November 30, 2004
RICHMOND, Va. – Dominion Virginia Power, the electric utility subsidiary of Dominion (NYSE: D), Tuesday closed on the purchase of a 310-megawatt, gas-fired electric generating station in Chesapeake, Va.
The facility, which consists of three simple-cycle combustion-turbine generators, was acquired from Chickahominy River Energy Corp., a subsidiary of NRG Energy Inc., and James River Energy Corp., a subsidiary of Dynegy Inc.
Before this transaction, power from this facility was sold to Dominion Virginia Power under a 25-year power purchase contract. Dominion’s purchase results in an estimated after-tax charge of approximately $35 million to $45 million and reduces Dominion’s pre-tax capacity payments to non-utility generators by approximately $22 million per year for the period 2005-2016. The savings have been included in Dominion’s current earnings guidance.
Under Dominion ownership, the facility, which will be referred to as the Elizabeth River Combustion Turbine Station, will continue to serve Dominion’s electric customers in Virginia and North Carolina. Dominion’s purchase of the station is consistent with its continuing efforts to lower the cost of long-term power purchase contracts with non-utility generators.
Dominion is one of the nation's largest producers of energy, with an energy portfolio of about 25,500 megawatts of generation, 6.4 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 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 expectation that the acquisition of the assets of Chickahominy River Energy Corp., a subsidiary of NRG Energy Inc., and James River Energy Corp., a subsidiary of Dynegy Inc., 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 the expected closing date, changes in the expected adjustment to the purchase price at closing, 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.