Edgar Filing: DOMINION RESOURCES INC /VA/

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company

Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Commission File Number	Exact name of registrants as specified in their charters, address of principal executive offices and registrants’ telephone number	I.R.S. Employer Identification Number
001-08489	DOMINION RESOURCES, INC.	54-1229715

001-02255	VIRGINIA ELECTRIC AND POWER COMPANY	54-0418825

120 Tredegar Street

Richmond, Virginia 23219

(804) 819-2000

State or other jurisdiction of incorporation or organization of the registrants: Virginia

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Dominion Resources, Inc. Yes x No ¨ Virginia Electric and Power Company Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Dominion Resources, Inc. Yes x No ¨ Virginia Electric and Power Company Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Dominion Resources, Inc.

Virginia Electric and Power Company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Dominion Resources, Inc. Yes ¨ No x Virginia Electric and Power Company Yes ¨ No x

At March 31, 2014, the latest practicable date for determination, Dominion Resources, Inc. had 581,608,183 shares of common stock outstanding and Virginia Electric and Power Company had 274,723 shares of common stock outstanding. Dominion Resources, Inc. is the sole holder of Virginia Electric and Power Company’s common stock.

This combined Form 10-Q represents separate filings by Dominion Resources, Inc. and Virginia Electric and Power Company. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Virginia Electric and Power Company makes no representations as to the information relating to Dominion Resources, Inc.’s other operations.

COMBINED INDEX


		Page Number
	Glossary of Terms		3

	PART I. Financial Information

Item 1.	Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		53
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		65
Item 4.	Controls and Procedures		66

	PART II. Other Information

Item 1.	Legal Proceedings		67
Item 1A.	Risk Factors		67
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		68
Item 5.	Other Information		68
Item 6.	Exhibits		69

PAGE 2

GLOSSARY OF TERMS

The following abbreviations or acronyms used in this Form 10-Q are defined below:


Abbreviation or Acronym		Definition
AFUDC		Allowance for funds used during construction

AMR		Automated meter reading program deployed by East Ohio

AOCI		Accumulated other comprehensive income (loss)

AROs		Asset retirement obligations

ARP		Acid Rain Program, a market-based initiative for emissions allowance trading, established pursuant to Title IV of the CAA

ASLB		Atomic Safety and Licensing Board

ATEX line		Appalachia to Texas Express ethane line

bcf		Billion cubic feet

Blue Racer		Blue Racer Midstream, LLC, a joint venture with Caiman

BOD		Board of Directors

BP		BP Wind Energy North America Inc.

Brayton Point		Brayton Point power station

BREDL		Blue Ridge Environmental Defense League

CAA		Clean Air Act

Caiman		Caiman Energy II, LLC

CAIR		Clean Air Interstate Rule

Carson-to-Suffolk line		Virginia Power 60-mile 500 kV transmission line in southeastern Virginia

CEO		Chief Executive Officer

CERCLA		Comprehensive Environmental Response, Compensation and Liability Act of 1980

CFO		Chief Financial Officer

CO₂		Carbon dioxide

COL		Combined Construction Permit and Operating License

Companies		Dominion and Virginia Power, collectively

Cooling degree days		Units measuring the extent to which the average daily temperature is greater than 65 degrees Fahrenheit, calculated as the difference between 65 degrees and the average temperature for that day

Cove Point		Dominion Cove Point LNG, LP

Cove Point LNG Facility		An LNG import/regasification and storage facility located on the Chesapeake Bay in Lusby, Maryland

CSAPR		Cross State Air Pollution Rule

CWA		Clean Water Act

D.C.		District of Columbia

DEI		Dominion Energy, Inc.

Dominion		The legal entity, Dominion Resources, Inc., one or more of its consolidated subsidiaries (other than Virginia Power) or operating segments or the entirety of Dominion Resources, Inc. and its consolidated subsidiaries

Dominion Gas		The legal entity, Dominion Gas Holdings, LLC, one or more of its consolidated subsidiaries or operating segment, or the entirety of Dominion Gas Holdings, LLC and its consolidated subsidiaries

Dominion Midstream		The legal entity, Dominion Midstream Partners, LP and its wholly-owned subsidiary, Cove Point GP Holding Company, LLC

Dominion NGL Pipelines, LLC		The owner of the 58-mile G-150 pipeline project , which is designed to transport approximately 27,000 barrels per day of NGLs from Natrium to an interconnect with the ATEX line of Enterprise near Follansbee, West Virginia

DRS		Dominion Resources Services, Inc.

Dth		Dekatherm

DTI		Dominion Transmission, Inc.

DVP		Dominion Virginia Power operating segment

East Ohio		The East Ohio Gas Company, doing business as Dominion East Ohio

Elwood		Elwood power station

Energy Capital Partners		A private equity firm with offices in Short Hills, New Jersey and San Diego, California

Enterprise		Enterprise Product Partners, L.P.

EPA		Environmental Protection Agency

PAGE 3


Abbreviation or Acronym		Definition
EPC		Engineering, procurement and construction

EPS		Earnings per share

Equity Units		Dominion’s 2013 Series A Equity Units and 2013 Series B Equity Units issued in June 2013

ESBWR		General Electric-Hitachi’s Economic Simplified Boiling Water Reactor

FERC		Federal Energy Regulatory Commission

Flex MMP Stock		Virginia Power’s Flexible Money Market Cumulative Preferred Stock 2002 Series A

Fowler Ridge		A wind-turbine facility joint venture between Dominion and BP in Benton County, Indiana

FTRs		Financial transmission rights

GAAP		U.S. generally accepted accounting principles

Gal		Gallon

GHG		Greenhouse gas

Heating degree days		Units measuring the extent to which the average daily temperature is less than 65 degrees Fahrenheit, calculated as the difference between 65 degrees and the average temperature for that day

INPO		Institute of Nuclear Power Operations

ISO		Independent system operator

ISO-NE		ISO New England

Kewaunee		Kewaunee nuclear power station

Kincaid		Kincaid power station

kV		Kilovolt

Line TL-404		An approximately 26-mile, 24- and 30- inch gas gathering pipeline that extends from Wetzel County, West Virginia to Monroe County, Ohio

LNG		Liquefied natural gas

MD&A		Management’s Discussion and Analysis of Financial Condition and Results of Operations

Meadow Brook-to-Loudoun line		Virginia Power 65-mile 500 kV transmission line that begins in Warren County, Virginia and terminates in Loudoun County, Virginia

MGD		Million gallons a day

Millstone		Millstone nuclear power station

MISO		Midcontinent Independent Transmission System Operator, Inc.

MLP		Master limited partnership

Moody’s		Moody’s Investors Service

MW		Megawatt

MWh		Megawatt hour

Natrium		A natural gas and fractionation facility located in Natrium, West Virginia, owned by Blue Racer

NCEMC		North Carolina Electric Membership Corporation

NedPower		A wind-turbine facility joint venture between Dominion and Shell in Grant County, West Virginia

NGLs		Natural gas liquids

North Anna		North Anna nuclear power station

North Carolina Commission		North Carolina Utilities Commission

Northern System		Collection of approximately 131 miles of various diameter natural gas pipelines in Ohio

NO_x		Nitrogen oxide

NPDES		National Pollutant Discharge Elimination System

NRC		Nuclear Regulatory Commission

NSPS		New Source Performance Standards

ODEC		Old Dominion Electric Cooperative

Ohio Commission		Public Utilities Commission of Ohio

Order 1000		Order issued by FERC adopting new requirements for transmission planning, cost allocation and development

PIPP		Percentage of Income Payment Plan

PIR		Pipeline Infrastructure Replacement program deployed by East Ohio

PJM		PJM Interconnection, L.L.C.

ppb		Parts-per-billion

PAGE 4


Abbreviation or Acronym		Definition
Rider B		A rate adjustment clause associated with the recovery of costs related to the conversion of three of Virginia Power’s coal-fired power stations to biomass

Rider S		A rate adjustment clause associated with the recovery of costs related to the Virginia City Hybrid Energy Center

Rider W		A rate adjustment clause associated with the recovery of costs related to Warren County

ROE		Return on equity

RTO		Regional transmission organization

SEC		Securities and Exchange Commission

Shell		Shell WindEnergy, Inc.

SO₂		Sulfur dioxide

Standard & Poor’s		Standard & Poor’s Ratings Services, a division of McGraw Hill Financial, Inc.

U.S.		United States of America

UAO		Unilateral Administrative Order

VIE		Variable interest entity

Virginia City Hybrid Energy Center		A 600 MW baseload carbon-capture compatible, clean coal powered electric generation facility in Wise County, Virginia

Virginia Commission		Virginia State Corporation Commission

Virginia Power		The legal entity, Virginia Electric and Power Company, one or more of its consolidated subsidiaries or operating segments or the entirety of Virginia Power and its consolidated subsidiaries

Warren County		A 1,329 MW combined-cycle, natural gas-fired power station under construction in Warren County, Virginia

PAGE 5

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DOMINION RESOURCES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended March 31,
	2014		2013
(millions, except per share amounts)
Operating Revenue	$	3,630	$	3,523

Operating Expenses
Electric fuel and other energy-related purchases		1,334		951
Purchased electric capacity		88		88
Purchased gas		540		467
Other operations and maintenance		425		623
Depreciation, depletion and amortization		308		297
Other taxes		167		167

Total operating expenses		2,862		2,593

Income from operations		768		930

Other income		40		87
Interest and related charges		237		228

Income from continuing operations including noncontrolling interests before income tax expense		571		789
Income tax expense		186		288

Income from continuing operations including noncontrolling interests		385		501
Income from discontinued operations		—		1

Net Income Including Noncontrolling Interests		385		502
Noncontrolling Interests		6		7

Net Income Attributable to Dominion	$	379	$	495

Amounts Attributable to Dominion:
Income from continuing operations, net of tax	$	379	$	494
Income from discontinued operations, net of tax		—		1

Net income attributable to Dominion	$	379	$	495

Earnings Per Common Share-Basic
Income from continuing operations	$	0.65	$	0.86
Income from discontinued operations		—		—

Net income attributable to Dominion	$	0.65	$	0.86

Earnings Per Common Share-Diluted
Income from continuing operations	$	0.65	$	0.86
Income from discontinued operations		—		—

Net income attributable to Dominion	$	0.65	$	0.86

Dividends declared per common share	$	0.6000	$	0.5625

The accompanying notes are an integral part of Dominion’s Consolidated Financial Statements.

