires disclosure of amounts related to renewable energy credits or carbon offsets if utilized as a material component of plans to achieve climate-related targets or goals. This guidance, which is currently subject to a stay issued by the SEC, would be effective for the fiscal year beginning January 1, 2025. DESC expects this guidance to only impact its disclosures with no impacts to its results of operations, cash flows or financial condition.

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.

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, 2023.

Electric Base Rate Case

In March 2024, DESC filed its retail electric base rate case and schedules with the South Carolina Commission. DESC proposed a non-fuel, base rate increase of $295million, partially offset by a net decrease in storm damage and DSM components of $4million. If approved, the overall proposed rate increase of $291million, or 12.59%, would be effective on and after the first billing cycle of September 2024. The base rate increase was proposed to recover the significant investment in assets and operating resources required to serve an expanding customer base, maintain the safety, reliability and efficiency of DESC's system and meet increasingly stringent reliability, security and environmental requirements for the benefit of South Carolina customers. DESC presented an earned ROE of 4.32% based upon a fully-adjusted test period. The proposed rates would provide for an earned ROE of 10.60% compared to the currently authorized ROE of 9.50%.

In July 2024, DESC, the South Carolina Office of Regulatory Staff and other parties of record filed a comprehensive settlement agreement with the South Carolina Commission for approval. The comprehensive settlement agreement provides for a non-fuel, base rate increase of $219million prior to the effect of South Carolina Commission-ordered DSM reductions commencing with service rendered on September 1, 2024 and an authorized ROE of 9.94%. In addition, the comprehensive settlement agreement includes that DESC would provide a one-time bill credit in 2024 of approximately $7million primarily to residential customers. In August 2024, the South Carolina Commission voted to approve the settlement agreement.

In connection with this matter, in the third quarter of 2024 DESC recorded a charge of $58million ($44million after tax) (reflected within the Corporate and Other segment), composed of $55million within impairment of assets and other charges, including $50million to write down certain materials and supplies inventory, and $3million within other income (expense), net.

Electric - Cost of Fuel

DESC's retail electric rates include a cost of fuel component approved by the South Carolina Commission which may be adjusted periodically to reflect changes in the price of fuel purchased by DESC. In February 2024, DESC filed with the South Carolina Commission a proposal to decrease the total fuel cost component of retail electric rates. DESC's proposed adjustment is designed to recover DESC's current base fuel costs, including its existing under-collected balance, over the 12-month period beginning with the first billing cycle of May 2024. In addition, DESC proposed an increase to its variable environmental and avoided capacity cost component. The net effect is a proposed annual decrease of $315million. In March 2024, DESC, the South Carolina Office of Regulatory Staff and another party of record filed a settlement agreement with the South Carolina Commission for approval to make certain adjustments to the February 2024 filing that would result in a net annual decrease of $316million. In April 2024, the South Carolina Commission voted to approve the settlement agreement, with rates effective May 2024.

Electric - Transmission Project

In March 2024, DESC filed an application with the South Carolina Commission requesting approval of a CPCN to construct and operate the Church Creek - Charleston Transmission Line, comprised of a 7-mile 230kV transmission line and associated facilities in Charleston County, South Carolina with an estimated total project cost of $40million. In July 2024, the South Carolina Commission approved the application.

Electric - Other

DESC has approval for a DSM rider through which it recovers expenditures related to its DSM programs. In January 2024, DESC filed an application with the South Carolina Commission seeking approval to recover $47million of costs and net lost revenues associated with these programs, along with an incentive to invest in such programs. DESC requested that rates be effective with the first billing cycle of May 2024. In April 2024, the South Carolina Commission approved the request, effective with the first billing cycle of May 2024.

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 2024, DESC requested that the South Carolina Commission approve an adjustment to this rider to increase annual revenue by $9million. In April 2024, the South Carolina Commission approved the request.

Natural Gas Rates

In June 2024, DESC filed with the South Carolina Commission its monitoring report for the 12-month period ended March 31, 2024 with a total revenue requirement of $523million. This represents a $13million base rate increase, after certain adjustments, under the terms of the Natural Gas Rate Stabilization Act effective with the first billing cycle of November 2024. In October 2024, the South Carolina Commission approved a $13million base rate increase after certain adjustments, effective with the first billing cycle of November 2024.

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 costs referenced herein, 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.


	September 30,		December 31,
(millions)	2024		2023
Regulatory assets:
NND Project costs(1)	$	138		$	138
AROs(2)		12			44
Deferred employee benefit plan costs(3)		8			11
Other unrecovered plant(4)		19			19
DSM programs(5)		22			22
Cost of fuel and purchased gas under-collections(6)		28			154
Other		55			56
Regulatory assets - current		282			444
NND Project costs(1)		1,845			1,949
AROs(2)		696			379
Deferred employee benefit plan costs(3)		97			118
Interest rate hedges(7)		167			168
Other unrecovered plant(4)		82			66
DSM programs(5)		46			46
Environmental remediation costs(8)		42			34
Deferred storm damage costs(9)		95			40
Deferred transmission operating costs(10)		72			74
Derivatives(11)		99			103
Other(12)		142			130
Regulatory assets - noncurrent		3,383			3,107
Total regulatory assets	$	3,665		$	3,551
Regulatory liabilities:
Monetization of guaranty settlement(13)	$	67		$	67
Income taxes refundable through future rates(14)		37			37
Reserve for refunds to electric utility customers(15)		77			83
Derivatives(11)		24			12
Other		-			6
Regulatory liabilities - current		205			205
Monetization of guaranty settlement(13)		585			635
Income taxes refundable through future rates(14)		810			839
Asset removal costs(16)		635			633
Reserve for refunds to electric utility customers(15)		181			237
Derivatives(11)		234			229
Other		17			6
Regulatory liabilities - noncurrent		2,462			2,579
Total regulatory liabilities	$	2,667		$	2,784

(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.

