Dominion Power 2004 Annual Report Download - page 15

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Despite the interim
fuel-cost challenge
I described earlier,
a critical long-term
goal is to operate
this business
to hedge our fuel
exposure at
Dominion Virginia
Power.
D 2004/Page 13
because we can run these wells, drilling
rigs, compressor stations and pipelines
with more predictability than is typical in
the E&P business. They produce more
than 40 percent of Dominion’s total pro-
duction. Our drilling success rate at our
gas factories is in excess of 90 percent.
By comparison, the industry success rate
for an exploratory well is typically
about four out of ten. Our gas factories
have the added advantage of spreading
production across a large number of
inexpensive wells with long lives—the
opposite of most offshore fields.
Why Bother Going Offshore?
The answer is stronger growth prospects
and potentially higher returns on invest-
ment. To minimize our risks, we choose
our areas carefully, partner with other
established companies and keep to strict
financial targets.
We are not a stand-alone E&P com-
pany. Despite the interim fuel-cost chal-
lenge I described earlier, a critical long-
term goal is to operate this business to
hedge our fuel exposure at Dominion
Virginia Power. Over time, it is expected
to counterbalance increasingly volatile
energy prices that have become a fact of
life. This should allow us to provide
steady earnings and cash flow for the
entire Dominion enterprise.
Chesterfield
Clover
Mecklenburg
Elwood State Line
Brayton Point
Salem Harbor
Troy
Manchester
Dresden
Pleasants
Pittsylvania
Armstrong
Morgantown Mt.Storm
Bremo
Gaston Roanoke Rapids
Kincaid
Millstone
Fairless Energy
Gordonsville
Ladysmith
Yorktown
Surry
Elizabeth River
Rosemary
Chesapeake
Remington
Kewaunee
North Anna
Bath
Possum
Point
Current Generation Portfolio (Major Dominion Operations)
Coal
Hydro
Natural Gas
Nuclear
Oil / Gas Capacity at Plant
Wood
Natural Gas
Nuclear
Existing
Generation Stations
New Generation
Planned/
Under Development
Planned
Acquisitions
Brayton Point, Salem Harbor and Manchester Street power stations were acquired January 1, 2005. Rosemary Power Station was acquired February 8, 2005.