Dominion Closes on Purchase of Northeast Power Stations

Jan 3, 2005
7:00am

January 3, 2005

RICHMOND, Va. – Dominion (NYSE: D), one of the nation’s largest producers of energy, closed on its purchase of three Northeast power stations from USGen New England Inc. effective Jan. 1, increasing its electricity-generating portfolio by 10 percent to about 28,340 megawatts.

The $642-million acquisition was part of a bankruptcy court-supervised divestiture of USGen New England's fossil assets.

Dominion purchased the 1,599-megawatt coal- and oil-fired Brayton Point Station in Somerset, Mass.; the 745-megawatt coal- and oil-fired Salem Harbor Station in Salem, Mass.; and the 495-megawatt, natural gas-fired Manchester Street Station in Providence, R.I.

About 60 percent of the combined output from the three stations is being sold under contracts to various buyers, with the balance being sold into the NEPOOL wholesale market.

Dominion did not acquire any of the facilities' debt in the transaction and plans to finance the acquisition with a combination of debt and equity that will be balance sheet neutral. The equity associated with the acquisition was part of the forward sale of equity completed last September. Dominion expects the transaction to be accretive immediately.

Dominion is one of the nation's largest producers of energy, with an energy portfolio of about 28,340 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 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 USGen New England assets 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.


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