Dominion Power 2004 Annual Report Download - page 22

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D 2004/Page 20
Bottom line—right
assets, right price,
right market.
Station, both in Massachusetts. We also
acquired the 426-megawatt combined-
cycle natural gas-fired Manchester
Street Station in Rhode Island. These
acquisitions are expected to be
immediately profitable and neutral to
our balance sheet.
With our existing Millstone Power
Station, they give us the ability to offer
competitive and customized power pack-
ages including base-load, intermediate
and peaking capacity. By early this year,
we had placed 60 percent of this output
under contract for 2005.
Bottom line—right assets, right price,
right market.
Another important addition to our
merchant generating fleet took
place in mid-2004, when we placed our
1,096-megawatt, natural gas-fired
Fairless Energy station into commercial
operation in eastern Pennsylvania.
Adding these facilities increases our
generating capacity by about 15 percent,
from about 24,400 megawatts at the
beginning of 2004 to about 28,100
megawatts at the start of 2005.
Hit: Expanding The Crown
Jewel, Dominion Cove Point
Some have used the term “crown jewel”
of U.S. liquefied natural gas facilities to
describe our Dominion Cove Point LNG
facility, which is managed by our
Dominion Energy operating unit. The
facility overlooks the Chesapeake Bay
in Maryland.
Last year, we began designing
facilities to increase the plant’s daily
sendout capacity from 1 Bcf per day
to 1.8 Bcf per day. Storage capacity at
the terminal would increase to approxi-
mately 14.6 Bcf by 2008, if the plans are
approved by federal regulators.
Along with the expansion plan, we
announced a binding agreement with
Statoil—a major Norwegian oil and gas
producer and LNG exporter—to purchase
all the expanded capacity for 20 years
after service begins in 2008.
At the same time, demand for tradi-
tional, underground natural gas storage
remains strong. Accordingly, we’ve
invested $145 million to increase our
existing natural gas storage by about 15
Bcf in the mid-Atlantic and Northeast
regions. The investments also will add
corresponding increases in our pipeline
capacity.
Hit: Avoiding Overhang with
“Equity on Demand”
Opportunities to add assets at prices that
add immediately to the bottom line don’t
come around often. Companies can’t time
them to their convenience. So when
opportunity has knocked, we’ve moved
ahead, even when we’ve had to issue
new shares of common stock to fund the
purchase.
Some have used the
term “crown jewel”
of U.S. liquefied
natural gas facili-
ties to describe
our Dominion Cove
Point LNG facility.