(2)

Represents uncollected costs, including 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 105years. In addition, the balance at September 30, 2024 reflects amounts related to the EPA's May 2024 final rule concerning CCR as discussed in Note 10.

(3)

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 11years.

(4)

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 following depreciation amounts that were designed to recover the retired units cost over their previous estimated remaining useful lives, which has been estimated to be through 2025. Based on current projections of remaining decommissioning costs, projected recovery is expected to extend through 2039. In addition, amounts include unrecovered costs of existing meters and equipment retired from service prior to being fully depreciated as part of the Advanced Metering Infrastructure project, which are being recovered through rates through 2028. This amount also includes certain inventory and preliminary survey and investigation charges being amortized over five years related to the transition or conversion from coal to gas fired generation at certain facilities.

(5)

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

(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)

Represents settled interest rate derivatives designated as cash flow hedges expected to be amortized to interest expense over the lives of the underlying debt through 2065.

(8)

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 24years. See Note 10 for additional information.

(9)

Represents storm restoration costs for which DESC expects to receive future recovery. Pursuant to the settlement agreement approved in DESC's retail electric base rate case in August 2024, for costs incurred prior to September 2024, DESC expects to receive future recovery through customer rates through 2034and for costs incurred effective September 2024, DESC expects to receive future recovery through customer rates of approximately $2million each year. Unamortized amounts are included in rate base and are earning a current return.

(10)

Includes deferred depreciation and property taxes associated with certain transmission assets for which DESC expects future recovery from customers through 2062. Unamortized amounts are included in rate base and earning a current return.

(11)

Represents changes in the fair value of derivatives, excluding separately presented interest rate hedges, that following settlement are expected to be recovered from or refunded to customers.

(12)

Various other regulatory assets are expected to be recovered through rates over varying periods through 2078.

(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.

(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 85years).

(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.

(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 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. While such costs are not currently being recovered, management believes that 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.

3. REVENUE RECOGNITION

DESC has disaggregated operating revenues by customer class as follows:


	Three Months Ended September 30, 2024		Three Months Ended September 30, 2023			Nine Months Ended September 30, 2024		Nine Months Ended September 30, 2023
(millions)	Electric		Gas			Electric		Gas	Electric		Gas			Electric		Gas
Customer class:
Residential	$	375		$	45		$	382	$	34		$	952		$	210	$	910	$	186
Commercial		244			23			238		23			640			89		633		90
Industrial		101			16			94		19			282			51		282		56
Other		35			6			41		8			94			18		114		18
Revenues from contracts with customers		755			90			755		84			1,968			368		1,939		350
Other revenues		6			-			9		-			20			1		21		1
Total Operating Revenues	$	761		$	90		$	764	$	84		$	1,988		$	369	$	1,960	$	351

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 $7million at both September 30, 2024 and December 31, 2023. During the nine months ended September 30, 2024 and 2023, DESC recognized revenue of $5million and $9million, 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.

Balances and activity related to contract costs deferred as regulatory assets were as follows:


	Regulatory Assets
(millions)	September 30, 2024		December 31, 2023
Beginning balance	$	11		$	9
Additional costs		-			3
Amortization		-			(1	)
Ending balance	$	11		$	11

4. EQUITY

For all periods presented, DESC's authorized shares of common stock, nopar value, were 50million, of which 40.3million were issued and outstanding, and DESC's authorized shares of preferred stock, nopar value, were 20million, of which 1,000shares were issued and outstanding. All outstanding shares of common and preferred stock are held by SCANA.

There have been no material changes to the 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, 2023.

5. LONG-TERM AND SHORT-TERM DEBT

DESC's short-term financing is supported through its access as co-borrower to Dominion Energy's $6.0billion joint revolving credit facility, which can be used for working capital, as support for the combined commercial paper programs of DESC, Dominion Energy and Virginia Power and for other general corporate purposes. Other than the items discussed below, there have been no significant changes from Note 6 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2023.

At September 30, 2024, DESC's share of commercial paper and letters of credit outstanding under its joint credit facility with Dominion Energy was as follows:


(millions)	Maximum Facility Sub-Limit		Outstanding Commercial Paper			Outstanding Letters of Credit
Joint revolving credit facility(1)(2)	$	1,000		$	125		$	-

(1)

A maximum of $1.0billion of the facility is available to DESC, assuming adequate capacity is available after giving effect to uses by co-borrowers Dominion Energy and Virginia Power. A 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 September 30, 2024, the sub-limit for DESC was $500million. 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 intercompany borrowings from Dominion Energy. This credit facility matures in June 2026, with the potential to be extended by the borrowers to June 2028. The credit facility can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.0billion (or the sub-limit, whichever is less) of letters of credit.

(2)

In May 2024, the joint revolving credit facility was amended to remove Questar Gas as a co-borrower.

In 2023, FERC granted DESC authority through March 2025 to issue short-term indebtedness (pursuant to Section 204 of the Federal Power Act) in amounts not to exceed $2.2billion outstanding with maturity dates of one yearor less. At September 30, 2024, DESC had issued $125million in commercial paper supported by its joint credit facility with Dominion Energy as disclosed above and had drawn on $618million of its intercompany credit facility with Dominion Energy, as permitted by this FERC authorization. In addition, in 2023, FERC granted GENCO authority through March 2025 to issue short-term indebtedness not to exceed $200million outstanding with maturity dates of one yearor less. At September 30, 2024, GENCO had drawn on $43million of its intercompany credit facility with Dominion Energy, as permitted by this FERC authorization.

