Dominion Power 2011 Annual Report Download - page 13

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Outlook for 2012
Our guidance for 2012 anticipates operating
earnings in the range of $3.10 per share to $3.35
per share.* With rising energy demand, lower
interest expense, construction and operation of
new infrastructure in our regulated businesses
and continued control over operating expenses,
we expect 5 6 percent earnings per share
growth in 2012. That growth should continue
for the foreseeable future.
We expect that the dividend payout ratio will
again be near the top end of our target range
in 2012. In January 2012, the board increased
the annual dividend rate by 14 cents per share,
or 7.1 percent — to $2.11 per share, subject to
quarterly declaration. We expect our directors
to continue aligning dividend increases with
our expected earnings per share growth of
5–6 percent.**
Strong Foundation Fuels Growth Plans
Over the past five years, your company sold
commodity-based businesses to reduce earnings
volatility and strengthen our balance sheet.
Since then, we have targeted billions of dollars
in investment in federally and state-regulated
projects to meet the growing demand of our
customers and maintain system reliability.
Investor confidence in our performance and
earnings outlook is based on the fundamentals
of our business model: investing in and
maintaining energy infrastructure designed to
last for generations. Our growth comes from
a strong foundation of concrete and steel,
reinforced by the values in our culture: working
safely and responsibly, and respectfully looking
out for one another.
The strength of this foundation was affirmed
when our employees rallied to respond to two
natural disasters in August. It was also affirmed
when Dominion Resources took advantage of its
strong credit metrics and balance sheet to raise
$850 million in two separate debt issuances with
terms of three and five years — selling at interest
rates below 2 percent, among the lowest ever
recorded for U.S. holding companies. These
offerings were part of nearly $2 billion in senior
notes that Dominion issued in 2011.
Dominion did not issue any net common
stock in 2011. And, with the exception of issuing
approximately $320 million in equity through our
employee savings plans, direct stock purchase
and dividend reinvestment plan, and other
employee and director benefit plans, we do not
anticipate issuing common stock in 2012.
Building for Virginia
In 2011, we completed three major projects
for our utility customers in Virginia and North
Carolina on time and on budget. These included
the $619 million, 590-megawatt gas-fired
Bear Garden Power Station in Central Virginia,
and two 500-kilovolt transmission lines in
Northern Virginia and Southeastern Virginia,
which cost $479 million combined. Bear
Garden is now online and generating electricity.
And the Meadow Brook-to-Loudoun and
Carson-to-Suffolk transmission lines are
transporting power that flows to consumers.
Since our utility growth program began in
2007, Dominion has added more than 1,500
megawatts of generating capacity and about
300 miles of transmission lines to serve Virginia
and North Carolina customers.
Despite sluggish growth in the overall
economy, weather-adjusted power usage at
Dominion Virginia Power rose 1.6 percent in 2011.
The utility set a new peak demand record of
20,061 megawatts on July 22, 2011, surpassing
the previous record of 19,688 megawatts, set in
August 2007. Load from data centers, each of
which consumes as much electricity as 9,000
typical homes, is expected to nearly double over
the next two years. To keep the Internet up and
running 24/7, we must provide reliable electric
service to data centers 24/7.
Since 2007,
we have
added more
than 1,500
megawatts
of generating
capacity
and about
300 miles of
transmission
lines.
* See page 22 for GAAP Reconciliation of 2012 Operating
Earnings Guidance.
** All dividend declarations are subject to Board of Directors approval.