Dominion Power 2008 Annual Report Download - page 22

20 Dominion 2008
Strong Service Area in Virginia Has Unique Characteristics. Ear-
lier I said we had the good fortune to serve an economically durable service
area in Virginia.
According to the latest independent projections, the Commonwealth is
expected to need more than 4,000 megawatts of new power supply over the
next decade—enough to power 1 million new homes and businesses.
Demographics explain why, beginning with Virginia’s extraordinary
military infrastructure. Base closures and reassignments around the U.S.
have resulted in more military personnel being shifted to Virginia. Growth in
personnel stationed at two major military facilities, Fort Lee in the Richmond
area and Fort Belvoir in Northern Virginia, for example, will create significant
new demand.
Virginia is also a global hub of Internet activity, with more than
50 percent of the nation’s Web traffic flowing through 36 data centers in
Northern Virginia. These centers require a great deal of power—each
the equivalent of nearly 9,000 average household customers. More than a
dozen additional data centers are on the drawing board.
We also have lower exposure than our utility peers to the reduced elec-
tricity consumption expected this year from energy-intensive industrial users.
About 12 percent of our sales came from industrial customers in 2008.
Constructive Utility Regulation in Virginia. Equally important to our
outlook is the constructive nature of Virginia’s utility regulation.
Under laws enacted in 2007, Virginia Power is now able to fully recover
the costs of natural gas, coal, uranium and other fuels used in power
facilities. Projected fuel costs can be passed through to customers dollar-for-
Virginia law allows your company to
apply to recover the financing costs of qualified
generation facilities as they are incurred—
a critical consideration for investors looking
for timely cost recovery.