DESC is obligated with respect to an aggregate of $68million of industrial revenue bonds which are secured by letters of credit. These letters of credit expire, subject to renewal, in the fourth quarter of 2025.

DESC, GENCO and Fuel Company each have intercompany credit facilities with Dominion Energy with a maximum capacity of $900million, $200million and $400million, respectively. At September 30, 2024 and December 31, 2023, DESC, GENCO and Fuel Company collectively had borrowings outstanding under these agreements totaling $918million and $442million, respectively, which are recorded in affiliated and related party payables in DESC's Consolidated Balance Sheets. Interest charges associated with these agreements were $13million and $16million for the three months ended September 30, 2024 and 2023, respectively, and $35million and $44million for the nine months ended September 30, 2024 and 2023, respectively.

In May 2024, following approval from the South Carolina Commission, GENCO amended its $230million promissory note due to Dominion Energy to change the maturity date from May 2024to May 2027and the interest rate from 3.05% to 5.31%.

6. INCOME TAXES

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


Nine Months Ended September 30,	2024			2023
U.S. statutory rate		21.0	%		21.0	%
Increases (reductions) resulting from:
State taxes, net of federal benefit		4.0			4.1
Reversal of excess deferred income taxes		(6.7	)		(4.8	)
Allowance for equity funds used during construction		(0.8	)		-
Settlements of uncertain tax positions		(5.1	)		(2.7	)
Other, net		0.2			(0.2	)
Effective tax rate		12.6	%		17.4	%

As of September 30, 2024, there have been no material changes in unrecognized tax benefits or to the possible changes that could reasonably be expected to occur during 2024 as discussed in Note 7 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2023 with DESC recognizing a benefit of $14million during the nine months ended September 30, 2024.

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, 2023. See Note 8 for further information about fair value measurements and associated valuation methods for derivatives.

Cash collateral, as presented in the table below, is used to offset derivative assets and liabilities when applicable. Certain 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 both September 30, 2024 and December 31, 2023, DESC would have been required to post $4million of additional collateral to its counterparties. The collateral that would be required to be posted includes the impacts of any offsetting asset positions and any amounts already posted for derivatives and non-derivative contracts per contractual terms. DESC had not posted any collateral at September 30, 2024 and December 31, 2023related 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 as of both September 30, 2024 and December 31, 2023 was $4million, which does not include the impact of any offsetting asset positions.

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:


	September 30, 2024		December 31, 2023
	Gross Amounts Not Offset in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet
(millions)	Gross Assets Presented in the Consolidated Balance Sheet(1)		Financial Instruments			Cash Collateral Received		Net Amounts	Gross Assets Presented in the Consolidated Balance Sheet(1)		Financial Instruments			Cash Collateral Received		Net Amounts
Commodity contracts:
Over-the-counter	$	5		$	-		$	-	$	5		$	-		$	-	$	-	$	-
Total derivatives	$	5		$	-		$	-	$	5		$	-		$	-	$	-	$	-

(1)

Excludes derivative assets of $192million and $176million at September 30, 2024 and December 31, 2023, respectively, which are not subject to master netting or similar arrangements.


	September 30, 2024		December 31, 2023
	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(1)		Financial Instruments			Cash Collateral Paid		Net Amounts	Gross Liabilities Presented in the Consolidated Balance Sheet(1)		Financial Instruments			Cash Collateral Paid		Net Amounts
Interest rate contracts:
Over-the-counter	$	4		$	-		$	-	$	4		$	4		$	-	$	-	$	4
Total derivatives	$	4		$	-		$	-	$	4		$	4		$	-	$	-	$	4

(1)

DESC did not have any derivative liabilities at September 30, 2024 and December 31, 2023, respectively, which were not subject to master netting or similar arrangements.

Volumes

The following table presents the volume of derivative activity at September 30, 2024. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions.


Natural Gas (bcf):	Current		Noncurrent
Basis(1)		10			-
Fixed price(1)		1			-
Electricity (MWh in millions):
Fixed price		2			22
Interest rate(2) (in millions)	$	-		$	71

(1)

Includes options.

(2)

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 not under Hedge Accounting
At September 30, 2024
ASSETS
Current Assets
Commodity	$	23
Total current derivative assets(1)		23
Noncurrent Assets
Commodity		174
Total noncurrent derivative assets(2)		174
Total derivative assets	$	197
LIABILITIES
Noncurrent Liabilities
Interest rate		4
Total noncurrent derivative liabilities(3)		4
Total derivative liabilities	$	4
At December 31, 2023
ASSETS
Current Assets
Commodity	$	9
Total current derivative assets(1)		9
Noncurrent Assets
Commodity		167
Total noncurrent derivative assets(2)		167
Total derivative assets	$	176
LIABILITIES
Noncurrent Liabilities
Interest rate		4
Total noncurrent derivative liabilities(3)		4
Total derivative liabilities	$	4

(1)

Current derivative assets are presented in other current assets in DESC's Consolidated Balance Sheets.

(2)

Noncurrent derivative assets are presented in other deferred debits and other assets in DESC's Consolidated Balance Sheets.

(3)

Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in DESC's Consolidated Balance Sheets.

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

Derivatives in Cash Flow Hedging Relationships


(millions)	Increase (Decrease) in Derivatives Subject to Regulatory Treatment(1)(2)
Three Months Ended September 30,	2024		2023
Derivative type and location of gains (losses):
Interest rate	$	-		$	-
Total	$	-		$	-
Nine Months Ended September 30,
Derivative type and location of gains (losses):
Interest rate	$	1		$	-
Total	$	1		$	-

(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.

(2)

All derivatives in cash flow hedging relationships have settled and are being amortized over the life of the debt.

