Dominion, JPMorgan Unveil Innovative $1.45 Billion New Loan Facility

May 29, 2003

RICHMOND, VA - Dominion and JPMorgan today closed a unique $1.45 billion revolving credit facility that features a new pricing mechanism expected by both companies to win widespread popularity, attract more lenders to the market and serve as a model for future unsecured short-term credit for investment grade companies.

Under the new pricing mechanism, interest payments for Dominion and its Virginia Electric and Power Co. (Dominion Virginia Power) utility subsidiary will be adjusted by reference to bond market pricing if they draw down their credit lines. This is the first time widely-distributed, syndicated loan facilities for investment grade companies have linked the level of bank interest payments to bond market credit spreads. This new facility will backstop Dominion's commercial paper programs. Dominion would only draw on the facility in the event that the commercial paper market were unavailable to the company.

Officials at Dominion, one of the nation's largest natural gas and electric power companies, said its financial strength and its willingness to take a market leading position to expand capacity for the credit facilities persuaded them to support the novel concept known as "Relative Value Pricing SM" (RVP SM). Dominion believes that this structure, which is beneficial to both borrowers and lenders, will become a market standard feature in the investment grade syndicated loan market. RVP SM was developed by JPMorgan.

"This innovative technique will help transform the syndicated loan market because it further provides a relative value link between the syndicated loan market and other capital markets," said G. Scott Hetzer, Dominion senior vice president and treasurer.

Under RVP SM, the $1.25 billion senior unsecured revolving 364-day credit facility for Dominion and the $200 million three-year senior unsecured revolving facility for Dominion Virginia Power will link interest payments under the facilities to the then current yield on the companies' preselected bonds, bounded by a range determined by the applicable ratings. The facilities were more than 30 percent over-subscribed at closing, obtaining commitments from a wide-range of lenders.

Dominion and its subsidiaries carry investment grade ratings. Dominion is rated BBB+ and Baa1 by Standard and Poor's and Moody's Investor Services, respectively, while Dominion Virginia Power is rated BBB+ and A3. Factoring in relative value, lenders obtain pricing based on prevailing market conditions at the time of drawing, while the ceiling limits the issuer's downside risk.

"Calibrating the borrowers' spreads to market based levels at the time of a drawdown attracts more potential lenders because they will be better compensated in the event a borrower's credit strength and ratings were to fall," said Susan Stevens, a JPMorgan managing director. "Dominion's foresight in coming to market with a novel pricing structure should boost capacity for facilities of this type since the interest rates will be more directly linked to the market movements of a company's credit spreads."

JPMorgan is administrative agent and joint bookrunner for both facilities. Barclays Capital is a joint lead arranger and joint bookrunner on the $1.25 billion facility; Bank of America Securities is a joint lead arranger and joint bookrunner on the $200 million facility.

J.P. Morgan Chase & Co. is a leading global financial services firm with assets of $755 billion and operations in more than 50 countries. The firm is a leader in investment banking, asset management, private banking, private equity, custody and transaction services, and retail and middle market financial services. A component of the Dow Jones Industrial Average, JPMorgan Chase is headquartered in New York and serves more than 30 million consumer customers and the world's most prominent corporate, institutional and government clients. Information about JPMorgan Chase is available on the Internet at www.jpmorganchase.com.

Dominion (NYSE: D) is one of the nation's largest producers of energy, with a portfolio consisting of 24,000 megawatts of generation, 6.1 trillion cubic feet equivalent of natural gas reserves, 7,900 miles of natural gas transmission pipeline and more than 960 billion cubic feet of storage capacity. Dominion also serves 5 million natural gas and electric customers in nine states. In addition, Dominion owns a managing equity interest in Dominion Fiber Ventures LLC, owner of Dominion Telecom. Additional information about Dominion is available on the Internet at www.dom.com.

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CONTACTS:    
Dominion: Hunter A. Applewhite, 804-819-2043  
     
J.P. Morgan Chase & Co.: Michael Dorfsman, 212-270-7317