Dominion Hope Reaches Settlement In Purchased Gas Adjustment Cases

-Settlement submitted to West Virginia Public Service Commission
-Commission Staff and Consumer Advocate sign agreement
-Would reduce customer bills by 26.1 cents per mcf

September 17, 2007

Clarksburg, W.Va. – Dominion Hope today announced an agreement with the state’s Consumer Advocate Division and the staff of the West Virginia Public Service Commission that resolves all of the outstanding issues in two open purchased gas adjustment cases.

The settlement was submitted to the West Virginia Public Service Commission (PSC) for its approval.

The settlement resolves issues raised by Dominion Hope and the three other settling parties in connection with two gas cost recovery proceedings for fiscal years ending 2005 and 2006. Among other issues, Dominion had disagreed with a $3.8 million disallowance for natural gas taken out of storage and delivered to customers. Dominion will pay approximately $2.3 million to resolve these issues and is entitled to $864,395 for 2006 interest that was also in dispute.

The $2.3 million would go directly to Dominion Hope customers, reducing their rates by 26.1 cents per thousand cubic meters (mcf) for the winter, from Nov. 1, 2007, through March 31, 2008.

“Dominion agreed to this settlement so that these historical gas cost issues could finally be resolved,” said Thomas Farrell, Dominion chairman and chief executive officer. “This should move the sale of Dominion Hope closer to final consideration.”

Dominion, the parent company of Dominion Hope, is in the process of selling two natural gas utilities, Dominion Hope in West Virginia and Dominion Peoples in Pennsylvania, to Equitable. The sale of Dominion Peoples has been approved by the Pennsylvania Public Utility Commission. An attempt by the Federal Trade Commission to block the Dominion Peoples sale was denied by a U.S. District judge. The FTC has appealed to the Third U.S. Circuit Court of Appeals, and a decision on the appeal is expected in October.

Dominion Hope is participating in a PSC hearing where allegations by a former Hope employee of improper purchasing of natural gas supplies are being examined. Dominion Hope has supplied the Public Service Commission and other parties to the proceedings with an independent outside audit of its natural gas purchasing practices.

The audit report revealed that Hope’s natural gas purchasing practices were appropriate and that, in the case of one transaction between Dominion Hope and Dominion Field Services that had been called in to particular question, Dominion Hope bought natural gas supplies for less than it would have been able to do so on its own. The audit was conducted by Ernst & Young, an internationally recognized auditing and accounting firm.

Dominion is one of the nation’s largest producers of energy, with a portfolio of more than 26,500 megawatts of generation. Dominion serves retail energy customers in 11 states. For more information about Dominion, visit the company’s Web site at http://www.dom.com.

 

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Media:

Dan Donovan, 412-237-2900 or 412-951-1080 (mobile)