Dominion News Releases

March 17, 2000

Dominion Bid for New York Nuclear Stations is Higher Than Competing Offer

Richmond,Va.; – Dominion (NYSE: D), the nation’s top nuclear operator, said today that its offer to acquire two New York Power Authority nuclear stations provides $946 million in direct economic value to the authority — 17 percent above a competing offer of $806 million by Entergy Corporation (NYSE: ETR).

On March 10, the deadline for final offers, Dominion submitted the bid to acquire NYPA’s Indian Point 3 and James A. FitzPatrick nuclear stations.

If speculative economic benefits of Dominion’s offer are added, the offer’s total value to NYPA and New York consumers is $1.52 billion. By contrast, if speculative economic benefits of Entergy’s offer are added, the Entergy offer provides only $1.32 billion in direct and speculative value. Included in each company’s estimate of speculative economic benefit is the establishment of a regional office headquartered in New York, which Entergy’s release valued at $300 million.

Last night, a subsidiary of Entergy issued a release asserting that it has made a superior offer of $1.42 billion in both direct and speculative economic benefits.

Thos. E. Capps, president and chief executive officer, said:

"For the record, I want to compare apples to apples. If Entergy’s total value provides $1.42 billion in total benefits, Dominion’s offer provides $1.52 billion. But it’s absolutely essential to note that Entergy’s most recent news release mistakenly adds $100 million in phantom value."

Capps noted:

• The statement asserts that Entergy will provide an additional $92 million as part of an initial obligation to begin funding future decommissioning expenses — in addition to allowing NYPA to reduce its decomissioning obligation by $50 million. In fact, the Entergy offer on record to fund decommissioning expenses offers $92 million in lieu of a $50 million reduction.

• Further, Entergy’s actual commitment to provide only $92 million in decommissioning expenses is effective beginning only in 2008, cutting by more than half the value of the commitment in today’s dollars.

• In addition, the statement claims that an offer by Entergy to sell additional output at the FitzPatrick plant extends through 2004, when their official offer of March 10 states a date of 2003. Thus, Entergy’s claim of value is inflated by approximately $12 million.

By correcting for these discrepancies, Entergy’s offer provides only $1.32 billion in direct and speculative value, or $200 million less than Dominion’s offer.

Notwithstanding these discrepancies, Dominion’s offer provides significantly higher value for three reasons:

• Its offer to pay $946 million for the physical facilities and their fuel;

• An enhanced value sharing agreement, which would share profits with NYPA should market power prices exceed projected levels. The Dominion proposal would provide an additional $169 million in speculative value to NYPA, compared to Entergy’s revised proposal to provide only $35 million in additional speculative value.

• Additional value sharing should Dominion acquire additional nuclear facilities in New York totaling up to $100 million.

Capps said:

"We’re offering more money. We’re the better, safer and more efficient nuclear operator and better home for NYPA employees. We’re financially stronger with a better credit rating and stronger standing in the financial community. We’re proposing a superior value sharing agreement. And we have a large presence in and a commitment to growth in New York as a competitive energy provider."

Capps added:

"Among points that clearly set Dominion above and apart from Entergy or any other nuclear operating company are these:

• "Dominion’s two nuclear power stations have consistently achieved the top ranking for performance excellence from the Institute of Nuclear Power Operations (INPO). North Anna has had five consecutive top rankings since 1991 and Surry four consecutive since 1993. Safety and superior performance go hand-in-hand.

• "Our nuclear power stations are among the safest in the country. Their average score for the last three periods of the Nuclear Regulatory Commission’s Systematic Assessment of Licensee Performance (SALP) reports was 1.22, with 1.0 being the best possible rating. Entergy’s was not as good at 1.58. The Authority should expect nothing less from any bidder than a singular focus on nuclear safety.

• "Our nuclear employees have been with the company for an average of 16 years. We value experience and leadership throughout our ranks, spot future leaders, and train them to maintain a high level of accountability. Our units do not operate themselves: It takes dedicated employees who are proud of their accomplishments.

• "Dominion is experienced in bringing other employees into the family in ‘seamless’ fashion with regards to benefits and pensions. Whether we have acquired businesses as far away as the United Kingdom and South America or as nearby as Illinois and New York, we are deeply experienced and mindful of the importance of swiftly addressing the basic concerns of our newest employees – growth opportunities, compensation, benefits, insurance and pension plans. We have met with many of the Authority’s employees at both stations and at White Plains. We were extremely impressed with them."

The acquisition would be immediately accretive to earnings.

Dominion, headquartered in Richmond, Va., is the largest fully-integrated natural gas and electric power provider in the U.S. The company serves 4 million retail gas and electric customers in five states. It has 20,000 megawatts of electric generating capacity, with an additional 6,000 megawatts currently under development. Dominion is also one of the largest independent oil and natural gas exploration and production companies in North America, with 3 trillion cubic feet of reserves.

###