October 31, 2005
RICHMOND, Va. - Dominion Virginia Power, the electric utility subsidiary of Dominion (NYSE: D), announced Monday that it reached an agreement in principle on Oct. 27 to restructure three power purchase contracts with subsidiaries of Cogentrix Energy Inc.
The generation from three Cogentrix coal-fired units - two in Richmond, Va., and one in Rocky Mount, N.C. -- has been sold to Dominion Virginia Power under long-term power purchase contracts that expire between 2015 and 2017.
The effectiveness of the agreement in principle is subject to the satisfaction of certain conditions. Once effective, the agreement in principle will result in total capacity payment reductions of approximately $44 million and total expected energy payment reductions of approximately $6 million over the remaining years of the contracts. The restructuring is consistent with Dominion's continuing efforts to lower the cost of long-term power purchase contracts with non-utility generators and will not result in a charge to earnings at closing.
Dominion is one of the nation's largest producers of energy, with an energy portfolio of about 28,100 megawatts of generation, about 6 trillion cubic feet equivalent of proved natural gas reserves and 7,900 miles of natural gas transmission pipeline. Dominion also operates the nation's largest underground natural gas storage system with more than 965 billion cubic feet of storage capacity and serves retail energy customers in nine states. For more information about Dominion, visit the company's Web site at www.dom.com.
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This release contains forward-looking statements including our expectations of savings that are subject to various risks and uncertainties. Discussion of 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 the timing of the effectiveness of the agreement in principle, estimates of future market conditions and commodity prices. Other factors include, but are not limited to, weather conditions, governmental regulations, economic conditions in the company's service area, fluctuations in energy-related commodity prices, including the changes in the cost of fuel for our regulated electric business, risks of operating businesses in regulated industries that are subject to changing regulatory structures, changes to regulated electric rates recoverable by the company, and other uncertainties. Other risk factors are detailed from time to time in the company's most recent quarterly report on Form 10-Q or annual report on Form 10-K filed with the Securities & Exchange Commission.