Derivatives Not Designated as Hedging Instruments


(millions)	Amount of Gain (Loss) Recognized in Income on Derivatives(1)
Three Months Ended September 30,	2024			2023
Derivative type and location of gains (losses):
Commodity:
Purchased power	$	4			$	4
Fuel used in electric generation		(1	)
Total	$	3			$	4
Nine Months Ended September 30,
Derivative type and location of gains (losses):
Commodity:
Purchased power	$	1			$	4
Fuel used in electric generation		(1	)
Interest rate:
Interest charges		(1	)			(1	)
Total	$	(1	)		$	3

(1)

Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in the Consolidated Statements of Comprehensive Income.

8. FAIR VALUE MEASUREMENTS, INCLUDING DERIVATIVES

DESC's fair value measurements are made in accordance with the policies discussed in Note 2 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2023. See Note 7 in this report for further information about DESC's derivatives and hedge accounting activities.

The following table presents DESC's quantitative information about Level 3 fair value measurements at September 30, 2024. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.


	Fair Value (millions)		Valuation Techniques		Unobservable Input			Range		Weighted Average(1)
Assets
Physical forwards:
Electricity	$	193		Discounted cash flow		Market price (per MWh)	(3)		29-85		48
Physical options:
Natural gas(2)		3		Option model		Market price (per Dth)	(3)		2-5		3
					Price volatility	(4)		10%-71%		28%
Total assets	$	196

(1)

Averages weighted by volume.

(2)

Includes basis.

(3)

Represents market prices beyond defined terms for Levels 1 and 2.

(4)

Represents volatilities unrepresented in published markets.

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:


Significant Unobservable Inputs	Position	Change to Input	Impact on Fair Value Measurement
Market price	Buy	Increase (decrease)	Gain (loss)
Market price	Sell	Increase (decrease)	Loss (gain)
Price volatility	Buy	Increase (decrease)	Gain (loss)
Price volatility	Sell	Increase (decrease)	Loss (gain)

Recurring Fair Value Measurements

The following table presents DESC's assets and 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 September 30, 2024
Assets
Commodity	$	-		$	1		$	196	$	197
Total assets	$	-		$	1		$	196	$	197
Liabilities
Interest rate	$	-		$	4		$	-	$	4
Total liabilities	$	-		$	4		$	-	$	4
At December 31, 2023
Assets
Commodity	$	-		$	-		$	176	$	176
Total assets	$	-		$	-		$	176	$	176
Liabilities
Interest rate	$	-		$	4		$	-	$	4
Total liabilities	$	-		$	4		$	-	$	4

The following table presents the net change in DESC's assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category.


	Three Months Ended			Nine Months Ended
	September 30,			September 30,
	2024			2023			2024		2023
(millions)
Beginning balance	$	283			$	167		$	176		$	251
Total realized and unrealized gains (losses):
Included in earnings:
Purchased power		4				5			1			5
Included in regulatory assets/liabilities		(85	)			4			17			(80	)
Settlements		(8	)			(5	)		(7	)		(5	)
Purchases		2				-			9			-
Ending balance	$	196			$	171		$	196		$	171

There are nounrealized gains and losses included in earnings in the Level 3 fair value category related to assets/liabilities still held at the reporting date for the three and nine months ended September 30, 2024 and 2023.

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:


	September 30, 2024		December 31, 2023
(millions)	Carrying Amount		Estimated Fair Value(1)			Carrying Amount		Estimated Fair Value(1)
Long-term debt(2)	$	4,220		$	4,388		$	4,219	$	4,301
Affiliated long-term debt(3)		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, if any, presented in securities due within one year and amounts which represent the unamortized debt issuance costs and discount or premium.

(3)

Carrying amount includes current portions presented in affiliated and related party payables, as applicable.

9. EMPLOYEE BENEFIT PLANS

In DESC's Consolidated Statements of Comprehensive Income, the service cost component of net periodic benefit (credit) cost is reflected in other operations and maintenance expense with the non-service cost components reflected in other income (expense). Components of net periodic benefit cost (credit) recorded by DESC were as follows:


(millions)	Pension Benefits			Other Postretirement Benefits
Three Months Ended September 30,	2024			2023			2024		2023
Service cost	$	2			$	2		$	-		$	-
Interest cost		8				8			2			2
Expected return on assets		(9	)			(8	)		-			-
Amortization of actuarial losses		2				3			(1	)		(1	)
Net periodic benefit cost	$	3			$	5		$	1		$	1
Nine Months Ended September 30,
Service cost	$	6			$	6		$	1		$	1
Interest cost		24				24			6			6
Expected return on assets		(28	)			(25	)		-			-
Amortization of actuarial losses		6				9			(3	)		(3	)
Net periodic benefit cost	$	8			$	14		$	4		$	4

During the three and nine months ended September 30, 2024, DESC made $6million and $7million of contributions to its qualified pension plan. In October 2024, DESC made an additional $1million of contributions to its qualified pension plan. DESC is not required to make any additional contributions to its qualified pension plan in 2024 and expects to receive reimbursement for such contributions from Santee Cooper. 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.

Pension and Other Postretirement Benefit Plan Remeasurements

In the third quarter of 2024, the pension and other postretirement benefit plans were remeasured as a result of the close of the PSNC Transaction. The remeasurement of pension plan assets and liabilities resulted in a net increase in the pension benefit plan asset of $20million. In addition, the remeasurement of other postretirement benefit plan assets and liabilities resulted in a decrease in the postretirement benefit plan liability of $3million. The discount rate used for the remeasurement was 5.39% for the pension plans and 5.42% for the other postretirement benefit plans.

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. DESC maintains various insurance programs, including general liability insurance coverage which provides coverage for personal injury or wrongful death cases. 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. During the nine months ended September 30, 2024, DESC recorded $11million of charges in aggregate for various personal injury or wrongful death cases. DESC's Consolidated Balance Sheet at September 30, 2024 includes $10million of insurance receivables related to personal injury or wrongful death cases.

