December 20, 2004
RICHMOND, Va. – Dominion Virginia Power, the electric utility subsidiary of Dominion (NYSE: D), has reached an agreement to purchase a 181-megawatt, combined-cycle electric generating facility in Roanoke Rapids, N.C.
Dominion will pay approximately $40.2 million in cash and assume or pay off the facility’s long- term debt and associated costs of approximately $60.5 million. The station, which is known as Panda, is owned by Panda-Rosemary LP, a jointly owned partnership of Panda Rosemary LLC and PRC II LLC. Dominion expects to close on the acquisition late in the first quarter of 2005.
The power station consists of two, dual-fuel combustion turbines and a steam turbine and typically operates during periods of high electricity demand. The output from the station is sold to Dominion Virginia Power under a 25-year contract, which expires in 2016.
The transactions are subject to regulatory approval, including the Virginia State Corporation Commission, the North Carolina Utilities Commission and the Federal Energy Regulatory Commission. Approval also must be obtained under the Hart Scott Rodino Act.
Dominion’s purchase will result in an estimated after-tax charge of approximately $40 million to $45 million and will reduce Dominion’s pre-tax capacity payments to non-utility generators by approximately $18 million per year for the period 2005-2015.
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 eight 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 Panda-Rosemary LP, which is a partnership jointly owned by Panda Rosemary, LLC and PRC II, LLC, 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.