Dominion Announces Third-Quarter 2006 Earnings

-Company affirms 2006 earnings guidance

-Conference call scheduled for 10 a.m. EST today

Nov 1, 2006

November 1, 2006

RICHMOND, Va. – Dominion (NYSE: D) announced today unaudited net income determined in accordance with Generally Accepted Accounting Principles (GAAP) for the three months ended Sept. 30, 2006 of $654 million ($1.85 per share) compared to net income of $15 million (4 cents per share) for the same period last year.

Operating earnings for the three months ended Sept. 30, 2006 amounted to $662 million ($1.87 per share) compared to operating earnings of $373 million ($1.08 per share) for the three months ended Sept. 30, 2005. Operating earnings are defined as GAAP earnings adjusted for certain items.

Dominion uses operating earnings as the primary performance measurement of its earnings outlook and results for public communications with analysts and investors. Dominion also uses operating earnings internally for budgeting, reporting to the board of directors and for the company’s annual incentive plan. Dominion management believes operating earnings provide a more meaningful representation of the company’s fundamental earnings power.

Business segment results and detailed descriptions of items included in 2006 and 2005 GAAP earnings but excluded from operating earnings can be found on Schedules 1, 2 and 3 of this release.

Thomas F. Farrell II, president and chief executive officer, said:

“Even after normalizing for our receipt of business interruption insurance proceeds and mark-to-market gains, our third quarter operations were outstanding. Our nuclear fleet achieved a 99.9 percent capacity factor this quarter, excluding a planned refueling outage, and our large utility coal assets continued their record performance with an equivalent availability factor of 92.3 percent.

“Dominion Retail has added more customers year to date than in any other comparable time period. We also broke ground on the Cove Point expansion in Maryland, a project which will nearly double the send-out and current storage capacity of the plant upon its completion in 2008.

“While we are fortunate that the hurricane season to date has been a mild one, we had some damage from Tropical Storm Ernesto in our electric utility service area. We have recorded a cost of 3 cents per share in the third quarter and estimate an additional 1-cent per share impact in the fourth quarter. We are confirming our full-year 2006 operating earnings guidance of $5.05 to $5.25 per share, although we would expect actual earnings to fall between the low end of the range and the mid-point, assuming normal weather in the fourth quarter.”

In providing 2006 operating earnings guidance, the company notes that there could be differences between expected GAAP and operating earnings for matters such as, but not limited to, divestitures or changes in accounting principles. Dominion management is not able to estimate the impact, if any, of these items on GAAP earnings. Accordingly, Dominion is not able to provide a corresponding GAAP equivalent for operating earnings guidance.


Third-quarter 2006 operating earnings compared to 2005

Third-quarter 2006 operating earnings of $1.87 per share compares to $1.08 per share in the third quarter of 2005. The increase is primarily attributable to the receipt of business interruption insurance proceeds, lower unrecovered Virginia fuel expenses, higher contributions from the company’s merchant generation and producer services businesses, as well as increased gas and oil production revenue, partially offset by the impact of comparatively milder temperatures in the electric utility service area, lower sales of emissions allowances, and restoration expenses following Tropical Storm Ernesto.

Complete details of third-quarter 2006 operating earnings compared to 2005 can be found on Schedule 5 of this release.


Fourth-quarter 2006 operating earnings assumptions

In the fourth-quarter 2005, Dominion reported GAAP earnings of 74 cents per share and operating earnings of $1.02 per share. Fourth-quarter 2006 drivers that are expected to compare favorably to fourth-quarter 2005 include higher contributions from the company’s merchant generation business, increased gas and oil production and lower unrecovered Virginia fuel expenses. Expected offsets include lower margins in the E&P business and the absence of a mark-to-market benefit from hedges de-designated following the 2005 hurricanes.

Dominion’s fourth-quarter 2006 operating earnings assumptions compared to 2005 can be found on Schedule 6 of this release.


Conference call today

Dominion will host its third-quarter earnings conference call at 10 a.m. EST on Wednesday, Nov. 1, at which time Dominion management will discuss third quarter financial results, the status of the company’s strategic review and other matters of interest to the financial community.

Domestic callers should dial (866) 710-0179. The passcode for the conference call is “Dominion.” International callers should dial (334) 323-9871. Participants should dial in 10 to 15 minutes prior to the scheduled start time. Members of the media also are invited to listen.

A live Web cast of the conference call will be available on the company’s investor information page at http://www.dom.com/investors/.

A replay of the conference call will be available beginning about 1 p.m. EST Nov. 1 and lasting until 11 p.m. EST Nov. 8. Domestic callers may access the recording by dialing (877) 919-4059. International callers should dial (334) 323-7226. The PIN for the replay is 91201400. Additionally, a replay of the Web cast will be available on the company’s investor information page by the end of the day Nov. 1.

Dominion is one of the nation's largest producers of energy, with a portfolio of about 28,000 megawatts of generation, about 6.6 trillion cubic feet equivalent of proved natural gas reserves and 7,800 miles of natural gas transmission pipeline. Dominion also operates one of the nation's largest underground natural gas storage systems with about 950 billion cubic feet of storage capacity and serves retail energy customers in eleven states. For more information about Dominion, visit the company's Web site at http://www.dom.com/.

This release contains certain forward-looking statements including our earnings guidance for 2006 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 may include factors that are beyond the company's ability to control or estimate precisely, such as fluctuations in energy-related commodity prices, including changes in the cost of fuel for our regulated electric business, the timing of the closing dates of acquisitions or divestitures, additional risk exposure associated with the termination of business interruption and offshore property damage insurance related to our exploration and production operations and our inability to replace such insurance on commercially reasonable terms, estimates of future market conditions, estimates of proved and unproved reserves, the company’s ability to meet its natural gas and oil production forecasts, the behavior of other market participants, and the effects of hurricanes on our operations, gas and oil production and realized prices. Other factors include, but are not limited to, weather conditions, governmental regulations, economic conditions in the company's service area, risks of operating businesses in regulated industries that are subject to changing regulatory structures, changes to regulated gas and electric rates collected by Dominion, changes to rating agency requirements and ratings, changing financial accounting standards, trading counter-party credit risks, risks related to energy trading and marketing, and other uncertainties. Other risk factors are detailed from time to time in Dominion’s most recent quarterly report on Form 10-Q or annual report on Form 10-K filed with the Securities & Exchange Commission.

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CONTACTS:    
Media: Mark Lazenby, 804-819-2042  
     
Analysts: Joseph O'Hare, 804-819-2156
Laura Kottkamp, (804) 819-2254


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