Dominion and The Nature Conservancy:
Partnering to Protect Vital Ecosystems

Remarks of
Eva Teig Hardy
Senior Vice President - Dominion
To the
Corporate Council
The Nature Conservancy
Charleston, West Virginia

December 7, 2000

Thank you, Ben. And thank you, ladies and gentlemen. It's a pleasure for me to join you tonight.

Special thanks to Paul Trianosky and the Nature Conservancy for inviting me to address the Corporate Council.

I want to applaud all of you and the companies you represent for your efforts to help the Nature Conservancy preserve the last great places of West Virginia - a state that is incredibly rich in natural beauty and recreational opportunities.

It's a real honor to add Dominion's name to the roster of corporations that are partnering with the Nature Conservancy to safeguard this state's natural heritage.

Before I get too far ahead of myself, I want to take a moment to introduce three of my colleagues from Dominion who accompanied me to Charleston. They are:

• Pam Faggert, vice president and chief environmental officer;
• Marjorie Grier, director of corporate philanthropy; and
• Dave Spigelmyer, director of state affairs.

And, of course, Ben Hardesty, the general manager of Dominion Exploration & Production, which is based in Jane Lew and is part of our oil and gas exploration and production unit. As a native of the Mountain State and an avid outdoorsman, Ben is well acquainted with the West Virginia Highlands.

I want to take this opportunity to congratulate Ben on his recent election to the Nature Conservancy's Board of Trustees. It's an excellent choice, and I know Ben is very honored to serve on the Board.

I also want to thank Jamie Serino of The Nature Conservancy for bringing along the photos of the Bear Rocks property.

Bear Rocks was Dominion's first partnering initiative with the West Virginia chapter. I'll be coming back to that story in just a few minutes.

Before I discuss Bear Rocks, however, I want to spend a little time talking about Dominion's views on environmental stewardship to provide a context for the Bear Rocks story.

As a company that makes, moves, manages and markets energy, our operations inevitably have an impact on the environment.

Those of you who are members of the Corporate Council know very well how challenging it can be to integrate business performance with responsible environmental stewardship.

At Dominion, our basic approach is to look for opportunities within those challenges to pursue our business goals in a manner that's consistent with our commitment to protect the environment.

I give people like Jamie Serino and Michael Lipford of the Virginia Chapter of The Nature Conservancy a lot of credit for working with us to find those kinds of opportunities.

For the past 20 years, we have collaborated with the Virginia chapter of the Nature Conservancy on a variety of innovative land acquisition, stewardship, research and educational programs - from the Blue Ridge Mountains to the Chesapeake Bay.

The positive experiences resulting from that partnership have taught us a great deal about our own corporate values… about the principles of sustainability… and about the Nature Conservancy and what it stands for.

In my view, the key to the success of our partnership is mutual respect and a shared belief that the environment and the economy are highly interdependent, not irreconcilably opposed.

John Sawhill, the late national president of The Nature Conservancy, expressed that view eloquently and often.

About 10 years ago, Mr. Sawhill gave a speech to The Business Council in Hot Springs, Virginia. Among other things, he told the audience that our nation would never be successful in cleaning up the environment without sustained real growth in per capita income.

He and The Nature Conservancy - unlike some other environmental organizations - recognized that business has a vested interest in working for a healthy environment.

He understood that environmental integrity supports new enterprises and ensures the future well being of the communities where our customers live.

Mr. Sawhill also recognized that healthy economic growth, which improves living standards for all, enables the private sector to help protect critical natural resources and achieve sustainable development.

That is precisely the balanced, rational and "real world" approach found at The Nature Conservancy. It's what makes the organization so effective in working constructively with the private sector to preserve the diversity of the natural world.

In a nutshell, The Nature Conservancy's emphasis on sound science and partnership fits beautifully with Dominion's approach: finding solutions that benefit the environment and the communities we serve.

Our longstanding involvement with the Virginia chapter provided a strong foundation for building a comparable relationship with the West Virginia chapter of The Nature Conservancy.

I think Paul Trianosky and the rest of the West Virginia chapter would agree that the Bear Rocks donation got us off to a very good start.

Bear Rocks, as you know, is a 477-acre tract of remarkable land that Dominion donated earlier this year to The Nature Conservancy. It is adjacent to the Dolly Sods Wilderness and Scenic Areas in the Canaan Valley region. The story behind the donation is an interesting one. Bear Rocks represents a major environmental milestone for both Dominion and The Nature Conservancy.

It's also a great example of how a major corporation and a leading environmental organization can partner effectively to protect a vital ecosystem.

My hope is that by relating the Bear Rocks story, I might pass along some insights that could prove useful to this group as you explore the possibilities for other mutually beneficial partnerships.

It was actually Michael Lipford, director of the Virginia Nature Conservancy, who approached us in the summer of 1999 about a possible donation of the Bear Rocks property. But the story goes back a lot farther than that - almost 10 years to be exact.

It was 1990 when Virginia Power first received a formal request from the West Virginia chapter of The Nature Conservancy regarding a possible donation of Bear Rocks - which bordered properties already under the protection of the U.S. Forest Service and The Nature Conservancy.

The addition of Bear Rocks to the Dolly Sods area, the Monongahela National Forest and Canaan Valley State Park would place the entire upper Red Creek watershed under conservation ownership - a goal of The Nature Conservancy dating back to the 1960s.

