Dominion Power 2005 Annual Report Download - page 13

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Dominion 2005 11
Electric Generation
aacit Gro t
Megawatts
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
from 2004 operating earnings of $4.61. Operating earnings
excludes certain items appearing in the chart on page 25
that reconciles them to our GAAP earnings. Further details
are found in our Management’s Discussion and Analysis
on pages 27 through 51.
Our income statement on page 55 reflects $375 million
of after-tax charges attributable to the hurricanes. We expect
results to improve in 2006 when the region’s refining and
transportation infrastructure is back on line and we are able
to sell our production at market prices. We also expect pro-
ceeds from a claim on our business interruption insurance.
Also lowering our 2005 earnings were higher-than-
expected unrecoverable fuel costs at Dominion Virginia
Power. Later in this letter, I’ll update you on a scheduled
2007 adjustment to the amount our Virginia utility will
be able to collect to cover fuel expenses. That will be an
important part of our expected earnings growth.
In the interim, our resourceful employees are trimming
costs to make up for these unexpected shortfalls. Utilizing
Six Sigma quality initiatives and other process improve-
ments, they saved more than $178 million in 2005,
an 80-percent increase over savings of $99 million in the
previous year. In 2006, they will continue to manage our
costs with equal competence and intensity.
Operational Excellence and Safety
Safety remains one of our most important objectives. None
of us likes to see people hurt. I believe an accident-free
workplace is a very reliable indicator of discipline and opera-
tional excellence. Sloppy safety performance indicates a lack
of thorough planning, solid execution and attention to detail.
In 2005, we heightened our focus on accident preven-
tion and sharing best practices across business units. With
strong support from our employees, we experienced what is
most likely our best safety performance in company history.
Reportable safety incidents declined 31 percent from the
previous year. To cite one notable example from Dominion
E&P, the employee team based in Jane Lew, W. Va., has
gone more than two years without a safety incident. I call
these “pockets of excellence” in the company. We want to
deepen and expand them in 2006.
More than $800 Million in Profitable
Acquisitions Closed in 2005
You may not be aware that Dominion is the largest power
generator in New England. Thanks to an exceptional team
of dedicated employees working long hours, weekends and
holidays, we were able to close early on the $642 million