Dominion Power 2014 Annual Report Download - page 13

DOMINION RESOURCES, INC.
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“ Our customers demand diverse, clean supplies
of electricity, and building more renewable
generation can help provide power on sunny and
windy days.”
Dianne Corsello, director of business development at
Dominion Generation
Renewables OUR RESPONSIBILITY
We are committed to safe, clean and reliable energy
and to responsible stewardship of the Earth’s resources.
For instance, Dominion installs environmental controls
on our fossil-fuel-fired generating stations to limit
emissions. Over the past five years, Dominion’s
generating fleet has seen reductions in emissions
of carbon dioxide, mercury, nitrogen oxides and
sulfur dioxide. The company plans to add nearly 775
megawatts of solar generation by 2020.
3 See page 22 for GAAP Reconciliation of 2015 Operating Earnings Guidance.2 All dividend declarations and share repurchases are subject to Board of Directors approvals.
Partnership, Acquisition Create Short-, Longer-Term Value
Dominion Midstream is a growth-oriented limited partnership
that owns all of the outstanding preferred equity interests in
Cove Point. Over the next several years, we expect Dominion
Midstream to add value to your company in myriad ways. When
we contribute an asset or business to the partnership, Dominion
will receive proceeds from the partnership that can be used to
fund growth projects and dividend payouts, reduce debt and
repurchase outstanding common shares.2 Dominion will continue
to operate those businesses and retain a percentage of their
earnings—paid to the company in distributions—as well as
incentive distributions that we expect to grow over time.
At our February 2015 meeting with analysts and investors, we
laid out Dominion Midstream’s value contributions to Dominion.
Over the next six years, we anticipate projected cash flows of
nearly $7 billion to Dominion from the partnership in the form of
cash proceeds from dropdowns and limited-partner and general-
partner distributions. Moreover, we expect that the partnership will
significantly enhance the value of your company’s stock.
By mid-2015, we expect to contribute Carolina Gas Transmission
(CGT) into Dominion Midstream. Dominion recently acquired
CGT, a gas transmission company with nearly 1,500 miles of
FERC-regulated gas pipeline in South Carolina and southeastern
Georgia. We purchased the company for about $493 million,
excluding closing adjustments, because it fits well with our
regulated natural gas businesses. CGT’s corporate culture
emphasizes safety, excellence and community involvement. CGT
also has strong growth potential because the region is thriving
economically. We have committed to increasing the pipeline’s
capacity in the coming years by more than 15 percent. We will
continue to inform you of other asset contributions as they come.
Financial Expectations for 2015
From 2015 through 2020, your company plans to spend
$19.2 billion for energy infrastructure growth projects across all
of our business lines.
We expect that our growth plan—with specific, identifiable
projects—will help achieve best-in-class operating earnings
growth in 2015 and beyond. We anticipate Dominion’s 2015
operating earnings to fall in the range of $3.50 per share to $3.85
per share.3 Over the next six years, we anticipate average annual
earning-per-share growth of 6 7 percent. Subject to quarterly
declaration by the Board of Directors, your company plans to pay
a dividend rate of $2.59 in 2015, an increase of 8 percent
from that of 2014.