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Executive Speech

Remarks – Thomas F. Farrell II
Chairman, President & CEO

North Anna Power Station Unit 3
COL News Conference
Nov. 28, 2007

Good afternoon, and thank you for coming.

We invited you here today to announce that Dominion has taken an important step to meet Virginia’s future energy needs, while simultaneously protecting the environment.

Yesterday - November 27 - Dominion became the nation’s first investor-owned electric utility to file a complete application with the Nuclear Regulatory Commission for a combined Construction and Operating License – known as a COL – for a possible third reactor at the North Anna Power Station in Louisa County.

The COL application was submitted under guidelines established by the U.S. Department of Energy’s Nuclear Power 2010 program, a joint government and industry cost-sharing effort that addresses a range of issues affecting the potential expansion of nuclear power in the U.S.

The COL unites into one step the federal regulatory approvals required for construction and operation of a new nuclear unit. 

Its purpose is to resolve all construction and operational issues before construction begins – a major advance in streamlining a highly complex and lengthy permitting process.

We started this process in 2003, when Dominion filed with the NRC for an Early Site Permit for a new reactor at the North Anna site.  The ESP is designed to resolve all safety, environmental and emergency preparedness issues.

I am pleased to report that last week the NRC approved our application for an Early Site Permit at North Anna.  Dave Christian, Dominion’s Chief Nuclear Officer, will have more to say about that permit in a few minutes.

With yesterday’s filing of the COL application, we completed the last federal requirement needed to bring the benefits of new nuclear generation to our Virginia customers – including low-cost, reliable electric power that is carbon free and environmentally friendly.

Dominion firmly believes that advanced nuclear technology can and must play a leading role in reducing carbon emissions and the release of greenhouse gases into the atmosphere.

Here in Virginia, Governor Kaine and the General Assembly have taken important steps to promote nuclear as a reliable, safe and economic energy source for the Commonwealth.

The Governor’s 10-year Energy Plan includes nuclear power in the mix of resources that will be required to meet Virginia’s future energy needs, along with natural gas, clean coal, renewable energy sources and conservation measures.

In fact, Virginia’s Energy Plan recognizes that the Commonwealth has … “an opportunity to be the leader in nuclear energy”… among the 50 states.

The General Assembly has done its part as well.  This past spring, lawmakers overwhelmingly passed comprehensive legislation to re-regulate Virginia’s electric utilities.  This law included financial incentives and other valuable support for building new nuclear generating capacity within our state’s borders.  The re-regulation act is an important endorsement by the General Assembly of nuclear power’s vital role in achieving a secure energy future for Virginia.

I want to make it clear that without this change in law we would not be gathered here today.  Without the innovative changes in our regulatory system, Dominion would not be building this station.

The future does indeed look bright for Virginia.  Our state has one of the most robust economies in the nation.  In fact, the Commonwealth ranks first in the area of high-tech job growth, led by Northern Virginia, Richmond and Hampton Roads.

Rapid economic growth is good news for the Commonwealth, but it presents special challenges for Dominion as the largest energy provider in the state.

Energy demand in our service area is projected to increase by more than 4,000 megawatts over the next decade.  That is the equivalent of adding one million homes to those we already serve.  A strong economy requires more energy to support its continued growth.  And growth means more jobs, more tax revenues and more financial resources with which to address community needs.

The key question confronting the Commonwealth is:  Where will the additional power come from to sustain this growth?

According to the U.S. Energy Information Administration, Virginia already imports more power from outside its borders than any state except California.

We can begin to rectify that imbalance with a comprehensive approach that combines conservation and efficiency programs with renewable energy sources and new, economic and environmentally sound base-load generation.  This strategy will give Virginia more control over its own destiny by relying less on volatile energy supply markets.  It also supports the state’s 10-year Energy Plan.

Assuming we obtain a favorable ruling from the NRC on our COL application in 2011*, Dominion could break ground on North Anna 3 that same year.  The target date for commercial operation of the new reactor would then be 2016-17*.  Regulatory bodies in Virginia and North Carolina must also approve the new reactor before construction can begin.

I want to emphasize that completion of the federal licensing process gives Dominion the option to build and operate a new reactor at a specific site.  It does not obligate us to do so. 

We have not made a final decision about building North Anna 3.  We still have hurdles in front of us.  But adding new base-load generating capacity requires extensive long-term planning and significant capital investment.  The time to prepare for the future is now.

Keeping the nuclear option on the table gives Dominion the flexibility we need to respond efficiently and effectively to the energy challenges that lie ahead.  It also helps promote a balanced and diverse energy supply, ensures reliable electric service and stable prices for our customers, and protects environmental quality.

We simply cannot afford to overlook the benefits that nuclear power has to offer.

I am now going to ask Dave Christian to come forward to talk about some of the technical aspects of North Anna 3.  Following Dave’s comments, we will answer any questions you may have.

*These dates reflect a schedule change announced in April 2008.


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