This document contains the report of the Virginia State Corporation Commission ("Commission") pursuant to § 56-596 B of the Code of Virginia ("Code"), which directs the Commission to provide an update by September 1 of each year on the status of implementation of the Virginia Electric Utility Regulation Act, Code §§ 56-576 through 56-596 ("Regulation Act").(*1)

Key highlights from the report include:

• Dominion Energy Virginia's ("DEV" or "Dominion") typical(*2) residential bill has increased $23.17 (25.58%) from July 1, 2007, to July 1, 2019, to $113.76.

• Appalachian Power Company's ("APCo") typical residential bill has increased $41.28 (61.97%) from July 1, 2007, to July 1, 2019, to $107.89.

• On March 25, 2019, DEV made a presentation to investors that announced plans to move forward with approximately $16 billion of capital investment from 2019 through 2023. DEV's analysis shows that this additional capital spending results in an increase to Virginia jurisdictional net rate base of $12.1 billion and an increase to a typical residential bill of $29.37 per month by December 31, 2023. This increase does not include the costs to customers of coal ash removal required by 2019 legislation or the costs to customers of participating in the Regional Greenhouse Gas Initiative ("RGGI") under the regulation promulgated by the Department of Environmental Quality ("DEQ").(*3)

• DEV's base rate financial results for calendar year 2018 reflect an actual earned return on equity ("ROE") of 13.47%, combined for generation and distribution. This earned ROE exceeds the 9.20% base ROE currently approved for DEV's rate adjustment clauses ("RACs"), as shown in the following table in percentage points and revenue dollars:(*4)

2018 Earnings Above Authorized Levels

Percentage Points: +4.27%
Revenues: +$277.3 million

• APCo's base rate financial results for calendar year 2018 reflect an actual earned ROE of 9.89%, combined for generation and distribution. This earned ROE exceeds the 9.42% currently approved by the Commission in Case No. PUR-2018-00048 to be used to measure earnings in APCo's triennial review, as shown in the following table in percentage points and revenue dollars.

2018 Earnings Above Authorized Levels

Percentage Points: +0.47%
Revenues: +$7.0 million
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(*1) Last year, the Commission filed a combined report on August 29, 2018, that also included reports required under (i) Chapter 771 of the 2011 Virginia Acts of Assembly related to distributed solar generation; (ii) Chapter 382 of the 2013 Virginia Acts of Assembly and Chapter 803 of the 2017 Virginia Acts of Assembly related to third-party power purchase agreements; and (iii) Chapter 6 of the 2015 Virginia Acts of Assembly related to integrated resource plan filings. The Commission intends to file the reports related to solar generation and third-party power purchase agreements by December 1, 2019, as part of other related reports required under the Grid Transformation and Security Act, Chapter 296 of the 2018 Virginia Acts of Assembly ("GTSA," "Senate Bill 966," or "SB 966"). The requirement to file a report related to integrated resource plans has expired.
(*2) For purposes of this report, a typical residential bill includes usage of 1,000 kilowatt-hours ("kWh").
(*3) As discussed below, Dominion projects that certain factors will mitigate the rate increase foreseen by 2023. The Commission believes that some of these mitigating factors may be likely to happen, but some are speculative.
(*4) As discussed below, in 2013 the Commission set an ROE of 10.0% to apply to 2013 and 2014 earnings. This ROE is no longer applicable in any Dominion proceeding.