Dominion News Release

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November 1, 2007

Dominion Announces Third Quarter 2007 Earnings

• Company affirms 2008 operating earnings outlook of $6.10 to $6.25 per share and at least 6 percent annual growth thereafter
• Conference call scheduled for 10 a.m. EDT today

RICHMOND, Va. – Dominion (NYSE: D) announced today earnings determined in accordance with Generally Accepted Accounting Principles (GAAP) for the three months ended Sept. 30, 2007, of $2.3 billion ($7.24 per share) compared with GAAP earnings of $654 million ($1.85 per share) for the same period last year.

Operating earnings for the three months ended Sept. 30, 2007, were $551 million ($1.72 per share) compared with operating earnings of $664 million ($1.88 per share) for the three months ended Sept. 30, 2006.  Operating earnings are defined as GAAP earnings adjusted for certain items.

Dominion uses operating earnings as the primary performance measurement of its earnings outlook and results for public communications with analysts and investors.  Dominion also uses operating earnings internally for budgeting, for reporting to the board of directors, for the company’s annual incentive plan and for its targeted dividend payouts.  Dominion management believes operating earnings provide a more meaningful representation of the company’s fundamental earnings power.

In addition to differences between GAAP and operating earnings recorded through the third quarter of 2007, the company notes that there could be differences between remaining 2007 GAAP and operating earnings for matters such as, but not limited to, divestitures. While Dominion management is currently not able to estimate precisely the impact, if any, of these items on GAAP earnings, it does expect GAAP earnings to exceed operating earnings for the year.

Business segment results and detailed descriptions of items included in 2007 and 2006 GAAP earnings but excluded from operating earnings can be found on Schedules 1, 2 and 3 of this release.

Thomas F. Farrell II, chairman, president and chief executive officer, said:

“This quarter’s performance reflects where we are going and where we have been. We completed the sale of our non-Appalachian E&P properties for approximately $13.9 billion. We were able to reduce $3.3 billion of debt and repurchase $5.8 billion of common stock with the proceeds. We also plan to use these dollars for the termination of the State Line long-term power purchase sales agreement, a transaction that is more accretive than repurchasing additional shares.

“We met a new peak demand of 19,688 megawatts in our Dominion Virginia Power service area, surpassing the old record by 300 megawatts. We raised the roofs on both expansion tanks under construction at Dominion Energy’s Cove Point facility. And, as part of our ongoing review to improve our return on invested capital, we completed the sale of our partially completed Dresden plant.

“With confidence in Dominion’s future earnings stability and the strength of our fundamentals, the board of directors increased the quarterly common stock dividend rate 11 percent to 79 cents per share and set a policy to achieve a 2010 payout ratio of 55 percent. Considering our expected operating earnings per share growth rate of 6 percent or more annually after 2008, shareholders should expect similar-sized dividend rate increases in 2009 and 2010 in order to reach our targeted payout ratio. Additionally, the board approved a two-for-one stock split that will lower the entry point for shareholders to invest in our company.

“Our ability to operate at a high standard, while unlocking trapped value across the portfolio, strengthens our belief that we are well positioned to achieve our operating earnings forecast of $6.10 to $6.25 per share next year and to grow operating earnings per share at an annual rate of at least 6 percent thereafter.”

In providing its operating earnings outlook, the company notes that there could be differences between expected 2008 GAAP and operating earnings for matters such as, but not limited to, divestitures or changes in accounting principles. At this time, Dominion management is not able to estimate the impact, if any, of these items on GAAP earnings. Accordingly, Dominion is not able to provide a corresponding GAAP equivalent for its operating earnings outlook.
 

Third-quarter 2007 operating earnings compared with 2006

Third-quarter 2007 operating earnings of $1.72 per share compare with operating earnings of $1.88 per share in the third quarter of 2006.  The decrease is primarily attributable to lower natural gas and oil production due to the sale of Dominion’s non-Appalachian E&P properties, the absence of a benefit from business interruption insurance recorded in the third quarter of 2006, lower contributions from the company’s producer services and gas transmission businesses and the nonrecurrence of gains from the sales of excess emissions allowances.  These negative drivers were partially offset by lower Virginia fuel expenses due to the reapplication of deferred fuel accounting, higher contributions from the merchant generation business, lower interest expenses and lower average common shares outstanding.  Complete details of third-quarter 2007 operating earnings compared with third-quarter 2006 operating earnings can be found on Schedules 4 and 5 of this release.

Conference call today

Dominion will host its third-quarter earnings conference call at 10 a.m. EDT on Thursday, Nov. 1.  Dominion management will discuss its third-quarter financial results as well as other matters of interest to the financial community.

Domestic callers should dial (866) 710-0179. The passcode for the conference call is “Dominion.”  International callers should dial (334) 323-9871.  Participants should dial in 10 to 15 minutes prior to the scheduled start time.  Members of the media also are invited to listen.

A live webcast of the conference call will be available on the company’s investor information page at http://www.dom.com/investors/.

A replay of the conference call will be available beginning about 1 p.m. EDT Nov. 1 and lasting until 11 p.m. EST Nov. 8.  Domestic callers may access the recording by dialing (877) 919-4059.  International callers should dial (334) 323-7226.  The PIN for the replay is 23716573.  Additionally, a replay of the webcast will be available on the company’s investor information page by the end of the day Nov. 1.

Dominion is one of the nation's largest producers and transporters of energy, with a portfolio of approximately 26,500 megawatts of generation, 7,800 miles of natural gas transmission pipeline and 1 Tcfe of proved natural gas and oil reserves. Dominion also owns and operates the nation's largest underground natural gas storage system with about 960 billion cubic feet of storage capacity and serves retail energy customers in 11 states. For more information about Dominion, visit the company's Web site at http://www.dom.com/.

This news release contains certain forward-looking statements, including our forecasted operating earnings for 2008 as well as projected future long-term operating earnings growth rates and projected dividend payout ratios, 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 may include factors that are beyond the company's ability to control or estimate precisely, such as fluctuations in energy-related commodity prices, the timing of the closing dates of acquisitions or divestitures (including our divestiture of The Peoples Natural Gas Company and Hope Gas, Inc.), estimates of future market conditions, estimates of proved and unproved reserves, the company’s ability to meet its natural gas and oil production forecasts, the behavior of other market participants, and the effects of hurricanes on our operations and realized prices. Other factors include, but are not limited to, weather conditions, governmental regulations, economic conditions in the company's service area, risks of operating businesses in regulated industries that are subject to changing regulatory structures, changes to regulated gas and electric rates collected by Dominion, risks associated with the realignment of our operating assets, changes to rating agency requirements and ratings, changing financial accounting standards, trading counter-party credit risks, risks related to energy trading and marketing, and other uncertainties. Other risk factors are detailed from time to time in Dominion’s most recent quarterly report on Form 10-Q or annual report on Form 10-K filed with the Securities & Exchange Commission.

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• Financial schedules that accompany the news release (PDF document, requires the free Adobe Acrobat Reader)