November 22, 2005

RICHMOND, Va. – Dominion (NYSE: D), one of the nation’s largest energy producers, announced Tuesday that it plans to spend about $500 million to install additional emissions controls on coal-fired power stations in Virginia.

The installation of equipment to reduce sulfur dioxide, nitrogen oxide and mercury emissions is to meet stringent new emissions reductions required by the federal Clean Air Interstate and Mercury rules. The new equipment will be installed between 2008 and 2015.

"Dominion is proud of its long history of environmental stewardship," said Thomas F. Farrell II, president and chief operating officer. "Today, we are setting a new standard in our pledge to be a leader nationally in the effort to improve air quality."

The proposed new environmental controls follow more than $2 billion Dominion has invested or committed to since the 1990s in clean air improvements in Virginia through lowered emissions. The vast majority of these expenses have been borne by the company — not customers — because of capped rates.

"Thanks to the vision of the General Assembly in passing the Virginia Electric Utility Restructuring Act of 1999, Virginians are reaping a truly extraordinary benefit of significantly cleaner air and continued electric reliability with virtually no impact on customer rates for 17 years," Farrell said.

As part of the Virginia legislature’s effort to restructure the electric utility industry, Dominion in 1999 agreed to freeze its base rates at 1993 levels through 2010. Fuel rates were capped in 2004 until July 2007 when state law allows only one adjustment to reflect projected fuel costs through 2010.

Speaking at the Chesterfield Power Station where a new scrubber to remove sulfur dioxide is being installed, Farrell’s announcement makes good on a pledge by Dominion to the 2005 Virginia General Assembly to support and implement the requirements of the Clean Air Interstate and Clean Air Mercury rules.

"While others may fight these regulations, Dominion is already taking steps to aid the health of all Virginians, improve the vistas from the Blue Ridge Mountains, and help restore the Chesapeake Bay," Farrell said.

With completion of all of the environmental construction by 2015, Dominion will have reduced its SO2 emissions by an average of more than 80 percent for all of its coal-fired units that serve Virginia. Nitrogen oxide emissions will decrease by 74 percent and mercury emissions by about 86 percent from 2000 levels.

"What’s amazing is that we will accomplish these large reductions in emissions while Virginia’s economy continues to grow and demand for electricity over the next decade increases by 30 percent," Farrell said.

Specifically, control equipment installed by Dominion will reduce annual emissions of:

• SO2 from 272,650 tons in 2000 to nearly 54,000 tons in 2015.
• NOx from 93,300 tons to nearly 28,400 tons in the same period.
• Mercury from 2,100 pounds to about 270 pounds, also in the same period.

Chesterfield Power Station near Richmond is an excellent example of the work Dominion is undertaking to clean the air in Virginia. The six-unit, 1,660-megawatt power station is the largest fossil-fueled power station in Virginia, with four units operating on coal and two primarily on natural gas. The station is critical to meeting the growing electric needs of central Virginia and produces enough electricity to power more than 800,000 homes.

The company already has installed systems to reduce nitrogen oxide emissions on three of Chesterfield’s four coal units. Dominion has begun construction on a scrubber for the largest unit, and it will be in operation in 2008.

Plans call for scrubbers on the other three coal units at Chesterfield to be in operation in 2010. In addition, Dominion will construct a bag house, which will reduce particulate emissions on Unit 6.

When fully operational, Chesterfield will achieve the following reductions:

• Greater than 95 percent in SO2 (from more than 67,500 tons in 2000 to about 5,000 tons by 2012).
• 80 percent in NOx (from 16,600 tons to 3,300 tons).
• 90 percent in mercury (from 436 pounds to 44 pounds).

Similar construction projects are planned for Dominion’s Chesapeake Energy Center on the Elizabeth River in Chesapeake and Yorktown Power Station on the York River in Yorktown. Dominion plans to install scrubbers on Chesapeake Units 1, 2, 3 and 4 by 2010. The company plans to construct scrubbers on Yorktown Unit 1 by 2010 and on Yorktown Unit 2 by 2015.

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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