Dominion Reaches Agreements on Purchases of
Generating Stations
RICHMOND, Va. - Under two separate transactions,
Dominion Virginia Power, the electric utility subsidiary of Dominion (NYSE:
D), will acquire an approximately 80-megawatt, wood-burning generating facility
in Hurt, Va., and a 310-megawatt, gas-fired generating facility in Chesapeake,
Va. Dominion will pay approximately $49 million in cash and assume or pay off
each facility's long- term debt and associated costs of approximately $148 million
for both facilities and their long-term power purchase agreements.
The Hurt facility, which consists of two units,
is owned by Multitrade of Pittsylvania County, L.P. The Chesapeake facility,
which consists of three simple-cycle, combustion turbine generators, is owned
by Chickahominy River Energy Corp., a subsidiary of NRG Energy Inc., and James
River Energy Co., a subsidiary of Dynegy Inc.
The generation from both facilities has been
sold to Dominion Virginia Power under 25-year power purchase contracts, which
will be terminated at closing, and are expected to result in an after-tax charge
of approximately $90 million to $110 million. Under Dominion ownership, the
facilities will continue to serve Dominion's electric customers in Virginia
and North Carolina. Dominion's purchase of the stations is consistent with its
continuing efforts to lower the cost of long-term power purchase contracts with
non-utility generators. The expected accretion from these purchases is included
in Dominion's current earnings guidance.
Because of greater-than-expected proceeds from
Dominion's Customer Stock Purchase Program and options exercised in conjunction
with executive stock loan repayments announced in May, these transactions will
not require additional equity issuances.
Dominion expects to close on both sales in the
fourth quarter of this year. The transactions are subject to regulatory approval,
including the Virginia State Corporation Commission and Federal Energy Regulatory
Commission, and, in the case of the Multitrade acquisition, certain bondholder
consents.
Dominion is one of the nation's largest producers
of energy, with an energy portfolio of more than 24,000 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 5.3 million retail energy customers in nine
states. For more information about Dominion, visit the company's Web site at
www.dom.com.