PAGE 6

DOMINION RESOURCES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
	2014			2013
(millions)
Net income including noncontrolling interests	$	385		$	502
Other comprehensive income (loss), net of taxes:
Net deferred losses on derivatives-hedging activities⁽¹⁾		(150	)		(90	)
Changes in unrealized net gains on investment securities⁽²⁾		29			78
Changes in unrecognized pension and other postretirement benefit costs⁽³⁾		(4	)		—
Amounts reclassified to net income:
Net derivative losses-hedging activities⁽⁴⁾		160			76
Net realized gains on investment securities⁽⁵⁾		(11	)		(27	)
Net pension and other postretirement benefit costs⁽⁶⁾		8			20
Changes in other comprehensive loss from equity method investees		(7	)		—

Total other comprehensive income		25			57

Comprehensive income including noncontrolling interests		410			559
Comprehensive income attributable to noncontrolling interests		6			7

Comprehensive income attributable to Dominion	$	404		$	552

(1)	Net of $80 million and $54 million tax for the three months ended March 31, 2014 and 2013, respectively.

(2)	Net of $(1) million and $(51) million tax for the three months ended March 31, 2014 and 2013, respectively.

(3)	Net of $(4) million and $— million tax for the three months ended March 31, 2014 and 2013, respectively.

(4)	Net of $(100) million and $(48) million tax for the three months ended March 31, 2014 and 2013, respectively.

(5)	Net of $7 million and $18 million tax for the three months ended March 31, 2014 and 2013, respectively.

(6)	Net of $(6) million and $(9) million tax for the three months ended March 31, 2014 and 2013, respectively.

The accompanying notes are an integral part of Dominion’s Consolidated Financial Statements.

PAGE 7

DOMINION RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31, 2014			December 31, 2013⁽¹⁾
(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	228		$	316
Customer receivables (less allowance for doubtful accounts of $23 and $25)		1,805			1,695
Other receivables (less allowance for doubtful accounts of $4 at both dates)		167			141
Inventories		1,013			1,176
Derivative assets		472			687
Prepayments		216			192
Other		1,577			1,733

Total current assets		5,478			5,940

Investments
Nuclear decommissioning trust funds		3,969			3,903
Investment in equity method affiliates		1,073			916
Other		275			283

Total investments		5,317			5,102

Property, Plant and Equipment
Property, plant and equipment		47,723			46,969
Accumulated depreciation, depletion and amortization		(14,596	)		(14,341	)

Total property, plant and equipment, net		33,127			32,628

Deferred Charges and Other Assets
Goodwill		3,046			3,086
Regulatory assets		1,491			1,228
Other		2,127			2,112

Total deferred charges and other assets		6,664			6,426

Total assets	$	50,586		$	50,096

(1)	Dominion’s Consolidated Balance Sheet at December 31, 2013 has been derived from the audited Consolidated Financial Statements at that date.

The accompanying notes are an integral part of Dominion’s Consolidated Financial Statements.

PAGE 8

DOMINION RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS—(Continued)

(Unaudited)


	March 31, 2014			December 31, 2013⁽¹⁾
(millions)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Securities due within one year	$	916		$	1,519
Short-term debt		1,972			1,927
Accounts payable		1,143			1,168
Derivative liabilities		802			828
Other		1,518			1,552

Total current liabilities		6,351			6,994

Long-Term Debt
Long-term debt		18,004			16,877
Junior subordinated notes		1,373			1,373
Remarketable subordinated notes		1,081			1,080

Total long-term debt		20,458			19,330

Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits		7,293			7,114
Asset retirement obligations		1,495			1,484
Regulatory liabilities		1,947			2,001
Other		1,209			1,274

Total deferred credits and other liabilities		11,944			11,873

Total liabilities		38,753			38,197

Commitments and Contingencies (see Note 15)

Subsidiary Preferred Stock Not Subject to Mandatory Redemption		134			257

Common Shareholders’ Equity
Common stock – no par⁽²⁾		5,785			5,783
Retained earnings		6,213			6,183
Accumulated other comprehensive loss		(299	)		(324	)

Total common shareholders’ equity		11,699			11,642

Total liabilities and shareholders’ equity	$	50,586		$	50,096

(1)	Dominion’s Consolidated Balance Sheet at December 31, 2013 has been derived from the audited Consolidated Financial Statements at that date.

(2)	1 billion shares authorized; 582 million shares and 581 million shares outstanding at March 31, 2014 and December 31, 2013, respectively.

The accompanying notes are an integral part of Dominion’s Consolidated Financial Statements.

PAGE 9

DOMINION RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


Three Months Ended March 31,	2014			2013
(millions)
Operating Activities

Net income including noncontrolling interests	$	385		$	502
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:
Depreciation, depletion and amortization (including nuclear fuel)		378			366
Deferred income taxes and investment tax credits		232			266
Gains on the sale of assets		(159	)		(25	)
Other adjustments		(34	)		(32	)
Changes in:
Accounts receivable		(183	)		(124	)
Inventories		163			133
Deferred fuel and purchased gas costs, net		(304	)		16
Accounts payable		53			(135	)
Margin deposit assets and liabilities		105			(65	)
Other operating assets and liabilities		117			150

Net cash provided by operating activities		753			1,052

Investing Activities
Plant construction and other property additions (including nuclear fuel)		(1,120	)		(904	)
Acquisition of solar development projects		(47	)		—
Proceeds from sales of securities		442			554
Purchases of securities		(441	)		(574	)
Proceeds from the sale of assets to Blue Racer		84			47
Proceeds from the sale of electric retail energy marketing business		187			—
Other		(24	)		15

Net cash used in investing activities		(919	)		(862	)

Financing Activities
Issuance (repayment) of short-term debt, net		45			(409	)
Issuance of long-term debt		1,150			1,250
Repayment of long-term debt		(608	)		(712	)
Repayment of affiliated notes payable		—			(258	)
Subsidiary preferred stock redemption		(125	)		—
Issuance of common stock		—			73
Common dividend payments		(349	)		(324	)
Subsidiary preferred dividend payments		(4	)		(4	)
Other		(31	)		(19	)

Net cash provided by (used in) financing activities		78			(403	)

Decrease in cash and cash equivalents		(88	)		(213	)
Cash and cash equivalents at beginning of period		316			248

Cash and cash equivalents at end of period	$	228		$	35

Supplemental Cash Flow Information
Significant noncash investing activities:
Accrued capital expenditures	$	261		$	200

The accompanying notes are an integral part of Dominion’s Consolidated Financial Statements.

PAGE 10

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended March 31,
	2014		2013
(millions)
Operating Revenue⁽¹⁾	$	1,983	$	1,781

Operating Expenses
Electric fuel and other energy-related purchases⁽¹⁾		650		570
Purchased electric capacity		88		88
Other operations and maintenance:
Affiliated suppliers		71		74
Other		270		245
Depreciation and amortization		218		207
Other taxes		73		67

Total operating expenses		1,370		1,251

Income from operations		613		530

Other income		15		25
Interest and related charges		107		93

Income before income tax expense		521		462
Income tax expense		197		175

Net Income		324		287
Preferred dividends		6		4

Balance available for common stock	$	318	$	283

(1)	See Note 17 for amounts attributable to affiliates.

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

PAGE 11

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
	2014			2013
(millions)
Net income	$	324		$	287
Other comprehensive income (loss), net of taxes:
Net deferred gains on derivatives-hedging activities⁽¹⁾		2			2
Changes in unrealized net gains on nuclear decommissioning trust funds⁽²⁾		2			8
Amounts reclassified to net income:
Net derivative gains-hedging activities⁽³⁾		(3	)		—
Net realized gains on nuclear decommissioning trust funds⁽⁴⁾		(2	)		(1	)

Other comprehensive income (loss)		(1	)		9

Comprehensive income	$	323		$	296

(1)	Net of $(1) million tax for both the three months ended March 31, 2014 and 2013.

(2)	Net of $(2) million and $(5) million tax for the three months ended March 31, 2014 and 2013, respectively.

(3)	Net of $2 million and $— million tax for the three months ended March 31, 2014 and 2013, respectively.

(4)	Net of $1 million tax for both the three months ended March 31, 2014 and 2013.

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

PAGE 12

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31, 2014			December 31, 2013⁽¹⁾
(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	24		$	16
Customer receivables (less allowance for doubtful accounts of $11 at both dates)		925			946
Other receivables (less allowance for doubtful accounts of $2 at both dates)		110			78
Inventories (average cost method)		717			808
Prepayments		47			32
Other		224			283

Total current assets		2,047			2,163

Investments
Nuclear decommissioning trust funds		1,796			1,765
Other		12			12

Total investments		1,808			1,777

Property, Plant and Equipment
Property, plant and equipment		33,488			32,848
Accumulated depreciation and amortization		(10,767	)		(10,580	)

Total property, plant and equipment, net		22,721			22,268

Deferred Charges and Other Assets
Intangible assets, net		194			193
Regulatory assets		664			417
Other⁽²⁾		185			143

Total deferred charges and other assets		1,043			753

Total assets	$	27,619		$	26,961

(1)	Virginia Power’s Consolidated Balance Sheet at December 31, 2013 has been derived from the audited Consolidated Financial Statements at that date.

(2)	See Note 17 for amounts attributable to affiliates.

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

PAGE 13

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED BALANCE SHEETS—(Continued)

(Unaudited)


	March 31, 2014		December 31, 2013⁽¹⁾
(millions)
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Securities due within one year	$	58	$	58
Short-term debt		503		842
Accounts payable		462		479
Payables to affiliates		77		69
Affiliated current borrowings		159		97
Accrued interest, payroll and taxes		228		218
Other		462		454

Total current liabilities		1,949		2,217

Long-Term Debt		8,719		7,974

Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits		4,327		4,137
Asset retirement obligations		694		689
Regulatory liabilities		1,542		1,597
Other⁽²⁾		287		292

Total deferred credits and other liabilities		6,850		6,715

Total liabilities		17,518		16,906

Commitments and Contingencies (see Note 15)

Preferred Stock Not Subject to Mandatory Redemption		134		257

Common Shareholder’s Equity
Common stock – no par⁽³⁾		5,738		5,738
Other paid-in capital		1,113		1,113
Retained earnings		3,069		2,899
Accumulated other comprehensive income		47		48

Total common shareholder’s equity		9,967		9,798

Total liabilities and shareholder’s equity	$	27,619	$	26,961

(1)	Virginia Power’s Consolidated Balance Sheet at December 31, 2013 has been derived from the audited Consolidated Financial Statements at that date.

