Dominion Power 2005 Annual Report Download - page 24

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22 Dominion 2005
4.7 percent. New service connections are climbing steadily
at a rate of about 2.5 percent a year. While meeting this
increase, our employees improved electric service reliability
by 8 percent compared to 2004.
•Second, substantial pipeline and storage expansions are
under way at our Cove Point LNG facility in Maryland. Once
completed in mid-2008, total storage capacity at the site
will increase by more than 80 percent, to 14.6 billion cubic
feet. We also are adding to our profitable underground natu-
ral gas storage system. Storage and pipeline expansions
are under way in West Virginia, New York and Pennsylvania.
With federal regulatory approval, service will come online
beginning in 2008.
•Third, we expect natural gas exploration and production
growth of 5 to 6 percent annually on average from 2006
through at least 2008. That growth is significant. It will
occur as existing long-term contracts for sales at yester-
day’s lower prices expire and are replaced at current, higher
market prices. We lock in prices for a portion of our natural
gas and oil production to generate a stable stream of
cash flows and earnings and to lower our exposure to the
boom-and-bust cycles of energy markets. We will continue
this hedging strategy going forward, but we expect to have
more production available for sale in today’s higher-price
commodity markets.
A Major Commitment to the Environment
Late last year, we announced new plans to lead in efforts to
improve air quality. Our commitment to responsible environ-
mental stewardship is ongoing.
As outlined in the announcement, Dominion will invest
$500 million to reduce emissions at our coal-fired generat-
ing units serving Virginia between 2006 and 2015. This
major investment in clean air follows more than $2 billion
we already have spent or committed to spend since the
1990s to upgrade the environmental performance of our
coal stations serving Virginia. Once completed, Dominion’s
coal-fired units serving Virginia will have cut sulfur dioxide
emissions by an average of more than 80 percent, nitrogen
oxide by 74 percent, and mercury emissions by about 86
percent from 2000 levels.
Late last year, we announced new
plans to lead in efforts to improve
air quality. Our commitment to
responsible environmental steward-
ship is ongoing.
Potential Earnings Benefit of
ro tri ers
Illustrative only—not drawn to scale.
Based on forward commodity prices
as of February 2006.
o e Point E ansion
el eset
Pri e lift in e Englan
E P ega e ge oll off
EP Pro tion ro t
rgani ro t