RICHMOND, Va. – Dominion Virginia Power,
the electric utility subsidiary of Dominion (NYSE: D), Tuesday closed on the
purchase of a 310-megawatt, gas-fired electric generating station in Chesapeake,
Va.
The facility, which consists of three simple-cycle
combustion-turbine generators, was acquired from Chickahominy River Energy Corp.,
a subsidiary of NRG Energy Inc., and James River Energy Corp., a subsidiary
of Dynegy Inc.
Before this transaction, power from this facility
was sold to Dominion Virginia Power under a 25-year power purchase contract.
Dominion’s purchase results in an estimated after-tax charge of approximately
$35 million to $45 million and reduces Dominion’s pre-tax capacity payments
to non-utility generators by approximately $22 million per year for the period
2005-2016. The savings have been included in Dominion’s current earnings
guidance.
Under Dominion ownership, the facility, which
will be referred to as the Elizabeth River Combustion Turbine Station, will
continue to serve Dominion’s electric customers in Virginia and North
Carolina. Dominion’s purchase of the station is consistent with its continuing
efforts to lower the cost of long-term power purchase contracts with non-utility
generators.
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 nine states.
For more information about Dominion, visit the company's Web site at www.dom.com.
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This release contains forward-looking statements,
including our expectation that the acquisition of the assets of Chickahominy
River Energy Corp., a subsidiary of NRG Energy Inc., and James River Energy
Corp., a subsidiary of Dynegy Inc., 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.