(2)	See Note 17 for amounts attributable to affiliates.

(3)	500,000 shares authorized; 274,723 shares outstanding at March 31, 2014 and December 31, 2013.

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

PAGE 14

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


Three Months Ended March 31,	2014			2013
(millions)
Operating Activities
Net income	$	324		$	287
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including nuclear fuel)		263			250
Deferred income taxes and investment tax credits		203			112
Other adjustments		(12	)		(17	)
Changes in:
Accounts receivable		(9	)		(31	)
Inventories		91			68
Deferred fuel expenses		(328	)		(19	)
Accounts payable		34			(65	)
Accrued interest, payroll and taxes		10			90
Other operating assets and liabilities		24			32

Net cash provided by operating activities		600			707

Investing Activities
Plant construction and other property additions		(691	)		(592	)
Purchases of nuclear fuel		(68	)		(47	)
Purchases of securities		(215	)		(206	)
Proceeds from sales of securities		204			189
Other		(6	)		1

Net cash used in investing activities		(776	)		(655	)

Financing Activities
Repayment of short-term debt, net		(339	)		(331	)
Issuance (repayment) of affiliated current borrowings, net		62			(378	)
Issuance of long-term debt		750			1,250
Repayment of long-term debt		(2	)		(451	)
Preferred stock redemption		(125	)		—
Common dividend payments		(149	)		(148	)
Preferred dividend payments		(4	)		(4	)
Other		(9	)		(15	)

Net cash provided by (used in) financing activities		184			(77	)

Increase (decrease) in cash and cash equivalents		8			(25	)
Cash and cash equivalents at beginning of period		16			28

Cash and cash equivalents at end of period	$	24		$	3

Supplemental Cash Flow Information
Significant noncash investing activities:
Accrued capital expenditures	$	203		$	117

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

PAGE 15

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Nature of Operations

Dominion, headquartered in Richmond, Virginia, is one of the nation’s largest producers and transporters of energy. Dominion’s operations are conducted through various subsidiaries, including Virginia Power, a regulated public utility that generates, transmits and distributes electricity for sale in Virginia and northeastern North Carolina.

Note 2. Significant Accounting Policies

As permitted by the rules and regulations of the SEC, Dominion’s and Virginia Power’s accompanying unaudited Consolidated Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes in Dominion’s and Virginia Power’s Annual Report on Form 10-K for the year ended December 31, 2013.

In Dominion’s and Virginia Power’s opinion, the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary to present fairly their financial position as of March 31, 2014 and their results of operations and cash flows for the three months ended March 31, 2014 and 2013. Such adjustments are normal and recurring in nature unless otherwise noted.

The Companies make certain estimates and assumptions in preparing their Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates.

Dominion’s and Virginia Power’s accompanying unaudited Consolidated Financial Statements include, after eliminating intercompany transactions and balances, their accounts and those of their respective majority-owned subsidiaries and those VIEs where Dominion has been determined to be the primary beneficiary.

The results of operations for interim periods are not necessarily indicative of the results expected for the full year. Information for quarterly periods is affected by seasonal variations in sales, rate changes, electric fuel and other energy-related purchases, purchased gas expenses and other factors.

Certain amounts in Dominion’s and Virginia Power’s 2013 Consolidated Financial Statements and Notes have been reclassified to conform to the 2014 presentation for comparative purposes. The reclassifications did not affect the Companies’ net income, total assets, liabilities, equity or cash flows.

Amounts disclosed for Dominion are inclusive of Virginia Power, where applicable.

Note 3. Acquisitions and Dispositions

Acquisition of Solar Development Projects

In March 2014, Dominion completed the acquisition of 100% of the equity interests of six solar development projects in California from Recurrent Energy Development Holdings, LLC for approximately $50 million. The allocation of the purchase price to individual assets is under evaluation by management and has not been finalized.

The projects are expected to cost approximately $450 million once constructed, including the initial acquisition cost. Upon completion, the facilities are expected to generate approximately 139 MW and will provide Dominion with a large utility-scale solar presence in the California market and significantly increase its solar generation portfolio.

Long-term power purchase, interconnection, EPC and operation and maintenance agreements have been executed for each of the projects. Construction of the projects commenced in the first quarter of this year and all of the solar facilities are expected to enter commercial operations in late 2014 or early 2015. Dominion expects to claim federal investment tax credits on the projects.

Sale of Electric Retail Energy Marketing Business

In March 2014, Dominion completed the sale of its electric retail energy marketing business. The proceeds were approximately $187 million, net of transaction costs. The sale resulted in a gain, subject to post-closing adjustments, of approximately $100 million ($57 million after-tax) net of a $31 million write-off of goodwill, and is included in other operations and maintenance expense in Dominion’s Consolidated Statement of Income. The sale of the electric retail energy marketing business did not qualify for discontinued operations classification.

PAGE 16

Sale of Brayton Point, Kincaid and Equity Method Investment in Elwood

In March 2013, Dominion entered into an agreement with Energy Capital Partners to sell Brayton Point, Kincaid, and its equity method investment in Elwood. In August 2013, Dominion completed the sale and received proceeds of approximately $465 million, net of transaction costs.

In the first quarter of 2013, Brayton Point’s and Kincaid’s assets and liabilities to be disposed of were classified as held for sale and adjusted to their estimated fair value less cost to sell, resulting in impairment charges totaling $37 million ($22 million after-tax), which is included in discontinued operations in Dominion’s Consolidated Statements of Income. Dominion used the market approach to estimate the fair value of Brayton Point’s and Kincaid’s long-lived assets. This was considered a Level 2 fair value measurement given that it was based on the agreed-upon sales price.

Dominion’s 50% interest in Elwood was an equity method investment and therefore, in accordance with applicable accounting guidance, the carrying amount of this investment was not classified as held for sale nor were the equity earnings from this investment reported as discontinued operations.

The following table presents selected information regarding the results of operations of Brayton Point and Kincaid, which are reported as discontinued operations in Dominion’s Consolidated Statements of Income:


Three Months Ended March 31,	2013
(millions)
Operating revenue	$	154
Income before income taxes		1

Assignment of Marcellus Acreage

As discussed in Note 10 to Dominion’s Consolidated Financial Statements in its Annual Report on Form 10-K for the year ended December 31, 2013, DTI closed on agreements with two natural gas producers to convey approximately 100,000 acres of Marcellus Shale development rights underneath several of its natural gas storage fields. In the first quarter of 2014, DTI received $12 million in additional cash proceeds resulting from post-closing adjustments. At March 31, 2014, deferred revenue totaled approximately $89 million, which will be recognized over the remaining terms of the agreements.

Blue Racer

See Note 10 for a discussion of transactions related to Blue Racer.

Note 4. Operating Revenue

The Companies’ operating revenue consists of the following:


	Three Months Ended March 31,
	2014		2013
(millions)
Dominion
Electric sales:
Regulated	$	1,951	$	1,761
Nonregulated		854		658
Gas sales:
Regulated		147		132
Nonregulated		117		345
Gas transportation and storage		444		467
Other		117		160

Total operating revenue	$	3,630	$	3,523

Virginia Power
Regulated electric sales	$	1,951	$	1,761
Other		32		20

Total operating revenue	$	1,983	$	1,781

PAGE 17

Note 5. Income Taxes

For continuing operations, including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to Dominion’s and Virginia Power’s effective income tax rate as follows:


	Dominion						Virginia Power
Three Months Ended March 31,	2014			2013			2014			2013
U.S. statutory rate		35.0	%		35.0	%		35.0	%		35.0	%
Increases (reductions) resulting from:
State taxes, net of federal benefit		2.7			4.0			3.8			3.9
Investment and production tax credits		(4.2	)		(1.5	)		(0.8	)		—
AFUDC - equity		(0.3	)		(0.7	)		(0.3	)		(1.3	)
Other, net		(0.5	)		(0.3	)		0.1			0.2

Effective tax rate		32.7	%		36.5	%		37.8	%		37.8	%

As of March 31, 2014, there have been no material changes in Dominion’s and Virginia Power’s unrecognized tax benefits or possible changes that could reasonably be expected to occur during the next twelve months. See Note 5 to the Consolidated Financial Statements in Dominion’s and Virginia Power’s Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion of these unrecognized tax benefits.

Note 6. Earnings Per Share

The following table presents the calculation of Dominion’s basic and diluted EPS:


	Three Months Ended March 31,
	2014		2013
(millions, except EPS)
Net income attributable to Dominion	$	379	$	495

Average shares of common stock outstanding – Basic		581.6		576.6
Net effect of dilutive securities⁽¹⁾		1.3		0.9

Average shares of common stock outstanding – Diluted		582.9		577.5

Earnings Per Common Share – Basic	$	0.65	$	0.86
Earnings Per Common Share – Diluted	$	0.65	$	0.86

(1)

Dilutive securities consist primarily of contingently convertible senior notes and Equity Units for 2014 and contingently convertible senior notes for 2013. See Note 14 in this report and Note 17 to the Consolidated Financial Statements in Dominion’s and Virginia Power’s Annual Report on Form 10-K for the year ended December 31, 2013 for more information.

There were no potentially dilutive securities excluded from the calculation of diluted EPS for the three months ended March 31, 2014 and 2013.

