RICHMOND, Va., July 2 /PRNewswire-FirstCall/ -- Dominion (NYSE: D) today announced that it plans to sell its Dominion Peoples and Dominion Hope natural gas distribution companies to Babcock & Brown Infrastructure Fund North America (BBIFNA), a San Francisco-based infrastructure fund that owns and manages utilities and other infrastructure assets, for $910 million, subject to changes in working capital and levels of capital expenditures, under an agreement expected to close in 2009.

Thomas F. Farrell II, Dominion chairman, president and chief executive officer, said:

"Dominion Peoples and Dominion Hope are well-run utilities with highly skilled employees and excellent assets serving outstanding communities. We look forward to working with BBIFNA to make this a smooth and timely transition for everyone involved.

"We also look forward to continuing our strong business, volunteer and philanthropic involvement in Pennsylvania and West Virginia. Through our other operations in those states at Dominion Transmission, Dominion Exploration & Production, Dominion Retail and Dominion Generation, we will be an active member of the community."

Dominion Peoples serves about 359,000 residences and businesses in Pennsylvania from its headquarters in Pittsburgh, and Dominion Hope serves about 115,000 residences and businesses in West Virginia from its headquarters in Clarksburg, W.Va. Together, they serve approximately 12 percent of Dominion's 4 million electric and natural gas utility customer accounts in the mid-Atlantic and Midwest.

Because income from Dominion Peoples and Dominion Hope is excluded from the company's operating earnings, Dominion maintains its 2008 operating earnings guidance of $3.05 per share to $3.15 per share and its 2009 operating earnings outlook of $3.25 per share to $3.40 per share. As previously stated, Dominion plans to use all after-tax proceeds, expected to be approximately $675 million, when received, to reduce debt.

The agreement is subject to regulatory approvals in Pennsylvania and West Virginia as well as clearance under the federal Hart-Scott-Rodino Act and under the Exon-Florio provision of the Omnibus Trade and Competitiveness Act.

Dominion engaged Goldman Sachs as its financial adviser in the transaction. McGuireWoods LLP provided legal services to Dominion in the transaction.

About Dominion:

Dominion is one of the nation's largest producers and transporters of energy, with a portfolio of approximately 26,500 megawatts of generation, 1.1 trillion cubic feet equivalent of proved natural gas and oil reserves, 14,000 miles of natural gas transmission, gathering and storage pipeline and 6,000 miles of electric transmission lines. Dominion operates the nation's largest natural gas storage facility with 975 billion cubic feet of storage capacity and serves retail energy customers in 11 states. For more information about Dominion, visit the company's Web site at http://www.dom.com/.

About Babcock & Brown Infrastructure Fund North America:

Babcock & Brown Infrastructure Fund North America (BBIFNA) is a San Francisco-based infrastructure fund that owns and manages energy and infrastructure companies throughout North America. Investors in BBIFNA include public, employee and other pension plans and insurance companies located throughout North America and Europe. BBIFNA owns Trans Bay Cable, a 400- megawatt high-voltage direct current electric submarine cable connecting the city of Pittsburg, Calif., and San Francisco. BBIFNA also owns an interest in ICS Logistics, a leading operator of break bulk sea ports in Florida, Louisiana and Alabama. In addition, BBIFNA is a member of a Babcock & Brown consortium that owns the controlling interest (80 percent) of the Natural Gas Pipeline of America (NGPL) and partners with Knight Inc. (formerly Kinder Morgan), which also serves as the 20 percent partner and asset operator.

This release contains certain forward-looking statements, including our forecasted operating earnings for 2008 and 2009, that are subject to various risks and uncertainties. Factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations may include factors that are beyond the company's ability to control or estimate precisely, such as fluctuations in energy-related commodity prices, the timing of the closing dates of acquisitions or divestitures, estimates of future market conditions, estimates of proved and unproved reserves, the company's ability to meet its natural gas and oil production forecasts, the timing and receipt of regulatory approvals necessary for planned projects, acquisitions and divestitures, and the ability to complete planned construction or expansion projects as scheduled. Other factors include, but are not limited to, weather conditions, including the effects of hurricanes on operations, the behavior of other market participants, state and federal legislative and regulatory developments and changes to environmental and other laws and regulations, including those related to climate change, economic conditions in the company's service area, risks of operating businesses in regulated industries that are subject to changing regulatory structures, changes to regulated gas and electric rates collected by Dominion, changes to rating agency requirements and ratings, changing financial accounting standards, trading counter-party credit risks, risks related to energy trading and marketing, and other uncertainties. Other risk factors are detailed from time to time in Dominion's most recent quarterly report on Form 10-Q or annual report on Form 10-K filed with the Securities & Exchange Commission.

SOURCE: Dominion

CONTACT: Media, Mark Lazenby, +1-804-819-2042, Mark.Lazenby@dom.com, or
Ryan Frazier, +1-804-819-2521, C.Ryan.Frazier@dom.com, both of Dominion; or
Analysts, Laura Kottkamp, +1-804-819-2254, Laura.E.Kottkamp@dom.com, for
Dominion

Web site: http://www.dom.com/