Dominion Power 2005 Annual Report Download - page 77

Note 17. Short-Term Debt and Credit Agreements
Joint Credit Facility
We use short-term debt, primarily commercial paper, to fund work-
ing capital requirements, as a bridge to long-term debt financing
and as bridge financing for acquisitions, if applicable. The level of
our borrowings may vary significantly during the course of the year,
depending upon the timing and amount of cash requirements not
satisfied by cash from operations. In addition, we utilize cash and
letters of credit to fund collateral requirements under our commodi-
ties hedging program. Collateral requirements are impacted by
commodity prices, hedging levels and the credit quality of our com-
panies and their counterparties. In May 2005, we entered into a
$2.5 billion five-year revolving credit facility that replaced our
$1.5 billion three-year facility dated May 2004 and our $750 mil-
lion three-year facility dated May 2002. This credit facility can also
be used to support up to $1.25 billion of letters of credit. In Febru-
ary 2006, this facility was replaced by a $3.0 billion five-year credit
facility that terminates in February 2011.
At December 31, 2005, total outstanding commercial paper
supported by the joint credit facility was $1.6 billion, with a
weighted average interest rate of 4.47%. At December 31, 2004,
total outstanding commercial paper supported by previous credit
agreements was $573 million, with a weighted average interest
rate of 2.39%.
At December 31, 2005 and 2004, total outstanding letters of
credit supported by joint credit facilities were $892 million and
$183 million, respectively.
In January 2006, Virginia issued $450 million of 5.4% senior
notes that mature in 2016 and $550 million of 6.0% senior notes
that mature in 2036. Virginia Power used the proceeds from the
issuance to repay short-term debt.
CNG Credit Facilities
In August 2005, CNG entered into a $1.75 billion five-year revolving
credit facility that replaced its $1.5 billion three-year facility dated
August 2004. The credit facility supports CNG’s issuance of com-
mercial paper and letters of credit to provide collateral required by
counterparties on derivative financial contracts used by CNG in its
risk management strategies for its gas and oil production. In Febru-
ary 2006, the facility limit was reduced to $1.70 billion. At Decem-
ber 31, 2005 and 2004, outstanding letters of credit under the
facilities totaled $1.2 billion and $555 million, respectively.
We have also entered into several bilateral credit facilities in
addition to the facilities previously discussed in order to provide col-
lateral required on derivative contracts used in our risk manage-
ment strategies for merchant generation and gas and oil production
operations, respectively. Collateral requirements have increased
significantly in 2005 as a result of escalating commodity prices. At
December 31, 2005, we had the following letter of credit facilities:
Dominion 2005 75
Outstanding Facilit y Facility Facilit y
Facility Letters of Capacity Inception Maturity
Company Limit Credit Remaining Date Date
(millions)
$ 100 $ 100 $ — June 2004 June 2007
100 100 — August 2004 August 2009
550 550 — October 2004 April 2006
1,900 625 1,275 August 2005 February 2006
200 — 200 December 2005 December 2010
150 150 — September 2005 March 2006
200 200 — August 2005 February 2006
290 290 — October 2005 April 2006
$3,490 $2,015 $1,475
(1) In February 2006, the facility limit was reduced to $150 million.
(2) In February 2006, CNG replaced this facility with a $1.05 billion 364-day credit facility.
(3) This facility can also be used to support commercial paper borrowings.
(4) In February 2006, the facility limit was reduced to $215 million.
CNG
CNG
CNG(1)
CNG(2)
CNG(3)
Dominion Resources, Inc.
Dominion Resources, Inc.
Dominion Resources, Inc.(4)