PAGE 18

Note 7. Accumulated Other Comprehensive Income

The following table presents Dominion’s changes in AOCI by component, net of tax:


	Deferred gains and losses on derivatives- hedging activities			Unrealized gains and losses on investment securities			Unrecognized pension and other postretirement benefit costs			Other comprehensive income (loss) from equity method investee			Total
(millions)
Three Months Ended March 31, 2014
Beginning balance	$	(288	)	$	474		$	(510	)	$	—		$	(324	)
Other comprehensive income before reclassifications: gains (losses)		(150	)		29			(4	)		(7	)		(132	)
Amounts reclassified from accumulated other comprehensive income⁽¹⁾: (gains) losses		160			(11	)		8			—			157

Net current-period other comprehensive income (loss)		10			18			4			(7	)		25

Ending balance	$	(278	)	$	492		$	(506	)	$	(7	)	$	(299	)

Three Months Ended March 31, 2013
Beginning balance	$	(122	)	$	326		$	(1,081	)	$	—		$	(877	)
Other comprehensive income before reclassifications: gains (losses)		(90	)		78			—			—			(12	)
Amounts reclassified from accumulated other comprehensive income⁽¹⁾: (gains) losses		76			(27	)		20			—			69

Net current-period other comprehensive income (loss)		(14	)		51			20			—			57

Ending balance	$	(136	)	$	377		$	(1,061	)	$	—		$	(820	)

(1)	See table below for details about these reclassifications.

PAGE 19

The following table presents Dominion’s reclassifications out of AOCI by component:


Details about AOCI components	Amounts reclassified from AOCI			Affected line item in the Consolidated Statements of Income
(millions)
Three Months Ended March 31, 2014
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	269		Operating revenue
		1		Purchased gas
		(13	)	Electric fuel and other energy-related purchases
Interest rate contracts		3		Interest and related charges

		260
Tax		(100	)	Income tax expense

	$	160

Unrealized (gains) and losses on investment securities:
Realized (gain) loss on sale of securities	$	(20	)	Other income
Impairment		2		Other income

		(18	)
Tax		7		Income tax expense

	$	(11	)

Unrecognized pension and other postretirement benefit costs:
Prior service costs	$	(3	)	Other operations and maintenance
Actuarial (gain) losses		17		Other operations and maintenance

		14
Tax		(6	)	Income tax expense

	$	8
Three Months Ended March 31, 2013
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	84		Operating revenue
		34		Purchased gas
		3		Electric fuel and other energy-related purchases
Interest rate contracts		3		Interest and related charges

		124
Tax		(48	)	Income tax expense

	$	76

Unrealized (gains) and losses on investment securities:
Realized (gain) loss on sale of securities	$	(47	)	Other income
Impairment		2		Other income

		(45	)
Tax		18		Income tax expense

	$	(27	)

Unrecognized pension and other postretirement benefit costs:
Actuarial (gains) losses	$	29		Other operations and maintenance

		29
Tax		(9	)	Income tax expense

	$	20

PAGE 20

Note 8. Fair Value Measurements

Dominion’s and Virginia Power’s fair value measurements are made in accordance with the policies discussed in Note 6 to the Consolidated Financial Statements in their Annual Report on Form 10-K for the year ended December 31, 2013. See Note 9 in this report for further information about their derivatives and hedge accounting activities.

Dominion and Virginia Power enter into certain physical and financial forwards, futures and options, which are considered Level 3 as they have one or more inputs that are not observable and are significant to the valuation. The discounted cash flow method is used to value Level 3 physical and financial forwards and futures contracts. An option model is used to value Level 3 physical and financial options. The discounted cash flow model for forwards and futures calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return, and credit spreads. The option model calculates mark-to-market valuations using variations of the Black-Scholes option model. The inputs into the models are the forward market prices, implied price volatilities, risk-free rate of return, the option expiration dates, the option strike prices, the original sales prices, and volumes. For Level 3 fair value measurements, forward market prices and implied price volatilities are considered unobservable. The unobservable inputs are developed and substantiated using historical information, available market data, third-party data, and statistical analysis. Periodically, inputs to valuation models are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third-party pricing sources.

The following table presents Dominion’s and Virginia Power’s quantitative information about Level 3 fair value measurements. The range and weighted average are presented in dollars for market price inputs and percentages for price volatility.


	Fair Value (millions)		Valuation Techniques	Unobservable Input			Range	Weighted Average⁽¹⁾

At March 31, 2014
Assets:
Physical and Financial Forwards and Futures:
Natural Gas⁽²⁾	$	14	Discounted Cash Flow		Market Price (per Dth	)⁽⁴⁾	(2) - 7		1
Electricity		3	Discounted Cash Flow		Market Price (per MWh	)⁽⁴⁾	28 - 112		54
FTRs⁽³⁾		11	Discounted Cash Flow		Market Price (per MWh	)⁽⁴⁾	(1) - 8		2
NGLs		6	Discounted Cash Flow		Market Price (per Gal	)⁽⁴⁾	1 - 3		1
Physical and Financial Options:
Natural Gas		3	Option Model		Market Price (per Dth	)⁽⁴⁾	3 - 5		4
					Price Volatility	⁽⁵⁾	15% - 43%		21	%
Total assets	$	37

Liabilities:
Physical and Financial Forwards and Futures:
Natural Gas⁽²⁾	$	16	Discounted Cash Flow		Market Price (per Dth	)⁽⁴⁾	(2) - 5		—
Electricity		3	Discounted Cash Flow		Market Price (per MWh	)⁽⁴⁾	28 - 112		54
FTRs⁽³⁾		1	Discounted Cash Flow		Market Price (per MWh	)⁽⁴⁾	(2) - 8		—
NGLs		7	Discounted Cash Flow		Market Price (per Gal	)⁽⁴⁾	1 - 3		1
Physical and Financial Options:
Natural Gas		2	Option Model		Market Price (per Dth	)⁽⁴⁾	3 - 5		4
					Price Volatility	⁽⁵⁾	15% - 43%		21	%
Total liabilities	$	29

(1)	Averages weighted by volume.

(2)	Includes basis.

(3)	Information represents Virginia Power’s quantitative information about Level 3 fair value measurements.

(4)	Represents market prices beyond defined terms for Levels 1 & 2.

(5)	Represents volatilities unrepresented in published markets.

PAGE 21

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:


Significant Unobservable Inputs	Position	Change to Input	Impact on Fair Value Measurement
Market Price	Buy	Increase (decrease)	Gain (loss)
Market Price	Sell	Increase (decrease)	Loss (gain)
Price Volatility	Buy	Increase (decrease)	Gain (loss)
Price Volatility	Sell	Increase (decrease)	Loss (gain)

Non-recurring Fair Value Measurements

See Note 3 for a non-recurring fair value measurement related to Brayton Point and Kincaid.

PAGE 22

Recurring Fair Value Measurements

Dominion

The following table presents Dominion’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:


	Level 1		Level 2		Level 3		Total
(millions)
At March 31, 2014
Assets:
Derivatives:
Commodity	$	2	$	537	$	37	$	576
Interest rate		—		73		—		73
Investments⁽¹⁾:
Equity securities:
U.S.:
Large cap		2,474		—		—		2,474
Other		6		—		—		6
Non-U.S.:
Large cap		12		—		—		12
Fixed income:
Corporate debt instruments		—		391		—		391
U.S. Treasury securities and agency debentures		443		173		—		616
State and municipal		—		361		—		361
Other		—		7		—		7
Cash equivalents and other		—		120		—		120
Restricted cash equivalents		—		8		—		8

Total assets	$	2,937	$	1,670	$	37	$	4,644

Liabilities:
Derivatives:
Commodity	$	3	$	975	$	29	$	1,007
Interest rate		—		47		—		47

Total liabilities	$	3	$	1,022	$	29	$	1,054

At December 31, 2013
Assets:
Derivatives:
Commodity	$	3	$	718	$	32	$	753
Interest rate		—		137		—		137
Investments⁽¹⁾:
Equity securities:
U.S.:
Large cap		2,417		—		—		2,417
Other		79		—		—		79
Non-U.S.:
Large cap		13		—		—		13
Fixed income:
Corporate debt instruments		—		345		—		345
U.S. Treasury securities and agency debentures		415		175		—		590
State and municipal		—		343		—		343
Other		—		3		—		3
Cash equivalents and other		—		103		—		103
Restricted cash equivalents		—		8		—		8

Total assets	$	2,927	$	1,832	$	32	$	4,791

Liabilities:
Derivatives:
Commodity	$	3	$	1,051	$	48	$	1,102

Total liabilities	$	3	$	1,051	$	48	$	1,102

(1)	Includes investments held in the nuclear decommissioning and rabbi trusts.

PAGE 23

The following table presents the net change in Dominion’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:


	Three Months Ended March 31,
	2014			2013
(millions)
Beginning balance	$	(16	)	$	25
Total realized and unrealized gains (losses):
Included in earnings		110			14
Included in other comprehensive income (loss)		4			9
Included in regulatory assets/liabilities		17			(5	)
Settlements		(108	)		(26	)
Transfers out of Level 3		1			(8	)

Ending balance	$	8		$	9

The amount of gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets/liabilities still held at the reporting date	$	1		$	(5	)

PAGE 24

The following table presents Dominion’s classification of gains and losses included in earnings in the Level 3 fair value category:


	Operating revenue			Electric fuel and other energy- related purchases		Total
(millions)
Three Months Ended March 31, 2014
Total gains (losses) included in earnings	$	(10	)	$	120	$	110

The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets/liabilities still held at the reporting date		1			—		1

Three Months Ended March 31, 2013
Total gains (losses) included in earnings	$	12		$	2	$	14

The amount of total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets/liabilities still held at the reporting date		(5	)		—		(5	)

PAGE 25

Virginia Power

The following table presents Virginia Power’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:


	Level 1		Level 2		Level 3		Total
(millions)
At March 31, 2014
Assets:
Derivatives:
Commodity	$	—	$	7	$	11	$	18
Investments⁽¹⁾:
Equity securities:
U.S. Large cap		1,046		—		—		1,046
Fixed income:
Corporate debt instruments		—		219		—		219
U.S. Treasury securities and agency debentures		161		56		—		217
State and municipal		—		182		—		182
Other		—		1		—		1
Cash equivalents and other		—		49		—		49
Restricted cash equivalents		—		8		—		8

Total assets	$	1,207	$	522	$	11	$	1,740

Liabilities:
Derivatives:
Commodity	$	—	$	3	$	1	$	4
Interest rate		—		4		—		4

Total liabilities	$	—	$	7	$	1	$	8

At December 31, 2013
Assets:
Derivatives:
Commodity	$	—	$	3	$	2	$	5
Interest rate	$	—	$	48	$	—	$	48
Investments⁽¹⁾:
Equity securities:
U.S.:
Large cap		1,021		—		—		1,021
Other		36		—		—		36
Fixed income:
Corporate debt instruments		—		191		—		191
U.S. Treasury securities and agency debentures		146		66		—		212
State and municipal		—		164		—		164
Cash equivalents and other		—		31		—		31
Restricted cash equivalents		—		8		—		8

Total assets	$	1,203	$	511	$	2	$	1,716

Liabilities:
Derivatives:
Commodity	$	—	$	3	$	9	$	12

Total liabilities	$	—	$	3	$	9	$	12

(1)	Includes investments held in the nuclear decommissioning and rabbi trusts.

