Gas News Release

January 4, 2001

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

CLEVELAND – Dramatic increases in national market prices for natural gas will cause an average 17-percent increase in Dominion East Ohio sales customers’ monthly natural gas bills, effective Jan. 30, 2001. The company’s regular quarterly adjustment, filed with the Public Utilities Commission of Ohio, will increase the gas cost recovery (GCR) rate from $7.18 per thousand cubic feet (MCF) to $8.70/MCF for the next three months. That amount is well below the current national average for natural gas prices, which now exceeds $10/MCF.

As a result of the GCR increase, the average residential customer would pay approximately $27 more per month for natural gas than the current level.

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 price increase.

The company does not earn any profit on the cost of gas, or GCR, on which it recovers costs associated with securing natural gas supplies for its customers, on a dollar-for-dollar basis. The GCR accounts for about three-fourths of a sales customer’s total bill.

Warmer-than-normal weather the past two winters had depressed market prices, prompting many natural gas producers to drill fewer new wells. Less exploration and drilling activity eventually reduced the supply of natural gas on the national market for the 2000-2001 heating season, while demand increased, thanks to a strong economy and colder weather. This supply/demand imbalance resulted in soaring natural gas prices, which Dominion East Ohio 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, that no one could have expected, even two months ago,” said Edgar M. Roach Jr., Dominion East Ohio chief executive officer.

“Our diverse portfolio of gas supplies, including gas stored underground last summer and purchases of local Ohio production, has helped us to keep prices below the national average. While some parts of the country are becoming concerned about low levels of gas in storage, Dominion East Ohio’s storage inventory is within planned levels and will ensure our reliability throughout the remainder of the winter.” Roach said.

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

If customers know they need assistance in paying their bills, they should contact the company immediately, toll-free, at 1-800-1-800-362-7557, to make necessary payment arrangements, 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 East Ohio to safely deliver that gas to their homes or businesses.

Since Oct. 1, when the company expanded Energy Choice systemwide, nearly 349,000 customers, or 29 percent of Dominion East Ohio’s 1.2 million customers, already have switched to other natural gas suppliers. Energy Choice enables customers to shop among a variety of energy suppliers for the offer that best meets their particular needs.

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

Dominion East Ohio 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.