Dominion Power 2009 Annual Report Download - page 20

18 Dominion 2009
More than 90 percent of Dominion’s planned growth
capital investments are in the category of regulated
assets and, as such, would afford us the opportunity
to earn competitive authorized rates of return. More
than half of these regulated projects would qualify
for premiums on top of base returns on equity. Cash
recovery mechanisms are also in place for timely re-
imbursement of financing costs incurred during the
multi-year construction periods.
Financing Construction With Prudent Balance of Debt,
Equity These planned regulated growth assets will
serve customers and shareholders, in many cases,
for 40 or more years. During the construction period
we must obtain capital to finance the expendi-
tures. We intend to do so in a balanced manner,
issuing both debt and equity in amounts appropri-
ate to maintain our financial profile.
Through this period of significant capital investment,
we expect to meet earnings and dividend payout tar-
gets, and maintain appropriate credit ratings. We an-
ticipate an estimated $400 million in planned equity
needs in 2010. We expect to eliminate this need to is-
sue common stock by using after-tax proceeds gained
from our plans to monetize Marcellus Shale, which I
will discuss later in this letter. The company plans to
buy shares to satisfy employee savings plans and
direct stock purchase plans, including our dividend
reinvestment plan, among other programs, through
market purchases.
Reducing Debt, Maintaining Strong Credit Ratings In
addition to E&P, other asset sales have played, and
are expected to play, an important part of our trans-
formation.
In early 2010, we completed our long-planned sale of
Dominion Peoples, the natural gas distribution com-
pany in Pennsylvania serving about 359,000 homes
and businesses. The sales price was approximately
$780 million, adjusted for changes in working
capital, capital expenditures as well as affiliate
borrowings, yielding approximately $542 million
in after-tax proceeds. The proceeds were used to
reduce debt. We ended our effort to sell Dominion
Hope, our natural gas distribution company in
West Virginia that serves about 117,000 customer
accounts. Following a decision by that state’s regu-
latory authority to deny the sale, we reintegrated
Dominion Hope into our remaining broader natural
gas distribution business.
Through this period of significant capi-
tal investment, we expect to meet earn-
ings and dividend payout targets, and
maintain appropriate credit ratings.
Crews constructing an
electric transmission tower
in Virginia’s fast-growing
service area.
In 1959, Systems Operator
J.B. Korte worked at a new
computer in the Systems
Operation Center (SOC). The
map board measured 6 feet
by 14 feet.
Today’s SOC has state-of-the-
art systems and practices
in analysis and training that
were company standards
before they became industry
standards.
Electric power transmission
expansion is a critical part of
our business plan.