RICHMOND, Va. – Dominion Virginia Power,
the electric utility subsidiary of Dominion (NYSE: D), has reached an agreement
to purchase a 181-megawatt, combined-cycle electric generating facility in Roanoke
Rapids, N.C.
Dominion will pay approximately $40.2 million
in cash and assume or pay off the facility’s long- term debt and associated
costs of approximately $60.5 million. The station, which is known as Panda,
is owned by Panda-Rosemary LP, a jointly owned partnership of Panda Rosemary
LLC and PRC II LLC. Dominion expects to close on the acquisition late in the
first quarter of 2005.
The power station consists of two, dual-fuel
combustion turbines and a steam turbine and typically operates during periods
of high electricity demand. The output from the station is sold to Dominion
Virginia Power under a 25-year contract, which expires in 2016.
The transactions are subject to regulatory approval,
including the Virginia State Corporation Commission, the North Carolina Utilities
Commission and the Federal Energy Regulatory Commission. Approval also must
be obtained under the Hart Scott Rodino Act.
Dominion’s purchase will result in an estimated
after-tax charge of approximately $40 million to $45 million and will reduce
Dominion’s pre-tax capacity payments to non-utility generators by approximately
$18 million per year for the period 2005-2015.
Dominion is one of the nation's largest producers
of energy, with an energy portfolio of about 25,500 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 retail energy customers in eight states.
For more information about Dominion, visit the company's Web site at www.dom.com.
# # #
This release contains forward-looking statements,
including our expectation that the acquisition of the assets of Panda-Rosemary
LP, which is a partnership jointly owned by Panda Rosemary, LLC and PRC II,
LLC, will be immediately accretive, 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 include changes in the expected
closing date, changes in the expected adjustment to the purchase price at closing,
changes in capital market conditions affecting our financing of the acquisition,
and changes in our projected future capital expenditures, including environmental
expenditures. Other risks include those that affect Dominion generally, including
those that are detailed from time to time in our most recent quarterly report
on Form 10-Q filed with the Securities & Exchange Commission.