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 continually monitors and evaluates its current and projected emission levels and strives to comply with all state and federal regulations regarding those emissions. DESC participates in the SO2 and NOxemission allowance programs with respect to coal plant emissions and also has constructed additional pollution control equipment at its coal-fired electric generating plants. These actions are expected to address many of the rules and regulations discussed herein.

Air

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 meet applicable 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.

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 regulated GHG emissions from existing coal-fired power plants pursuant to Section 111(d) of the CAA and required states to develop plans by July 2022 establishing unit-specific performance standards for existing coal-fired power plants. In January 2021, the U.S. Court of Appeals for the D.C. Circuit vacated the ACE Rule and remanded it to the EPA. This decision would take effect upon issuance of the court's mandate. In March 2021, the court issued a partial mandate vacating and remanding all parts of the ACE Rule except for the portion of the ACE Rule that repealed the Clean Power Plan. In October 2021, the U.S. Supreme Court agreed to hear a challenge of the U.S. Court of Appeals for the D.C. Circuit's decision on the ACE Rule. In June 2022, the U.S. Supreme Court reversed the D.C. Circuit's decision on the ACE Rule and remanded the case back to the D.C. Circuit. In May 2024, the EPA repealed the ACE Rule as part of a package of final rules addressing CO2emissions from new and existing fossil fuel-fired electric generating units.

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 exceed a significant emissions rate of 75,000tons per year of CO2equivalent 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 best operating practices. In May 2024, the EPA withdrew the proposed revision to the performance standards for coal-fired steam generating units as part of a package of final rules addressing CO2emissions from new and existing fossil fuel-fired electric generating units.

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 fivemandatory facility-specific factors, including a social cost-benefit test, and sixoptional facility-specific factors. The rule governs all electric generating stations with water withdrawals above twoMGD, with a heightened entrainment analysis for those facilities over 125MGD. DESC has fivefacilities 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 fivehydroelectric 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, technological and cost 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 established 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 twoseparate 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 was December 2023. In October 2020, the EPA released the final rule that extended the latest dates for compliance with individual facilities' compliance dates that would vary based on circumstances and the determination by state regulators and may range from 2021to 2028. In May 2024, the EPA released a final rule revising the 2015 and 2020 Effluent Limitations Guidelines, establishing more stringent standards for wastewater discharges for the Steam Electric Power Generating Category, which apply primarily to wastewater discharges at coal and oil steam generating stations. Individual facilities' compliance dates will vary based on circumstances and the determination by state regulators and may range to 2029, except in certain circumstances when a facility will be retired by 2034. DESC expects to complete wastewater treatment technology retrofits and modifications at the Williams generating station, with a similar project at the Wateree generation station under evaluation, to meet the requirements with the existing regulatory framework in South Carolina providing rate recovery mechanisms for costs of the projects. As discussed below, DESC recorded an increase to its AROs in the second quarter of 2024 in connection with the expected compliance costs associated with the EPA's May 2024 final rule concerning CCR. DESC expects that such AROs would satisfy any AROs that would have otherwise been necessary for compliance with the EPA's May 2024 Effluent Limitations Guidelines. DESC is currently unable to estimate what costs, if any, may be required in addition to the project for the Williams generating station, a potential project at the Wateree generating station and the recorded AROs to meet the requirements to operate certain facilities past 2034. However, DESC expects that while such costs for

facility improvements, if required, could be material to its financial condition and/or cash flows, the existing regulatory framework in South Carolina provides rate recovery mechanisms that could substantially mitigate any such impacts.

Capacity Use Area

In November 2019, a new CUA was established in the counties surrounding the Cope Generating Station (Western Capacity Use Area) under the South Carolina Groundwater Use and Reporting Regulation. Under the regulation any groundwater well in a CUA that withdraws above three milliongallons per month must be permitted. The Cope Generating Station is located within this new Western Capacity Use Area. Cope has been using four deep groundwater wells for cooling water and other house loads since 1996. Prior to designation of the new Western Capacity Use Area, the wells at Cope Station were only required to be registered not permitted. As a result of this designation, Cope will need to restore the surface water equipment to operable status to reduce reliance on groundwater wells. This includes completion of 316(b) requirements, (including SCDHEC BACT determination and modification of the station national pollutant discharge elimination system permit) and extensive inspection, repair and/or replacement of the associated surface water withdrawal equipment which has been idle since 1996. While the impacts of this rule change are potentially 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.

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 fourdecommissioned manufactured gas plant sites in South Carolina that are in various states of investigation, remediation and monitoring under work plans approved by, or under review by, the SCDES or the EPA. In the fourth quarter of 2023, DESC completed the majority of remediation activities at one site. DESC anticipates the remaining activities at that site will be completed by 2025 at an estimated cost of less than $1million, after which the site will continue to incur ongoing maintenance and monitoring obligations. DESC expects to recover costs arising from the remediation work at all four sites through rate recovery mechanisms and as of September 30, 2024, deferred amounts, net of amounts previously recovered through rates and insurance settlements, totaled $33million 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 threedifferent 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 twopetitions 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. 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. In May 2024, the EPA released a final rule to regulate inactive surface impoundments located at retired generating stations that contained CCR and liquids after October 2015, and certain other inactive or previously closed surface impoundments, landfills or other areas that contain accumulations of CCR. DESC believes that it may have inactive or closed units or areas that could be subject to the final rule at up to 7different stations. In connection with this rule, in the second quarter of 2024, DESC recorded an increase to its AROs of $655million, with a corresponding increase of $353million to property, plant and equipment for amounts recoverable for electric generation stations that

are currently in service and $302million to regulatory assets for amounts recoverable through retail electric rates for electric generation stations that have been retired. In the third quarter of 2024, DESC recorded an adjustment to decrease the ARO and related property, plant and equipment by $215million to reflect updated information concerning onefacility. The actual AROs related to CCRs may vary substantially from the estimates used to record the obligation.