PAGE 26

The following table presents the net change in Virginia Power’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:


	Three Months Ended March 31,
	2014			2013
(millions)
Beginning balance	$	(7	)	$	2
Total realized and unrealized gains (losses):
Included in earnings		120			2
Included in regulatory assets/liabilities		17			(5	)
Settlements		(120	)		(2	)

Ending balance	$	10		$	(3	)

The gains and losses included in earnings in the Level 3 fair value category were classified in electric fuel and other energy-related purchases in Virginia Power’s Consolidated Statements of Income for the three months ended March 31, 2014 and 2013. There were no unrealized gains or losses included in earnings in the Level 3 fair value category relating to assets/liabilities still held at the reporting date for the three months ended March 31, 2014 and 2013.

Fair Value of Financial Instruments

Substantially all of Dominion’s and Virginia Power’s financial instruments are recorded at fair value, with the exception of the instruments described below, which are reported at historical cost. Estimated fair values have been determined using available market information and valuation methodologies considered appropriate by management. The carrying amount of cash and cash equivalents, customer and other receivables, short-term debt and accounts payable are representative of fair value because of the short-term nature of these instruments. For Dominion’s and Virginia Power’s financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:


	March 31, 2014				December 31, 2013
	Carrying Amount		Estimated Fair Value⁽¹⁾		Carrying Amount		Estimated Fair Value⁽¹⁾
(millions)
Dominion
Long-term debt, including securities due within one year⁽²⁾	$	18,920	$	20,822	$	18,396	$	19,887
Junior subordinated notes⁽³⁾		1,373		1,391		1,373		1,394
Remarketable subordinated notes⁽³⁾		1,081		1,268		1,080		1,192
Subsidiary preferred stock⁽⁴⁾		134		141		257		261

Virginia Power
Long-term debt, including securities due within one year⁽²⁾	$	8,777	$	9,862	$	8,032	$	8,897
Preferred stock⁽⁴⁾		134		141		257		261

(1)

Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issues with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value.

(2)	Carrying amount includes amounts which represent the unamortized discount and premium. At March 31, 2014 and December 31, 2013, includes the valuation of certain fair value hedges associated with Dominion’s fixed rate debt of approximately $40 million and $55 million, respectively.

(3)	Carrying amount includes amounts which represent the unamortized discount or premium.

(4)	Carrying amount includes deferred issuance expenses of $2 million at December 31, 2013.

Note 9. Derivatives and Hedge Accounting Activities

Dominion’s and Virginia Power’s accounting policies and objectives and strategies for using derivative instruments are discussed in Note 2 to the Consolidated Financial Statements in their Annual Report on Form 10-K for the year ended December 31, 2013. See Note 8 in this report for further information about fair value measurements and associated valuation methods for derivatives.

PAGE 27

Derivative assets and liabilities are presented gross on Dominion’s and Virginia Power’s Consolidated Balance Sheets. Dominion’s and Virginia Power’s derivative contracts include both over-the-counter transactions and those that are executed on an exchange or other trading platform (exchange contracts) and centrally cleared. Over-the-counter contracts are bilateral contracts that are transacted directly with a third party. Exchange contracts utilize a financial intermediary, exchange, or clearinghouse to enter, execute, or clear the transactions. Certain over-the-counter and exchange contracts contain contractual rights of setoff through master netting arrangements, derivative clearing agreements, and contract default provisions. In addition, the contracts are subject to conditional rights of setoff through counterparty nonperformance, insolvency, or other conditions.

In general, most over-the-counter transactions and all exchange contracts are subject to collateral requirements. Types of collateral for over-the-counter and exchange contracts include cash, letters of credit, and in some cases other forms of security, none of which are subject to restrictions. Cash collateral is used in the table below to offset derivative assets and liabilities. Certain accounts receivable and accounts payable recognized on Dominion’s and Virginia Power’s Consolidated Balance Sheets, as well as letters of credit and other forms of security, all of which are not included in the tables below, are subject to offset under master netting or similar arrangements and would reduce the net exposure.

Dominion

Balance Sheet Presentation

The tables below present Dominion’s derivative asset and liability balances by type of financial instrument, before and after the effects of offsetting:


	March 31, 2014						December 31, 2013
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet
(millions)
Interest rate contracts:
Over-the-counter	$	73	$	—	$	73	$	137	$	—	$	137
Commodity contracts:
Over-the-counter		203		—		203		240		—		240
Exchange		372		—		372		506		—		506

Total derivatives, subject to a master netting or similar arrangement		648		—		648		883		—		883
Total derivatives, not subject to a master netting or similar arrangement		1		—		1		7		—		7

Total	$	649	$	—	$	649	$	890	$	—	$	890


			March 31, 2014								December 31, 2013
			Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
	Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts
(millions)
Interest rate contracts:
Over-the-counter	$	73	$	43	$	—	$	30	$	137	$	—	$	—	$	137
Commodity contracts:
Over-the-counter		203		132		—		71		240		63		—		177
Exchange		372		368		—		4		506		505		—		1

Total	$	648	$	543	$	—	$	105	$	883	$	568	$	—	$	315

PAGE 28


	March 31, 2014						December 31, 2013
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet
(millions)
Interest rate contracts:
Over-the-counter	$	47	$	—	$	47	$	—	$	—	$	—
Commodity contracts:
Over-the-counter		341		—		341		262		—		262
Exchange		665		—		665		838		—		838

Total derivatives, subject to a master netting or similar arrangement		1,053		—		1,053		1,100		—		1,100
Total derivatives, not subject to a master netting or similar arrangement		1		—		1		2		—		2

Total	$	1,054	$	—	$	1,054	$	1,102	$	—	$	1,102


			March 31, 2014								December 31, 2013
			Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
	Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts
(millions)
Interest rate contracts:
Over-the-counter	$	47	$	43	$	—	$	4	$	—	$	—	$	—	$	—
Commodity contracts:
Over-the-counter		341		132		8		201		262		63		69		130
Exchange		665		368		297		—		838		505		333		—

Total	$	1,053	$	543	$	305	$	205	$	1,100	$	568	$	402	$	130

Volumes

The following table presents the volume of Dominion’s derivative activity as of March 31, 2014. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of their long and short positions.


	Current		Noncurrent
Natural Gas (bcf):
Fixed price⁽¹⁾		77		15
Basis		504		272
Electricity (MWh):
Fixed price		17,786,691		14,597,007
FTRs		16,921,356		—
Capacity (MW)		33,550		18,300
Liquids (Gal)⁽²⁾		113,652,000		—
Interest rate	$	1,100,000,000	$	3,650,000,000

(1)	Includes options.

(2)	Includes NGLs and oil.

PAGE 29

Ineffectiveness and AOCI

For the three months ended March 31, 2014, gains or losses on hedging instruments determined to be ineffective and amounts excluded from the assessment of effectiveness were not material. Amounts excluded from the assessment of effectiveness include gains or losses attributable to changes in the time value of options and changes in the differences between spot prices and forward prices.

The following table presents selected information related to gains (losses) on cash flow hedges included in AOCI in Dominion’s Consolidated Balance Sheet at March 31, 2014:


	AOCI After-Tax			Amounts Expected to be Reclassified to Earnings during the next 12 Months After-Tax			Maximum Term
(millions)
Commodities:
Gas	$	(6	)	$	(6	)		25 months
Electricity		(135	)		(145	)		33 months
Other		—			—			26 months
Interest rate		(137	)		(7	)		366 months

Total	$	(278	)	$	(158	)

The amounts that will be reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., anticipated sales) in earnings, thereby achieving the realization of prices contemplated by the underlying risk management strategies and will vary from the expected amounts presented above as a result of changes in market prices and interest rates.

PAGE 30

Fair Value and Gains and Losses on Derivative Instruments

The following table presents the fair values of Dominion’s derivatives and where they are presented in its Consolidated Balance Sheets:


	Fair Value – Derivatives under Hedge Accounting		Fair Value – Derivatives not under Hedge Accounting		Total Fair Value
(millions)
March 31, 2014
ASSETS
Current Assets
Commodity	$	149	$	261	$	410
Interest rate		62		—		62

Total current derivative assets		211		261		472

Noncurrent Assets
Commodity		92		74		166
Interest rate		11		—		11

Total noncurrent derivative assets⁽¹⁾		103		74		177

Total derivative assets	$	314	$	335	$	649

LIABILITIES
Current Liabilities
Commodity	$	394	$	397	$	791
Interest rate		11		—		11

Total current derivative liabilities		405		397		802

Noncurrent Liabilities
Commodity		77		139		216
Interest Rate		36		—		36

Total noncurrent derivative liabilities⁽²⁾		113		139		252

Total derivative liabilities	$	518	$	536	$	1,054

December 31, 2013
ASSETS
Current Assets
Commodity	$	49	$	522	$	571
Interest rate		116		—		116

Total current derivative assets		165		522		687

Noncurrent Assets
Commodity		28		154		182
Interest rate		21		—		21

Total noncurrent derivative assets⁽¹⁾		49		154		203

Total derivative assets	$	214	$	676	$	890

LIABILITIES
Current Liabilities
Commodity	$	267	$	561	$	828

Total current derivative liabilities		267		561		828

Noncurrent Liabilities
Commodity		119		155		274

Total noncurrent derivative liabilities⁽²⁾		119		155		274

Total derivative liabilities	$	386	$	716	$	1,102

(1)	Noncurrent derivative assets are presented in other deferred charges and other assets in Dominion’s Consolidated Balance Sheets.

(2)	Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Dominion’s Consolidated Balance Sheets.

