Dominion Power 2003 Annual Report Download - page 77

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75.Dominion 2003
Dominion has established trusts dedicated to funding the
future decommissioning of its nuclear plants. At December 31,
2003 the aggregate fair value of these trusts, consisting primarily
of debt and equity securities, totaled $1.9 billion.
At December 31, 2002, Dominion had recognized an accu-
mulated provision for decommissioning activities of $1.5 billion.
This amount was recognized under prior accounting policies and
is reported as an asset retirement obligation on the Consolidated
Balance Sheet at December 31, 2002.
16. Short-Term Debt and Credit
Agreements
Joint Credit Facilities
In May 2003 and 2002, Dominion, Virginia Power and CNG
entered into two joint credit facilities that allow aggregate
borrowings of up to $2 billion. The facilities include a $1.25 bil-
lion 364-day revolving credit facility that terminates in May
2004 and a $750 million three-year revolving credit facility that
terminates in May 2005. The 364-day facility includes an option
to extend any borrowings for an additional period of one year
to May 2005. These joint credit facilities are being used for work-
ing capital, as support for the combined commercial paper pro-
grams of Dominion, Virginia Power and CNG and other general
corporate purposes. The three-year facility can also be used to
support up to $200 million of letters of credit. Dominion expects
to renew the 364-day revolving credit facility prior to its maturity
in May 2004.
At December 31, 2003, total outstanding commercial paper
supported by the joint credit facilities was $1.44 billion, with a
weighted average interest rate of 1.20%. At December 31, 2002,
total outstanding commercial paper supported by previous credit
agreements was $1.2 billion, with a weighted average interest
rate of 1.71%.
At December 31, 2003 and 2002, total outstanding letters of
credit supported by the three-year facility were $85 million and
$106 million, respectively.
CNG Credit Facility
In August 2003, CNG entered into a $1 billion 364-day revolving
credit facility that terminates in August 2004. This credit facility is
being used to support CNG’s issuance of commercial paper and
letters of credit to provide collateral required by counterparties on
derivative financial contracts used by CNG in its risk manage-
ment strategies for its gas and oil production. At December 31,
2003, outstanding letters of credit under this facility totaled $820
million. At December 31, 2002, outstanding letters of credit under
the previous facility totaled $500 million.
In January 2004, CNG entered into a $200 million letter of
credit agreement to support the issuance of a letter of credit to
provide collateral required by a counterparty on derivative finan-
cial contracts used by CNG in its risk management strategies for
its gas and oil production. The agreement terminates in May
2004 and is not expected to be renewed.