June 19, 2008

RICHMOND, Va. – Dominion Virginia Power today presented an aggressive energy conservation plan that would produce significant environmental benefits while providing customers with substantial cost savings.

"This plan will provide a jump-start toward meeting the 10 percent conservation goal enacted last year by the Virginia General Assembly and the governor, getting the Commonwealth more than one-third of the way there within five years," said David A. Heacock, president of Dominion Virginia Power. "It will provide significant environmental benefits in a cost-effective manner that translates into very real financial savings to customers."

The conservation plan is part of Dominion’s "Powering Virginia" strategy to meet the future energy needs of its customers.  The plan must be approved by the Virginia State Corporation Commission.  The company hopes to begin implementing programs next year.  Company leadership approved the plan and related investment last week.

A key component of the plan is the installation of "smart grid" technologies that will enhance the electric distribution system to meet the increasing needs and expectations of customers in the 21st Century. The smart grid will allow energy to be delivered more efficiently and will result in significant energy savings by allowing more precise control of the energy flow.  Dominion expects to invest about $600 million and replace all of its existing electric meters with Advanced Metering Infrastructure (AMI), capable of two-way communications, as well as additional equipment to monitor and control the electric distribution system. 

The resulting fuel savings for customers will more than offset the cost of the new equipment. The technology also is expected to lead ultimately to improvements in service reliability and the ability of customers to monitor and control their electricity use. Over the next 15 years the plan is expected to result in customer savings in excess of $1 billion through lower electricity use, avoiding the need for two future power stations and delaying the need for two others.

However, the demand from Dominion Virginia Power customers for reliable, around-the-clock electricity that can be provided only by power stations still exists and is projected to grow by 4,000 megawatts over the next decade.  The company is pursuing a balanced mix of new generating facilities, including wind and other renewables, emissions-free nuclear, advanced-technology coal and natural gas.  It will also improve transmission and other infrastructure to ensure continuation of reliable service and maintain the growth of Virginia’s economy.

"This is a significant step toward meeting Virginia’s electricity conservation goal in a way that will deliver real and measurable benefits," Heacock said. "We plan to develop additional initiatives aimed at reaching the full 10 percent goal by the 2022 target in a cost-effective manner."

Along with installing "smart grid" technology, programs in the plan introduced today include:

• Incentives for construction of energy-efficient homes that meet the federal government’s Energy Star® standards. These homes are at least 15 percent more energy efficient than homes built to regular standards.
• Incentives for residential and commercial customers to install energy-efficient lighting. This includes a continuation of Dominion’s rebate program for compact fluorescent light bulbs (CFLs), which already has resulted in the sale of more than 1.5 million CFLs.
• Energy audits and improvements for homes of low-income customers.
• Incentives for residential customers who enroll voluntarily to allow the company to cycle their air-conditioners and heat pumps during periods of peak demand.
• Power cost monitors that display how much electricity customers are using and at what cost.
• Incentives for residential customers to upgrade heat pumps to more efficient units or have their heat pumps maintained, or “tuned,” to run more efficiently.
• Incentives for commercial customers to improve the energy efficiency of their HVAC units and for agreeing to reduce demand during times of peak consumption.
• Incentives for a refrigerator turn-in program that will allow residential customers who have second refrigerators at least 20 years old to be hauled away and disposed of at no charge.

Recent improvements in electric system management technologies and incentives for energy efficiency by customers are expected to avoid carbon dioxide emissions by about 12 million tons over 15 years, compared with what would have been emitted otherwise. That is the equivalent of removing more than 130,000 cars from the road. Additional reductions of emissions of sulfur dioxide, nitrogen oxides and mercury are also expected.

Electricity savings could reach 2.6 million megawatt-hours annually by 2013 under the proposal, equal to the amount of electricity used by 216,000 typical homes.

"This is a great example of Dominion partnering with consumers and sharing the opportunity to reduce energy demand," said the Rev. Doug Smith, executive director of the Virginia Interfaith Center for Public Policy.  "The efficient distribution through Dominion’s new smart grid will help us all to use responsibly the resources we share and will help reduce our reliance on fossil fuels.

"Consumers want to be in control of their energy consumption.  That’s why we turn off the lights when we leave the room.  Dominion is giving consumers the tools to allow us to be better stewards of our power consumption and ultimately God’s creation," Smith said.

Additional information will be available when the company files the plan with the SCC.  In addition to these program plans, Dominion is evaluating other energy conservation and demand reduction initiatives, including new rate designs to provide better pricing signals to customers, as well as other emerging technologies that leverage our "smart grid" investment and will allow customers to better understand and manage the energy costs of individual appliances such as air conditioners, electric strip heating and water heaters.  These technologies will also support the integration of on-site customer generation and future plug-in hybrid vehicles.

Dominion Virginia Power is a subsidiary of Dominion (NYSE: D), one of the nation's largest producers of energy, with a portfolio of approximately 26,500 megawatts of generation.  Dominion serves retail energy customers in 11 states. For more information about Dominion and the proposed conservation program, visit the company's Web site at http://www.dom.com.

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