Gas News Release

December 29, 2000

Rising National Market Prices Prompts Dominion Peoples To Pass Along Gas Cost Increase

PITTSBURGH - Rising national market prices, driven largely by colder-than-normal weather, will cause an average 20 percent increase in Dominion Peoples sales customers’ monthly natural gas bill, effective January 1, 2001. Dominion Peoples filed with the Pennsylvania Public Utility Commission on Friday, December 29, for the increase.

Dominion Peoples’ regular quarterly adjustment will increase the gas cost rate (GCR) from $6.20 per thousand cubic feet (MCF) to $8.24 for the months of January, February and March 2001. The average residential sales customer would pay an average of about $18 more per month for natural gas as a result of this change.

Company officials attribute the GCR increase to sharply rising market prices for natural gas. Nationally, natural gas prices have more than tripled in the last 12 months with colder-than-normal weather in November and December causing much of the increase.

Dominion Peoples does not earn any profit on the gas costs and is required to purchase the most reliable gas supply at the lowest cost available.

Warmer-than-normal weather the past two winters had depressed market prices, prompting many producers to drill fewer new wells. Less exploration and drilling activity eventually reduced the supply of natural gas on the market, while demand increased, thanks to a strong economy and colder weather. This supply/demand imbalance resulted in soaring natural gas prices, which Dominion Peoples and other distribution companies must pass along to sales customers.

“As a company, we work hard to obtain reliable natural gas supplies for our sales customers at the lowest possible prices, but national market prices have risen to unprecedented levels,” said Edgar M. Roach Jr., Dominion Peoples chief executive officer.

“We recognize that our customers face a double burden of colder weather and higher home heating costs,” Roach said. “To help customers cope with higher gas bills, Dominion Peoples offers budget and other special payment plans. We encourage customers to participate in these plans and, if needed, to seek help through the Low Income Home Energy Assistance Program (LIHEAP) and other available programs to help ensure their family’s comfort and safety this winter.”

If customers know they may need assistance in paying their bills, they should contact the company immediately by calling the toll free customer service phone number at 1-800-764-0111 to make special payment arrangements or to find out more about the various programs to help with their gas bills, Roach said.

The company also encourages customers to explore their options under the Energy Choice program, in which residential and small commercial customers can buy natural gas from a variety of different suppliers, while continuing to rely on Dominion Peoples to deliver that gas to their homes or businesses.

To help customers reduce winter energy consumption - and maximize the value of their heating dollar - Dominion Peoples also recommends customers arrange for an annual furnace inspection by a qualified, reputable heating contractor.

Dominion Peoples is a subsidiary of Dominion, which is headquartered in Richmond, Va., and serves 3.8 million retail natural gas and electric customers. For more information about Dominion, visit the company's web site at www.dom.com.