Claims and Litigation

The following describes certain legal proceedings involving DESC relating primarily to events occurring before closing of the SCANA Combination.

Matters Fully Resolved Prior to 2024 Impacting the Consolidated Financial Statements

Governmental Proceedings and Investigations

In June 2018, DESC received a notice of proposed assessment of approximately $410million, 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. In December 2020, the parties reached an agreement in principle in the amount of $165million to resolve this matter. In June 2021, the parties executed a settlement agreement which allows DESC to fund the settlement amount through a combination of cash, shares of Dominion Energy common stock or real estate with an initial payment of at least $43million in shares of Dominion Energy common stock. In August 2021, Dominion Energy issued 0.6million shares of its common stock to satisfy DESC's obligation for the initial payment under the settlement agreement. In May 2022, Dominion Energy issued an additional 0.9million shares of its common stock to partially satisfy DESC's remaining obligation under the settlement agreement. In June 2022, DESC requested approval from the South Carolina Commission to transfer certain real estate with a total settlement value of $51million to satisfy its remaining obligation under the settlement agreement. In July 2022, the South Carolina Commission voted to approve the request and issued its final order in August 2022. In September 2022, DESC transferred certain non-utility property with a fair value of $28million to the SCDOR under the settlement agreement. In December 2022, DESC transferred additional utility property with a fair value of $3million to the SCDOR. In October 2022, DESC filed for approval to transfer the remaining real estate with FERC which was received in November 2022. In March 2023, DESC transferred utility property with a fair value of $10million to the SCDOR resulting in a gain of $9million ($7million after-tax), recorded in other income (expense), net in DESC's Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2023. In June 2023, DESC transferred the remaining utility property with a fair value of $11million to the SCDOR resulting in a gain of $11million ($8million after-tax), recorded in other income (expense), net in DESC's Consolidated Statements of Comprehensive Income for the nine months ended September 30, 2023. In July 2023, DESC made a less than $1million cash payment to the SCDOR to fully satisfy its remaining obligation, including applicable interest, under the settlement agreement.

Nuclear Operations

Other than the items discussed below, there have been no significant changes regarding DESC's nuclear insurance and spent nuclear fuel as described in Note 12 to the Consolidated Financial Statements in the DESC's Annual Report on Form 10-K for the year ended December 31, 2023.

During the first quarter of 2024, the total liability protection per nuclear incident available to all participants in the Secondary Financial Protection Program increased from $16.2billion to $16.3billion. This increase does not impact DESC's responsibility per active unit under the Price-Anderson Amendments Act of 1988. Additionally, Dominion Energy increased the amount of coverage purchased from commercial insurance pools for Summer from $450million to $500million with the remainder provided through the mandatory industry retrospective rating plan.

Surety Bonds

At September 30, 2024, DESC had purchased $24million of surety bonds. Under the terms of surety bonds, DESC is obligated to indemnify the respective surety bond company for any amounts paid.

11. OPERATING SEGMENTS

The Corporate and Other segment primarily includes specific items attributable to DESC's 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 nine months ended September 30, 2024, DESC reported after-tax net loss of $48million in the Corporate and Other segment, including $48million of after-tax net loss for specific items all of which was attributable to its operating segment. In the nine months

ended September 30, 2023, DESC reported after-tax net income of $23million in the Corporate and Other segment, including $21million of after-tax net income for specific items all of which was attributable to its operating segment.

The net loss for specific items attributable to DESC's operating segment in 2024 primarily related to a $58million ($44million after-tax) charge in connection with the electric base rate case.

The net income for specific items attributable to DESC's operating segment in 2023 primarily related to a $31million ($23million after-tax) benefit related to real estate transactions, including gains on the transfer of property to satisfy litigation associated with the NND Project.


(millions)	External Revenue		Comprehensive Income (Loss) Available (Attributable) to Common Shareholder
Three Months Ended September 30, 2024
Dominion Energy South Carolina	$	851		$	142
Corporate and Other		-			(42	)
Consolidated Total	$	851		$	100

Three Months Ended September 30, 2023
Dominion Energy South Carolina	$	848		$	137
Corporate and Other		-			4
Consolidated Total	$	848		$	141

Nine Months Ended September 30, 2024
Dominion Energy South Carolina	$	2,357		$	279
Corporate and Other		-			(48	)
Consolidated total	$	2,357		$	231

Nine Months Ended September 30, 2023
Dominion Energy South Carolina	$	2,311		$	286
Corporate and Other		-			23
Consolidated total	$	2,311		$	309

12. AFFILIATED AND RELATED PARTY TRANSACTIONS

DES, 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. 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.

DESC transacts with affiliates for certain quantities of electricity in the ordinary course of business. DESC also enters into certain commodity derivative contracts with affiliates. DESC uses these contracts, which are principally comprised of forward commodity purchases, to manage commodity price risks associated with purchases of electricity. See Note 7 for additional information.


	Three Months Ended September 30,		Nine Months Ended September 30,
(millions)	2024		2023			2024		2023
Direct and allocated costs from DES(1)	$	56		$	53		$	166	$	165
Operating Revenues - Electric from sales to affiliate		2			1			5		3
Operating Revenues - Gas from sales to affiliate		-			1			1		1
Operating Expenses - Other taxes from affiliate		1			2			6		7
Purchases of electricity from solar affiliates		4			5			8		11

(1)

Includes capitalized expenditures of $14million and $15million for the three months ended September 30, 2024 and 2023, respectively, and $41million and $44million for the nine months ended September 30, 2024 and 2023, respectively.


