Dominion Power 2006 Annual Report Download - page 61

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Dominion Resources,Inc.
Richmond, Virginia
We have audited management’s assessment, included in para-
graphs 5-8 of the accompanying Management’s Annual Report
on Internal Control over Financial Reporting, that Dominion
Resources,Inc. (the “Company”) maintained effective internal
control over financial reporting as of December 31, 2006, based
on criteria established in Internal Control—Integrated Framework
issued by the CommitteeofSponsoring Organizations of the
Treadway Commission. As described in Management’s Annual
Report on Internal Control over Financial Reporting, manage-
ment excluded from its assessment the internal control over
financial reporting at certain special purpose entities consolidated
under Financial Accounting Standards Board Interpretation
No. 46 (revised December 2003), Consolidation of Variable Inter-
est Entities.TheCompany’s Consolidated Balance Sheet, as of
December 31, 2006, reflects $337 million of net property, plant
and equipment and $370 million of related debt attributable to
thosespecial purpose entities. Accordingly, our audit did not
include the internal control over financial reporting at those spe-
cial purpose entities. The Company’s management is responsible
formaintaining effective internal control over financial reporting
and for its assessment of the effectivenessof internal control over
financial reporting. Our responsibility is to express an opinion on
management’s assessment and an opinion on the effectivenessof
the Company’s internal control over financial reporting based on
our audit.
We conductedouraudit in accordance with the standards of
the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the
audit toobtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding
of internal control over financial reporting, evaluating manage-
ment’s assessment, testing and evaluating the design andoperat-
ing effectiveness of internal control, and performingsuch other
procedures as we considerednecessary in the circumstances. We
believe that our audit provides a reasonable basis forour opinions.
Acompany’s internal control over financial reporting is a
process designed by, or under the supervision of, the company’s
principal executive and principal financial officers, or persons
performingsimilar functions, and effected by the company’s
board of directors, management, and other personnel to provide
reasonable assurance regarding the reliability of financial reporting
and the preparationoffinancial statements forexternal purposes
in accordance with generally accepted accounting principles. A
company’s internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail,accurately and fairly reflect the
transactions and dispositions of the assetsof the company;
(2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accord-
ance with generally accepted accounting principles,and that
receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding
prevention or timelydetection of unauthorized acquisition, use,
or disposition of the company’s assets that could have amaterial
effect on the financial statements.
Because of the inherent limitations of internal control over
financial reporting, including the possibility of collusion or
improper management override of controls, material misstate-
ments due to errororfraud maynot be prevented or detected on
atimely basis. Also, projections of any evaluation of the effective-
ness of the internal control over financial reporting to future peri-
ods are subject totherisk that the controls maybecome
inadequate because of changes in conditions, or that the degree of
compliance with the policiesorprocedures may deteriorate.
In our opinion, management’s assessment that the Company
maintained effective internal control over financial reporting as of
December 31, 2006, is fairly stated, in all material respects, based
on the criteria established in Internal Control—Integrated Frame-
work issued by the CommitteeofSponsoring Organizations of
the Treadway Commission. Also in our opinion, the Company
maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2006, based on the criteria
established in Internal Control—Integrated Frameworkissued by
the CommitteeofSponsoring Organizations of the Treadway
Commission.
We have also audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States),
the consolidatedfinancial statements as of and for the year ended
December 31, 2006 of the Company and our report dated
February 28, 2007, expressesan unqualified opinion on those
financial statements and includes an explanatory paragraphrefer-
ring to changes in accounting principles.
Richmond, Virginia
February 28, 2007
60 DOMINION2006 Annual Report