PAGE 31

The following tables present the gains and losses on Dominion’s derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Income:


Derivatives in cash flow hedging relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)⁽¹⁾			Amount of Gain (Loss) Reclassified from AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment⁽²⁾
(millions)
Three Months Ended March 31, 2014
Derivative Type and Location of Gains (Losses)
Commodity:
Operating revenue				$	(269	)
Purchased gas					(1	)
Electric fuel and other energy-related purchases					13

Total commodity	$	(183	)	$	(257	)	$	2

Interest rate⁽³⁾		(47	)		(3	)		(23	)

Total	$	(230	)	$	(260	)	$	(21	)

Three Months Ended March 31, 2013
Derivative Type and Location of Gains (Losses)
Commodity:
Operating revenue				$	(84	)
Purchased gas					(34	)
Electric fuel and other energy-related purchases					(3	)

Total commodity	$	(157	)	$	(121	)	$	7

Interest rate⁽³⁾		13			(3	)		16

Total	$	(144	)	$	(124	)	$	23

(1)	Amounts deferred into AOCI have no associated effect in Dominion’s Consolidated Statements of Income.

(2)	Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion’s Consolidated Statements of Income.

(3)	Amounts recorded in Dominion’s Consolidated Statements of Income are classified in interest and related charges.


	Amount of Gain (Loss) Recognized in Income on Derivatives⁽¹⁾
	Three Months Ended March 31,
Derivatives not designated as hedging instruments	2014			2013
(millions)
Derivative Type and Location of Gains (Losses)
Commodity
Operating revenue	$	(361	)	$	3
Purchased gas		7			18
Electric fuel and other energy-related purchases		133			3

Total	$	(221	)	$	24

(1)	Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion’s Consolidated Statements of Income.

PAGE 32

Virginia Power

Balance Sheet Presentation

The tables below present Virginia Power’s derivative asset and liability balances by type of financial instrument, before and after the effects of offsetting:


	March 31, 2014						December 31, 2013
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet
(millions)
Interest rate contracts:
Over-the-counter	$	—	$	—	$	—	$	48	$	—	$	48
Commodity contracts:
Over-the-counter		14		—		14		4		—		4
Exchange		3		—		3		1		—		1

Total derivatives, subject to a master netting or similar arrangement		17		—		17		53		—		53
Total derivatives, not subject to a master netting or similar arrangement		1		—		1		—		—		—

Total	$	18	$	—	$	18	$	53	$	—	$	53


			March 31, 2014								December 31, 2013
			Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
	Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts
(millions)
Interest rate contracts:
Over-the-counter	$	—	$	—	$	—	$	—	$	48	$	—	$	—	$	48
Commodity contracts:
Over-the-counter		14		4		—		10		4		4		—		—
Exchange		3		—		—		3		1		—		—		1

Total	$	17	$	4	$	—	$	13	$	53	$	4	$	—	$	49

PAGE 33


	March 31, 2014						December 31, 2013
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet
(millions)
Interest rate contracts:
Over-the-counter	$	4	$	—	$	4	$	—	$	—	$	—
Commodity contracts:
Over-the-counter		4		—		4		12		—		12
Exchange		—		—		—		—		—		—

Total derivatives, subject to a master netting or similar arrangement		8		—		8		12		—		12
Total derivatives, not subject to a master netting or similar arrangement		—		—		—		—		—		—

Total	$	8	$	—	$	8	$	12	$	—	$	12


			March 31, 2014								December 31, 2013
			Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
	Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts
(millions)
Interest rate contracts:
Over-the-counter	$	4	$	—	$	—	$	4	$	—	$	—	$	—	$	—
Commodity contracts:
Over-the-counter		4		4		—		—		12		4		7		1
Exchange		—		—		—		—		—		—		—		—

Total	$	8	$	4	$	—	$	4	$	12	$	4	$	7	$	1

Volumes

The following table presents the volume of Virginia Power’s derivative activity as of March 31, 2014. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of their long and short positions.


	Current		Noncurrent
Natural Gas (bcf):
Fixed price		17		—
Basis		14		—
Electricity (MWh):
Fixed price		490,400		—
FTRs		16,307,498		—
Capacity (MW)		30,500		18,300
Interest rate	$	—	$	250,000,000

Ineffectiveness

PAGE 34

Fair Value and Gains and Losses on Derivative Instruments

The following table presents the fair values of Virginia Power’s derivatives and where they are presented in its Consolidated Balance Sheets:


	Fair Value – Derivatives under Hedge Accounting		Fair Value – Derivatives not under Hedge Accounting		Total Fair Value
(millions)
March 31, 2014
ASSETS
Current Assets
Commodity	$	5	$	13	$	18

Total current derivative assets⁽¹⁾		5		13		18

Total derivative assets	$	5	$	13	$	18

LIABILITIES
Current Liabilities
Commodity	$	2	$	2	$	4

Total current derivative liabilities⁽²⁾		2		2		4

Noncurrent Liabilities

Interest Rate		4		—		4

Total noncurrent derivatives liabilities ⁽³⁾		4		—		4

Total derivative liabilities	$	6	$	2	$	8

December 31, 2013
ASSETS
Current Assets
Commodity	$	2	$	3	$	5
Interest rate		48		—		48

Total current derivative assets⁽¹⁾		50		3		53

Total derivative assets	$	50	$	3	$	53

LIABILITIES
Current Liabilities
Commodity	$	1	$	11	$	12

Total current derivative liabilities⁽²⁾		1		11		12

Total derivative liabilities	$	1	$	11	$	12

(1)	Current derivative assets are presented in other current assets in Virginia Power’s Consolidated Balance Sheets.

(2)	Current derivative liabilities are presented in other current liabilities in Virginia Power’s Consolidated Balance Sheets.

(3)	Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Virginia Power’s Consolidated Balance Sheets.

PAGE 35

The following tables present the gains and losses on Virginia Power’s derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Income:


Derivatives in cash flow hedging relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion)⁽¹⁾			Amount of Gain (Loss) Reclassified from AOCI to Income		Increase (Decrease) in Derivatives Subject to Regulatory Treatment⁽²⁾
(millions)
Three Months Ended March 31, 2014
Derivative Type and Location of Gains (Losses)
Commodity:
Electric fuel and other energy-related purchases				$	5

Total commodity	$	6		$	5	$	2

Interest rate⁽³⁾		(3	)		—		(23	)

Total	$	3		$	5	$	(21	)

Three Months Ended March 31, 2013
Derivative Type and Location of Gains (Losses)
Commodity:
Electric fuel and other energy-related purchases				$	—

Total commodity	$	1		$	—	$	7

Interest rate⁽³⁾		2			—		16

Total	$	3		$	—	$	23

(1)	Amounts deferred into AOCI have no associated effect in Virginia Power’s Consolidated Statements of Income.

(2)	Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income.

(3)	Amounts recorded in Virginia Power’s Consolidated Statements of Income are classified in interest and related charges.


	Amount of Gain (Loss) Recognized in Income on Derivatives⁽¹⁾
	Three Months Ended March 31,
Derivatives not designated as hedging instruments	2014		2013
(millions)
Derivative Type and Location of Gains (Losses)
Commodity⁽²⁾	$	119	$	2

Total	$	119	$	2

(1)	Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income.

(2)	Amounts recorded in Virginia Power’s Consolidated Statements of Income are classified in electric fuel and other energy-related purchases.

Note 10. Investments

Dominion

Equity and Debt Securities

Rabbi Trust Securities

Marketable equity and debt securities and cash equivalents held in Dominion’s rabbi trusts and classified as trading totaled $104 million and $107 million at March 31, 2014 and December 31, 2013, respectively. Cost method investments held in Dominion’s rabbi trusts totaled $9 million and $10 million at March 31, 2014 and December 31, 2013, respectively.

PAGE 36

Decommissioning Trust Securities

Dominion holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Dominion’s decommissioning trust funds are summarized below:


	Amortized Cost		Total Unrealized Gains⁽¹⁾		Total Unrealized Losses ⁽¹⁾			Fair Value
(millions)
March 31, 2014
Marketable equity securities:
U.S. Large Cap	$	1,214	$	1,219	$	—		$	2,433
Marketable debt securities:
Corporate bonds		375		17		(1	)		391
U.S. Treasury securities and agency debentures		612		8		(6	)		614
State and municipal		305		16		(1	)		320
Other		7		—		—			7
Cost method investments		99		—		—			99
Cash equivalents and other⁽²⁾		105		—		—			105

Total	$	2,717	$	1,260	$	(8	)⁽³⁾	$	3,969

December 31, 2013
Marketable equity securities:
U.S.:
Large Cap	$	1,183	$	1,194	$	—		$	2,377
Other		49		23		—			72
Marketable debt securities:
Corporate bonds		332		16		(3	)		345
U.S. Treasury securities and agency debentures		589		8		(10	)		587
State and municipal		297		11		(5	)		303
Other		3		—		—			3
Cost method investments		106		—		—			106
Cash equivalents and other⁽²⁾		110		—		—			110

Total	$	2,669	$	1,252	$	(18	)⁽³⁾	$	3,903

(1)	Included in AOCI and the decommissioning trust regulatory liability.

(2)	Includes pending purchases of securities of $13 million and pending sales of securities of $11 million at March 31, 2014 and December 31, 2013, respectively.

(3)	The fair value of securities in an unrealized loss position was $475 million and $604 million at March 31, 2014 and December 31, 2013, respectively.

PAGE 37

The fair value of Dominion’s marketable debt securities held in nuclear decommissioning trust funds at March 31, 2014 by contractual maturity is as follows:


	Amount
(millions)
Due in one year or less	$	134
Due after one year through five years		379
Due after five years through ten years		403
Due after ten years		416

Total	$	1,332

Presented below is selected information regarding Dominion’s marketable equity and debt securities held in nuclear decommissioning trust funds.


	Three Months Ended March 31,
	2014		2013
(millions)
Proceeds from sales	$	442	$	554
Realized gains⁽¹⁾		38		63
Realized losses⁽¹⁾		6		6

(1)	Includes realized gains and losses recorded to the decommissioning trust regulatory liability.

Other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds for Dominion were not material for the three months ended March 31, 2014 and 2013.