(millions)	September 30, 2024		December 31, 2023
Payable to DES	$	18		$	18
Payable to SCANA Corporation		7			7
Payable to PSNC				13
Derivative assets with affiliates(1)		31			33

(1)

Includes amounts recorded in other current assets of $3million and $2million as of September 30, 2024 and December 31, 2023, respectively, and amounts recorded in other deferred debits and other assets of $28million and $31million as of September 30, 2024 and December 31, 2023, respectively.

Borrowings from an affiliate are described in Note 5.

13. OTHER INCOME (EXPENSE), NET

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


	Three Months Ended September 30,			Nine Months Ended September 30,
(millions)	2024			2023			2024		2023
Other income	$	2			$	2		$	5		$	5
Gains on sales of assets(1)		-				-			2			32
Other expense		(8	)			(4	)		(17	)		(11	)
Allowance for equity funds used during construction		3				-			9			-
Other income (expense), net	$	(3	)		$	(2	)	$	(1	)	$	26

(1) Includes amounts recognized in 2023 in connection with the transfer of property to satisfy litigation. See Note 10 for additional information.

In the second quarter of 2023, DESC completed the sale of certain utility property in South Carolina, as approved by the South Carolina Commission in February 2023, for total cash consideration of $11million. In connection with the sale, DESC recognized a gain of $11million ($8million after-tax) for the nine months ended September 30, 2023.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

MD&A discusses DESC's results of operations. MD&A should be read in conjunction with DESC's Consolidated Financial Statements. DESC 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

•

Results of Operations

Forward-Looking Statements

This report contains statements concerning DESC's 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 "path," "anticipate," "estimate," "forecast," "expect," "believe," "should," "could," "plan," "may," "continue," "target" or other similar words.

DESC makes 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, wildfires, 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 pandemic health event resulting from COVID-19, and their collateral consequences, including extended disruption of economic activity in DESC's 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;

•

The indirect impacts of Dominion Energy implementing recommendations resulting from its business review concluded in March 2024;

•

Risks of operating businesses in regulated industries that are subject to changing regulatory structures;

•

Changes to regulated rates collected;

•

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;

•

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 strategy and 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;

•

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;

•

The availability of nuclear fuel, natural gas, purchased power or other materials utilized by DESC to provide electric generation, transmission and distribution and/or gas distribution services to its customers;

•

Domestic terrorism and other threats to DESC's physical and intangible assets, as well as threats to cybersecurity;

•

Additional competition from the development and deployment of alternative energy sources, such as self-generation and distributed generation technologies;

•

Competition in the development, construction and ownership of certain electric transmission facilities 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 services, including industrial, commercial and residential growth or decline in service areas, 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;

•

Adverse outcomes in litigation matters or regulatory proceedings;

•

Counterparty credit and performance risk;

•

Fluctuations in the value of investments held in nuclear decommissioning and benefit plan trusts;

•

Fluctuations in energy-related commodity prices and the effect these could have on DESC's liquidity position and the underlying value of its assets;

•

Fluctuations in interest rates;

•

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 DESC's Annual Report on Form 10-K for the year ended December 31, 2023.

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

Results of Operations

Presented below is a summary of DESC's results:


	Third Quarter		Year-To-Date
(millions)	2024		2023			$ Change		2024		2023		$ Change
Net income	$	105		$	146		$	(41	)	$	248		$	324	$	(76	)

Overview

Third Quarter 2024 vs. 2023

Net income decreased 28%, primarily due to a charge in connection with the electric base rate case and a decrease in sales to utility customers from weather, partially offset by an increase in non-fuel base rates associated with the settlement of the electric base rate case and a benefit associated with resolution of an uncertain tax position.

Year-To-Date 2024 vs. 2023

Net income decreased 23%, primarily due to a charge in connection with the electric base rate case, a decrease in gains from the sale and transfer of certain utility property and increased interest rates on bonds, partially offset by an increase in sales to utility customers from weather, an increase in non-fuel base rates associated with the settlement of the electric base rate case and an increase in sales to electric utility retail customers associated with growth.

Analysis of Consolidated Operations

Presented below are selected amounts related to DESC's results of operations:


	Third Quarter			Year-To-Date
(millions)	2024			2023			$ Change		2024		2023			$ Change
Operating revenues	$	851			$	848		$	3		$	2,357			$	2,311	$	46
Fuel used in electric generation		170				169			1			450				454		(4	)
Purchased power		18				24			(6	)		50				60		(10	)
Gas purchased for resale		50				47			3			175				174		1
Other operations and maintenance		163				157			6			494				455		39
Impairment of assets and other charges		56				-			56			60				-		60
Depreciation and amortization		136				135			1			408				395		13
Other taxes		78				69			9			232				221		11
Other income (expense), net		(3	)			(2	)		(1	)		(1	)			26		(27	)
Interest charges		69				64			5			203				186		17
Income tax expense		3				35			(32	)		36				68		(32	)

An analysis of DESC's results of operations follows:

Third Quarter 2024 vs. 2023

Operating revenues remained substantially consistent, primarily reflecting:

•

A $17 million increase in non-fuel base rates associated with the settlement of the electric base rate case; and

•

An $8 million increase in sales to electric utility retail customers associated with growth.

These increases were substantially offset by:

•

A $10 million decrease in sales to electric utility retail customers from a decrease in cooling degree days during the cooling season;

•

A $7 million decrease due to one-time credits to customers associated with the electric base rate case; and

•

A $6 million decrease in sales to electric utility customers associated with economic and other usage factors.

