February 26, 2008

CLEVELAND – Dominion East Ohio has filed an application with the Public Utilities Commission of Ohio (PUCO) seeking approval to implement a major natural gas pipeline replacement program. The proposed 25-year program is designed to replace nearly 20 per cent of the company's 21,000-mile pipeline system.

Dominion also wants to assume responsibility for the service lines that run from the curb to the customer’s meter. Customers currently own those service lines and are responsible for the cost for any needed repairs or replacement.

“A focused and prioritized replacement of approximately 4,100 miles of Dominion’s system is needed to ensure continued safe and reliable natural gas service to customers in the future,” said Bruce C. Klink, president, Dominion East Ohio. “The pipelines recommended for replacement are older pipelines that are either cast- or wrought-iron or bare steel pipelines that do not have the coating or corrosion protection used today.”

The total cost of the program is expected to exceed $2.6 billion in 2007 dollars. If approved, Dominion estimates that the additional cost to residential customers will be $1.12 per month beginning in November 2009. Thereafter there would be annual adjustments of no more than $0.90 per month. The program would result in approximately a 1 percent increase in annual bills. The cost to customers would be spread out over many decades because of the 25-year time frame of the replacement program and accounting that spreads those costs over an expected service life that lasts many decades.

Under its proposal, Dominion would become responsible for installing new service lines and for repairing or replacing existing service lines if they are found to be leaking. Those costs would be accumulated with the other costs of the pipeline replacement program and included in a monthly charge spread among all customers beginning late next year.

Many natural gas utilities throughout the country are implementing similar programs. The PUCO has approved an accelerated mainline replacement program at Duke Energy Ohio in Cincinnati that shares many of the same features proposed by Dominion. Among the benefits cited by the PUCO in a recent review of that program are the improvement in pipeline safety and a reduction in the cost of repairing leaks on the system. Like the Duke Energy Ohio program, Dominion will reduce the replacement program costs to be recovered by any savings from fewer leak repairs.

Dominion is asking the PUCO to consolidate the pipeline infrastructure replacement program with the company’s current rate case application to give the PUCO and other parties an opportunity to consider the two filings together.

Dominion is one of the nation's largest producers and transporters of energy, with a portfolio of approximately 26,500 megawatts of generation, 14,000 miles of natural gas transmission, gathering and storage pipeline, 6,000 miles of electric transmission lines and 1.1Tcfe of proved natural gas and oil reserves. Dominion also owns the nation’s largest underground natural gas storage system and operates more than 975 billion cubic feet of storage capacity and serves retail energy customers in 11 states. For more information about Dominion, visit the company's Web site http://www.dom.com.