Blue Racer

In December 2012, Dominion formed Blue Racer with Caiman to provide midstream services to natural gas producers operating in the Utica Shale region in Ohio and portions of Pennsylvania. Blue Racer is an equal partnership between Dominion and Caiman, with Dominion contributing midstream assets and Caiman contributing private equity capital. In March 2013, Dominion sold Line TL-404 to Blue Racer and received approximately $47 million in cash proceeds. The sale resulted in a gain of approximately $25 million ($14 million after-tax) which is included in other operations and maintenance expense in Dominion’s Consolidated Statement of Income. Dominion NGL Pipelines, LLC was contributed in January 2014 to Blue Racer, prior to commencement of service, resulting in an increased equity method investment of $155 million, including $6 million of goodwill. In March 2014, Dominion sold the Northern System to Blue Racer and received approximately $84 million in cash proceeds. The sale resulted in a gain of approximately $59 million ($34 million after-tax) net of a $3 million write-off of goodwill, and is included in other operations and maintenance expense in Dominion’s Consolidated Statement of Income.

PAGE 38

Virginia Power

Virginia Power holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power’s decommissioning trust funds are summarized below:


	Amortized Cost		Total Unrealized Gains⁽¹⁾		Total Unrealized Losses⁽¹⁾			Fair Value
(millions)
March 31, 2014
Marketable equity securities:
U.S. Large Cap	$	522	$	523	$	—		$	1,045
Marketable debt securities:
Corporate bonds		211		9		(1	)		219
U.S. Treasury securities and agency debentures		217		2		(2	)		217
State and municipal		175		7		(1	)		181
Other		1		—		—			1
Cost method investments		99		—		—			99
Cash equivalents and other⁽²⁾		34		—		—			34

Total	$	1,259	$	541	$	(4	)⁽³⁾	$	1,796

December 31, 2013
Marketable equity securities:
U.S.:
Large Cap	$	506	$	514	$	—		$	1,020
Other		25		11		—			36
Marketable debt securities:
Corporate bonds		185		8		(2	)		191
U.S. Treasury securities and agency debentures		214		1		(3	)		212
State and municipal		163		4		(4	)		163
Cost method investments		106		—		—			106
Cash equivalents and other⁽²⁾		37		—		—			37

Total	$	1,236	$	538	$	(9	)⁽³⁾	$	1,765

(1)	Included in AOCI and the decommissioning trust regulatory liability.

(2)	Includes pending purchases of securities of $15 million and pending sales of securities of $6 million at March 31, 2014 and December 31, 2013, respectively.

(3)	The fair value of securities in an unrealized loss position was $211 million and $299 million at March 31, 2014 and December 31, 2013, respectively.

The fair value of Virginia Power’s marketable debt securities at March 31, 2014 by contractual maturity is as follows:


	Amount
(millions)
Due in one year or less	$	41
Due after one year through five years		161
Due after five years through ten years		232
Due after ten years		184

Total	$	618

PAGE 39

Presented below is selected information regarding Virginia Power’s marketable equity and debt securities.


	Three Months Ended March 31,
	2014		2013
(millions)
Proceeds from sales	$	204	$	189
Realized gains⁽¹⁾		19		16
Realized losses⁽¹⁾		3		3

(1)	Includes realized gains and losses recorded to the decommissioning trust regulatory liability.

Other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds for Virginia Power were not material for the three months ended March 31, 2014 and 2013.

Note 11. Regulatory Assets and Liabilities

Regulatory assets and liabilities include the following:


	March 31, 2014		December 31, 2013
(millions)
Dominion
Regulatory assets:
Deferred rate adjustment clause costs⁽¹⁾	$	71	$	89
Unrecovered gas cost⁽²⁾		24		50
Derivatives⁽³⁾		5		16
Other		47		62

Regulatory assets-current⁽⁴⁾		147		217

Unrecognized pension and other postretirement benefit costs⁽⁵⁾		695		706
Deferred rate adjustment clause costs⁽¹⁾		263		287
Deferred cost of fuel used in electric generation⁽⁶⁾		249		1
Income taxes recoverable through future rates⁽⁷⁾		156		155
Derivatives⁽³⁾		44		16
Other		84		63

Regulatory assets-non-current		1,491		1,228

Total regulatory assets	$	1,638	$	1,445

Regulatory liabilities:
PIPP⁽⁸⁾	$	87	$	76
Other		73		52

Regulatory liabilities-current⁽⁹⁾		160		128

Provision for future cost of removal and AROs⁽¹⁰⁾		1,040		1,028
Decommissioning trust⁽¹¹⁾		712		693
Deferred cost of fuel used in electric generation⁽⁶⁾		6		90
Other		189		190

Regulatory liabilities-non-current		1,947		2,001

Total regulatory liabilities	$	2,107	$	2,129

Virginia Power
Regulatory assets:
Deferred rate adjustment clause costs⁽¹⁾	$	65	$	62
Derivatives⁽³⁾		5		16
Other		46		50

Regulatory assets-current⁽⁴⁾		116		128

Deferred cost of fuel used in electric generation⁽⁶⁾		2491
Deferred rate adjustment clause costs⁽¹⁾		198		227
Income taxes recoverable through future rates⁽⁷⁾		126		124
Derivatives⁽³⁾		44		16
Other		47		49

Regulatory assets-non-current		664		417

Total regulatory assets	$	780	$	545

Regulatory liabilities:
Other	$	58	$	41

Regulatory liabilities-current⁽⁹⁾		58		41

Provision for future cost of removal⁽¹⁰⁾		818		807
Decommissioning trust⁽¹¹⁾		712		693
Deferred cost of fuel used in electric generation⁽⁶⁾		6		90
Other		6		7

Regulatory liabilities-non-current		1,542		1,597

Total regulatory liabilities	$	1,600	$	1,638

PAGE 40

(1)	Reflects deferrals under the electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects. See Note 12 for more information.

(2)	Reflects unrecovered gas costs at Dominion’s regulated gas operations, which are recovered through filings with the applicable regulatory authority.

(3)	For jurisdictions subject to cost-based rate regulation, changes in the fair value of derivative instruments result in the recognition of regulatory assets or regulatory liabilities as they are expected to be recovered from or refunded to customers.

(4)	Current regulatory assets are presented in other current assets in Dominion’s and Virginia Power’s Consolidated Balance Sheets.

(5)	Represents unrecognized pension and other postretirement employee benefit costs expected to be recovered through future rates generally over the expected remaining service period of plan participants by certain of Dominion’s rate-regulated subsidiaries.

(6)	Primarily reflects deferred fuel expenses for the Virginia jurisdiction of Virginia Power’s generation operations.

(7)

Amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC-equity and depreciation of property, plant and equipment for which deferred income taxes were not recognized for ratemaking purposes, including amounts attributable to tax rate changes.

(8)	Under PIPP, eligible customers can receive energy assistance based on their ability to pay. The difference between the customer’s total bill and the PIPP plan amount is deferred and collected or returned annually under the PIPP rider according to East Ohio tariff provisions.

(9)	Current regulatory liabilities are presented in other current liabilities in Dominion’s and Virginia Power’s Consolidated Balance Sheets.

(10)	Rates charged to customers by the Companies’ regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.

(11)

Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon) for the future decommissioning of Virginia Power’s utility nuclear generation stations, in excess of the related AROs.

At March 31, 2014, approximately $124 million of Dominion’s and $82 million of Virginia Power’s regulatory assets represented past expenditures on which they do not currently earn a return. These expenditures are expected to be recovered within the next two years.

Note 12. Regulatory Matters

Regulatory Matters Involving Potential Loss Contingencies

As a result of issues generated in the ordinary course of business, Dominion and Virginia Power are involved in various regulatory matters. Certain regulatory matters may ultimately result in a loss; however, as such matters are in an initial procedural phase, involve uncertainty as to the outcome of pending reviews or orders, and/or involve significant factual issues that need to be resolved, it is not possible for the Companies to estimate a range of possible loss. For matters for which the Companies cannot estimate a range of possible loss, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the regulatory process such that the Companies are able to estimate a range of possible loss. For regulatory matters for which the Companies are able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any estimated range is based on currently available information, involves elements of judgment and significant uncertainties and may not represent the Companies’ maximum possible loss exposure. The circumstances of such regulatory matters will change from time to time and actual results may vary significantly from the current estimate. For current matters not specifically reported below, management does not anticipate that the outcome from such matters would have a material effect on Dominion’s or Virginia Power’s financial position, liquidity or results of operations.

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FERC – Electric

Under the Federal Power Act, FERC regulates wholesale sales and transmission of electricity in interstate commerce by public utilities. Dominion’s merchant generators sell electricity in the PJM, MISO and ISO-NE wholesale markets under Dominion’s market-based sales tariffs authorized by FERC. Virginia Power purchases and, under its FERC market-based rate authority, sells electricity in the wholesale market. In addition, Virginia Power has FERC approval of a tariff to sell wholesale power at capped rates based on its embedded cost of generation. This cost-based sales tariff could be used to sell to loads within or outside Virginia Power’s service territory. Any such sales would be voluntary.

Rates

In April 2008, FERC granted an application for Virginia Power’s electric transmission operations to establish a forward-looking formula rate mechanism that updates transmission rates on an annual basis and approved an ROE of 11.4%, effective as of January 1, 2008. The formula rate is designed to recover the expected revenue requirement for each calendar year and is updated based on actual costs. The FERC-approved formula method, which is based on projected costs, allows Virginia Power to earn a current return on its growing investment in electric transmission infrastructure.

In March 2010, ODEC and NCEMC filed a complaint with FERC against Virginia Power claiming that approximately $223 million in transmission costs related to specific projects were unjust, unreasonable and unduly discriminatory or preferential and should be excluded from Virginia Power’s transmission formula rate. In October 2010, FERC issued an order dismissing the complaint in part and established hearings and settlement procedures on the remaining part of the complaint. In February 2012, Virginia Power submitted to FERC a settlement agreement to resolve all issues set for hearing. The settlement was accepted by FERC in May 2012 and provides for payment by Virginia Power to the transmission customer parties collectively of $250,000 per year for ten years and resolves all matters other than allocation of the incremental cost of certain underground transmission facilities.

