Dominion Closes on Acquisition of North Carolina Power Station

February 8, 2005

RICHMOND, Va. – Dominion Virginia Power, a subsidiary of Dominion (NYSE: D), closed Tuesday on its purchase of a 181-megawatt, combined-cycle electric generating facility in Roanoke Rapids, N.C.

Dominion paid approximately $40.2 million in cash and assumed the facility’s long-term debt and associated costs of approximately $60.5 million. The station, which will be known as Rosemary Power Station, was purchased from Panda-Rosemary LP, a jointly owned partnership of Panda Rosemary LLC and PRC II LLC.

The power station consists of two dual-fuel combustion turbines and a steam turbine and typically operates during periods of high electricity demand. The output from the station was being sold to Dominion Virginia Power under a 25-year contract, which would have expired in 2015.

Dominion’s purchase will result in an estimated after-tax charge of approximately $40 million to $45 million and will reduce Dominion’s pre-tax capacity payments to non-utility generators by approximately $18 million per year for the period 2005-2015, resulting in net after-tax savings of $5 million in 2005. The net savings are already incorporated in Dominion's 2005 earnings guidance.

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 960 billion cubic feet of storage capacity and serves retail energy customers in eight 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 expectation that the acquisition of the assets of Panda-Rosemary LP, which is a partnership jointly owned by Panda Rosemary, LLC and PRC II, LLC, will be immediately accretive, 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 include, changes in capital market conditions affecting our financing of the acquisition, and changes in our projected future capital expenditures, including environmental expenditures. Other risks include those that affect Dominion generally, including those that are detailed from time to time in our most recent quarterly report on Form 10-Q filed with the Securities & Exchange Commission.


 

 

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