Dominion Power 2010 Annual Report Download - page 18

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regulated company, our dividend payout ratio should
more closely track that of our regulated peer utilities.
While all dividend declarations are subject to board
approval, in light of the 60 to 65 percent payout policy
and our earnings growth expectations, you should
expect dividend increases to remain consistent with 5
to 6 percent earnings growth in 2012 and beyond.
We strongly believe that growth in our core regu-
lated businesses fuels the need for a dividend increase
— even in a year in which operating earnings per share
could fall from the previous year. Among the reasons:
First, remember that the company views 2011 as
an anomaly. We expect commodity prices — and,
consequently, New England power prices — to hit a
bottom. We expect to refuel all three of our merchant
nuclear reactors, tie in two cooling towers to two units
at Brayton, and perform maintenance on turbines at
the gas-fired Fairless Energy facility near Philadelphia,
which has operated more than expected because of low
natural gas costs. Second, consistent with the 2006
plan to transform Dominion, we are changing the
profile of investment in our company.
Dominion believes that rewarding those who
own our company and are a large part of its success is
important. In sum, our board agrees that increasing the
dividend is the right thing to do.
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In what has been a year of change —and for Domin-
ion, five years of change — your company continued
its transformation into a more regulated company, a
company whose earnings are less tied to the vagaries
of the commodity markets and more to constructive
regulatory structures that recognize the need to build
infrastructure now to meet future demand. We have
met earnings targets and increased the dividend. We
have sold operations that did not fit what we see as
part of the Dominion of tomorrow.
While last year was a great year, 2011 could be a
tough one. But our employees and shareholders have
confidence that Dominion will rise to the challenge.
During the five years of Dominion’s transforma-
tion, we did what we said we would do, and did it
well — thanks in large part to our 16,000 employees
and your confidence in our transformation and growth
plan. You have good reason to remain confident in
your company’s direction.
In 2011, this new Dominion will build on five
years of stable, predictable earnings, a solid dividend,
and promises fulfilled. We are poised to grow, and do
so holding steadfast to our core values.
Sincerely,
7KRPDV ) )DUUHOO ,,
Chairman, President and CEO