Purchased power decreased 25%, primarily due to a decrease in costs associated with electric utility customers, which are offset in operating revenue and do not impact net income.

Other operations and maintenance increased 4%, primarily due to an increase in outside services ($4 million) and an increase in salaries, wages and benefits and administrative expenses ($3 million).

Impairment of assets and other charges increased $56 million, primarily due to a charge in connection with the electric base rate case primarily to write down certain materials and supplies inventory.

Other taxesincreased 13%, primarily due to higher property taxes.

Income tax expense decreased 91%, primarily due to lower pre-tax income ($18 million) and a benefit associated with resolution of an uncertain tax position ($14 million).

Year-To-Date 2024 vs. 2023

Operating revenues increased 2%, primarily reflecting:

•

A $42 million increase in sales to electric utility retail customers from an increase in cooling degree days during the cooling season ($29 million) and an increase in heating degree days during the heating season ($13 million);

•

A $21 million increase in sales to electric utility retail customers associated with growth;

•

A $17 million increase in non-fuel base rates associated with the settlement of the electric base rate case;

•

A $14 million increase in sales to gas utility customers associated with economic and other usage factors; and

•

A $6 million increase in sales to gas utility customers associated with growth.

These increases were partially offset by:

•

A $24 million decrease in sales to electric utility customers associated with economic and other usage factors;

•

A $22 million net decrease in fuel-related revenue primarily as a result of a decrease in commodity costs and purchased power costs associated with sales to electric utility retail customers;

•

An $8 million decrease in sales to electric retail customers from the capital cost rider; and

•

A $7 million decrease due to one-time credits to customers associated with the electric base rate case.

Purchased power decreased 17%, primarily due to a decrease in costs associated with electric utility customers, which are offset in operating revenue and do not impact net income.

Other operations and maintenance increased 9%, primarily due to an increase in salaries, wages and benefits and administrative expenses ($13 million), charges associated with various personal injury or wrongful death litigation cases ($10 million), higher materials and supplies expense ($10 million) and an increase in outside services ($8 million).

Impairment of assets and other charges increased $60 million, primarily due to a charge in connection with the electric base rate case primarily to write down certain materials and supplies inventory.

Other income decreased $27 million, primarily due to the absences of gains on the transfer ($20 million) and sales ($11 million) of certain utility properties, partially offset by higher equity AFUDC ($9 million).

Interest charges increased 9%, primarily due to an increase in the issuance of bonds in 2023 ($24 million), partially offset by a decrease in interest rates on intercompany borrowings ($9 million).

Income tax expense decreased 47%, primarily due to lower pre-tax income.

ITEM 4. CONTROLS AND PROCEDURES

Senior management of DESC, including DESC's CEO and CFO, evaluated the effectiveness of DESC's disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, DESC's CEO and CFO have concluded that DESC's disclosure controls and procedures are effective.

There were no changes that occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, DESC's internal control over financial reporting.

PART II. OTHERINFORMATION

ITEM 1. LEGALPROCEEDINGS

From time to time, DESC is party to various legal, environmental or other regulatory proceedings, including in the ordinary course of business. SEC regulations require disclosure of certain environmental matters when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that DESC reasonably believes will exceed a specified threshold. Pursuant to the SEC regulations, DESC uses a threshold of $1 million for such proceedings.

See the following for discussions on various legal, environmental and other regulatory proceedings to which DESC is a party, which information is incorporated herein by reference:

•

Notes 3 and 12 to the Consolidated Financial Statements in DESC's Annual Report on Form 10-K for the year ended December 31, 2023.

•

Notes 2 and 10 to the Consolidated Financial Statements in this report.

ITEM 1A. RISK FACTORS

DESC's business is influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond its control. A number of these risk factors have been identified in DESC's Annual Report on Form 10-K for the year ended December 31, 2023, which should be taken into consideration when reviewing the information contained in this report. There have been no material changes with regard to the risk factors previously disclosed in DESC's Annual Report on Form 10-K for the year ended December 31, 2023. For other factors that may cause actual results to differ materially from those indicated in any forward-looking statement or projection contained in this report, see Forward-Looking Statementsin MD&A in this report.

ITEM 5. OTHERINFORMATION

During the last fiscal quarter, none of DESC's directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6.EXHIBITS


Exhibit No.		Description
3.1		Amended and Restated Articles of Incorporation, effective April 29, 2019 (Exhibit 3.1, Form 8-K filed April 29, 2019, File No. 1-3375).
3.2		Amended and Restated Bylaws, effective April 29, 2019 (Exhibit 3.2, Form 8-K filed April 29, 2019, File No. 1-3375).
4.1		Dominion Energy South Carolina, Inc. agrees to furnish to the U.S. Securities and Exchange Commission upon request any instrument with respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of its total consolidated assets.
31.a		Certification by Chief Executive Officer of Dominion Energy South Carolina, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
31.b		Certification by Chief Financial Officer of Dominion Energy South Carolina, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
32.a		Certification to the Securities and Exchange Commission by Chief Executive Officer and Chief Financial Officer of Dominion Energy South Carolina, Inc. as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
101		The following financial statements from Dominion Energy South Carolina, Inc.'s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed on November 1, 2024, formatted in iXBRL (Inline eXtensible Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Cash Flows, (iv) Consolidated Statements of Changes in Common Equity, and (v) the Notes to Consolidated Financial Statements.
104		Cover Page Interactive Data File (formatted in iXBRL (Inline eXtensible Reporting Language) and contained in Exhibit 101).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	DOMINION ENERGY SOUTH CAROLINA, INC.
		(Registrant)

	By:	/s/ Michele L. Cardiff
Date: November 1, 2024		Michele L. Cardiff
		Senior Vice President, Controller and Chief Accounting Officer

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