Virginia Power considered the request but respectfully turned it down, citing the importance of potential coal and other mineral reserves on the property for our nearby Mount Storm Power Station.

But that was only the first chapter of the story - a story whose moral could easily be "If at first you don't succeed, try, try again."

Because that's exactly what The Nature Conservancy did. They never let us forget about their interest in Bear Rocks.

Finally, in July of 1999, Michael Lipford asked to meet with us to discuss various potential partnership opportunities - one of which was Bear Rocks. Others included initiatives to protect mature pine forests, the red-cockaded woodpecker and wetlands in Southeastern Virginia.

In the course of that wide-ranging discussion, we agreed to re-evaluate our position on Bear Rocks.

I'm convinced that our deep respect for The Nature Conservancy and our track record of positive experiences with the organization provided the impetus for us taking yet another look.

What followed was about a six-month period of intensive analysis.

We brought in our real estate professionals, tax experts, accountants, engineers, scientists and yes, lawyers.

They studied mineral and surface rights, conducted property surveys and appraisals, performed environmental assessments, and analyzed tax codes, among other things.

Ben Hardesty and his people got involved, too, because Dominion Exploration & Production owned the natural gas rights to the property.

To make a long story short, a variety of groups within the Dominion family of companies participated in the process - all bringing different points of view to the table.

It was during this multi-faceted evaluation that an interesting transformation began to take place. I can best describe it as a subtle but perceptible shift in outlook. Obstacles began to look like opportunities. The glass became half full instead of half empty.

I'm sure all of you have had a similar experience: When you change your focus, you start seeing things in an entirely different light.

It took a lot of communication, a lot of behind-the-scenes hard work - and in the end, recognition that Bear Rocks was an important part of West Virginia's natural heritage and should be protected as such for this and future generations.

This was not a decision taken lightly or arrived at easily. But I think the evolution in Dominion's thinking grew out of two things:

• First, the trust and respect we have for The Nature Conservancy - along with the full support of our chairman, Tom Capps;
• And second, the value we place in partnership as the best means of achieving our mutually supportive goals of economic growth and environmental quality.

We know of no organization more dedicated to the cause of land conservation, or more capable of protecting Bear Rocks and West Virginia's other natural treasures than The Nature Conservancy.

As I mentioned earlier, the Bear Rocks donation marks our first involvement with the West Virginia chapter of The Nature Conservancy. But Dominion is no stranger to West Virginia.

From 1925 to 1987, our corporate ancestors - including Virginia Public Service Company, Vepco and then West Virginia Power - provided retail electric service to the residents of five counties in southeastern West Virginia.

We currently own and operate the Mount Storm Power Station in Grant County - the largest coal-fired station in our system - as well as the North Branch Power Station, which is located about six miles from Mount Storm.

We're also co-owner and operator of Morgantown Energy Associates, a coal-fired co-generation facility that produces electricity for Monongahela Power Company and steam for West Virginia University.

Ben Hardesty's company, Dominion Exploration & Development, is among West Virginia's three largest independent natural gas producers, with more than 300 billion cubic feet of reserves and more than 4,000 producing wells in West Virginia.

Our corporate presence in West Virginia took a major step forward when we completed a merger with Consolidated Natural Gas Company earlier this year.

Through Dominion Hope - formerly Hope Gas, based in Clarksburg - we now provide retail natural gas service to 32 West Virginia counties.

We're also active in natural gas transmission and storage through our Dominion Transmission subsidiary - formerly CNG Transmission - which is also headquartered in Clarksburg.

In addition to these existing operations, we have announced plans for significant new investments in pipelines, power facilities and natural gas drilling in West Virginia - not to mention a major environmental protection upgrade at the Mount Storm Power Station. You may have read or heard about the landmark agreement we signed last month with the U.S. Environmental Protection Agency.

In the most ambitious and far-reaching environmental commitment ever made by a Virginia corporation, Dominion agreed to invest more than one billion dollars over a 12-year period to improve the air quality in Virginia and West Virginia.

That means our coal-fired power stations - including Mount Storm in Grant County - will achieve significant environmental improvements while continuing to meet our customers' needs for electric power.

It also means those stations, many of which are in rural areas, will continue to play an important role in their communities - producing not only electricity, but significant tax dollars and jobs as well.

Helping protect the environment is one important way we invest in the communities where we do business. But it's not the only way.

We have a long history of using our dollars, company volunteers and community partnerships to enhance the quality of community life. We channel our resources into five key areas:

• Health and human services;
• Cultural activities;
• Education;
• Economic development; and
• Environmental protection.

Whether it's supporting youth programs at the Mountaineer Council of the Boy Scouts, sponsoring a golf tournament to benefit the Medbrook Children's Charity, or funding an engineering endowment at West Virginia University, active participation in community life is integral to our corporate citizenship initiatives.

Dominion is proud to be one of West Virginia's corporate citizens. And we look forward to building on our tradition of service as we expand our presence in the Mountain State.

We also look forward to working with the Corporate Council and the West Virginia chapter of The Nature Conservancy in any way we can to develop sustainable policies and programs that promote the well being of our communities - and the responsible use of our natural resources.

I want to thank you again for the opportunity to share the Dominion story. It's been a pleasure being with you tonight.

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