In March 2014, FERC issued an order excluding from Virginia Power’s transmission rates for wholesale transmission customers located outside Virginia the incremental costs of undergrounding certain transmission line projects. FERC found it is not just and reasonable for non-Virginia wholesale transmission customers to be allocated the incremental costs of undergrounding the facilities because the projects are a direct result of Virginia legislation and Virginia Commission pilot programs intended to benefit the citizens of Virginia. The order is retroactively effective as of March 2010 and will cause the reallocation of the costs charged to wholesale transmission customers outside Virginia to wholesale transmission customers in Virginia. FERC determined that there was not sufficient evidence on the record to determine the magnitude of the underground increment and ordered a hearing to determine the appropriate amount of undergrounding cost to be allocated to each wholesale transmission customer in Virginia. The hearing is held in abeyance pending settlement proceedings ordered by FERC. While Virginia Power cannot predict the outcome of the hearing and settlement proceedings, it is not expected to have a material effect on results of operations.

Other Regulatory Matters

Other than the following matters, there have been no significant developments regarding the pending regulatory matters disclosed in Note 13 to the Consolidated Financial Statements in Dominion’s and Virginia Power’s Annual Report on Form 10-K for the year ended December 31, 2013.

Virginia Regulation

Rate Adjustment Clauses

Below are developments to significant riders associated with various Virginia Power projects:

•

The Virginia Commission previously approved Rider B in conjunction with the conversion of three power stations to biomass. In February 2014, the Virginia Commission approved an approximately $15 million revenue requirement for the rate year beginning April 1, 2014, which represents a $3 million increase to the revenue requirement over the previous year.

•

The Virginia Commission previously approved Rider S in conjunction with the Virginia City Hybrid Energy Center. In March 2014, the Virginia Commission approved an approximately $239 million revenue requirement for the rate year beginning April 1, 2014, which represents a $9 million decrease to the revenue requirement versus the previous year.

•

The Virginia Commission previously approved Rider W in conjunction with Warren County. In February 2014, the Virginia Commission approved an approximately $98 million revenue requirement for the rate year beginning April 1, 2014, which represents a $15 million increase to the revenue requirement over the previous year.

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North Anna COL

Virginia Power is considering the construction of a third nuclear unit at a site located at North Anna. If Virginia Power decides to build a new unit, it must first receive a COL from the NRC, approval of the Virginia Commission and certain environmental permits and other approvals. In April 2013, Virginia Power decided to replace the reactor design previously selected for a potential unit with ESBWR technology. Virginia Power filed the first of its two-part amendment to the COL application with the NRC in July 2013 to reflect the ESBWR technology and filed the second part of the amendment in December 2013. The COL is expected in 2016. Virginia Power has not yet committed to building a new nuclear unit at North Anna.

In February 2014, BREDL filed a petition with NRC seeking to stay final decision making in the COL proceeding until a rulemaking petition filed by a number of environmental groups several weeks earlier is resolved. The suspension request and underlying petition for rulemaking are based on analyses of the consequences of a spent fuel pool fire, but none of the analyses relates specifically to the ESBWR design. Substantially identical suspension petitions and contentions were filed by various intervenor groups in other licensing proceedings pending before the NRC. In March 2014, BREDL filed a motion to reopen the COL proceeding on seismic issues under a previous ruling of the ASLB. No other issues were raised by BREDL in its filing. Virginia Power and the NRC Staff have filed answers opposing both the motion and petition.

North Anna and Offshore Wind Legislation

In April 2014, the Virginia Governor signed legislation into law that permits Virginia Power to recover 70% of the costs previously deferred or capitalized related to the development of a third nuclear unit located at North Anna and the development of offshore wind facilities through December 31, 2013 as part of the 2013 and 2014 base rates. Virginia Power has deferred or capitalized costs totaling $577 million for these projects as of December 31, 2013, substantially all of which relate to North Anna. For the portion of these previously deferred or capitalized costs allocable to customers in Virginia, Virginia Power will recognize 70% as a charge against net income in 2014. The remaining deferred or capitalized costs, as well as costs incurred after December 31, 2013, continue to be eligible for inclusion in a future rate adjustment clause. The legislation goes into effect July 1, 2014.

Ohio Regulation

PIR Program

In 2008, East Ohio began PIR, aimed at replacing approximately 20% of its pipeline. In February 2014, East Ohio filed an application with the Ohio Commission requesting approval to adjust the PIR cost recovery rates for 2013 costs. The application includes a gross plant investment for 2013 of $164 million, a cumulative gross plant investment of $674 million and an estimated revenue requirement of $89 million. This application was approved by the Ohio Commission in April 2014.

FERC Regulation

DTI Settlement

In mid-2013, DTI received concerns about its fuel retainage percentages and apparent over-recovery of fuel costs during certain time periods reflected in its annual fuel reports. In December 2013, DTI submitted for FERC approval of a stipulation and agreement addressing, among other things, reductions in its fuel retainage percentages and a rate moratorium through 2016. In February 2014, FERC approved the stipulation and agreement.

The revised fuel retainage percentages became effective January 1, 2014. DTI began assessing the reduced fuel retainage percentages on March 1, 2014, and as a result provided refunds totaling nearly $10 million. The refunds reflect, with interest, the value of the difference between the actual quantities of fuel retained for the months of January and February and the quantities that would have been retained using the reduced percentages. The reduction in fuel retention is expected to reduce DTI’s revenues by approximately $35 million in 2014.

Note 13. Variable Interest Entities

As discussed in Note 15 to the Consolidated Financial Statements in Dominion’s and Virginia Power’s Annual Report on Form 10-K for the year ended December 31, 2013, certain variable pricing terms in some of the Companies’ long-term power and capacity contracts cause them to be considered variable interests in the counterparties.

Virginia Power has long-term power and capacity contracts with four non-utility generators with an aggregate summer generation capacity of approximately 870 MW. These contracts contain certain variable pricing mechanisms in the form of partial fuel reimbursement that Virginia Power considers to be variable interests. After an evaluation of the information provided by these entities, Virginia Power was unable to determine whether they were VIEs. However, the information they provided, as well as Virginia Power’s knowledge of generation facilities in Virginia, enabled Virginia Power to conclude that, if they were VIEs, it would not be the primary beneficiary. This conclusion reflects Virginia Power’s determination that its variable interests do not convey the power to direct the most significant activities that impact the economic performance of the entities during the remaining terms of Virginia Power’s contracts and for the years the entities are expected to operate after its contractual relationships expire. The contracts expire at various dates ranging from 2015 to 2021. Virginia Power is not subject

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to any risk of loss from these potential VIEs other than its remaining purchase commitments which totaled $807 million as of March 31, 2014. Virginia Power paid $56 million and $55 million for electric capacity and $54 million and $20 million for electric energy to these entities in the three months ended March 31, 2014 and 2013, respectively.

Virginia Power purchased shared services from DRS, an affiliated VIE, of approximately $108 million and $77 million for the three months ended March 31, 2014 and 2013, respectively. Virginia Power determined that it is not the most closely associated entity with DRS and therefore not the primary beneficiary. DRS provides accounting, legal, finance and certain administrative and technical services to all Dominion subsidiaries, including Virginia Power. Virginia Power has no obligation to absorb more than its allocated share of DRS costs.

Note 14. Significant Financing Transactions

Credit Facilities and Short-term Debt

Dominion and Virginia Power use short-term debt to fund working capital requirements and as a bridge to long-term debt financings. The levels of borrowing may vary significantly during the course of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations. In addition, Dominion utilizes cash and letters of credit to fund collateral requirements. Collateral requirements are impacted by commodity prices, hedging levels, Dominion’s credit ratings and the credit quality of its counterparties.

At March 31, 2014, Dominion’s commercial paper and letters of credit outstanding, as well as its capacity available under credit facilities, were as follows:

Facility
Limit

Outstanding
Commercial
Paper

Outstanding
Letters of
Credit

Facility
Capacity
Available

(millions)

Joint revolving credit facility⁽¹⁾

3,000

1,972

—

1,028

Joint revolving credit facility⁽²⁾

500

—

237

263

Total

3,500

1,972

237

1,291

(1)	This credit facility has a maturity date of September 2018, and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.5 billion of letters of credit.

(2)	This credit facility has a maturity date of September 2018, and can be used to support bank borrowings, commercial paper and letter of credit issuances.

Virginia Power’s short-term financing is supported by two joint revolving credit facilities with Dominion. These credit facilities are being used for working capital, as support for the combined commercial paper programs of Dominion and Virginia Power and for other general corporate purposes.

At March 31, 2014, Virginia Power’s share of commercial paper and letters of credit outstanding, as well as its capacity available under its joint credit facilities with Dominion were as follows:


	Facility Sub-limit		Outstanding Commercial Paper		Outstanding Letters of Credit		Facility Sub-limit Capacity Available
(millions)
Joint revolving credit facility⁽¹⁾	$	1,000	$	503	$	—	$	497
Joint revolving credit facility⁽²⁾		250		—		53		197

Total	$	1,250	$	503	$	53	$	694

(1)

This credit facility has a maturity date of September 2018, and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.5 billion (or the sub-limit, whichever is less) of letters of credit. Virginia Power’s current sub-limit under this credit facility can be increased or decreased multiple times per year.

(2)	This credit facility has a maturity date of September 2018, and can be used to support bank borrowings, commercial paper and letter of credit issuances. Virginia Power’s current sub-limit under this credit facility can be increased or decreased multiple times per year.

In addition to the credit facility commitments mentioned above, Virginia Power also has a $120 million credit facility with a maturity date of September 2018. As of March 31, 2014, this facility supports approximately $119 million of certain variable rate tax-exempt financings of Virginia Power.

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Long-term Debt

In February 2014, Virginia Power issued $350 million of 3.45% senior notes, and $400 million of 4.45% senior notes, that mature in 2024, and 2044, respectively.

In March 2014, Dominion issued $400 million of 1.25% senior notes that mature in 2017.

In February 2014, Virginia Power provided notice to redeem the $10 million 2.5% and the $30 million 2.5% Industrial Development Authority of the Town of Louisa, Virginia Solid Waste and Sewage Disposal Revenue Bonds, Series 1997A and 2000A, that would otherwise mature in April 2022 and September 2030, respectively. At March 31, 2014, the bonds were included in securities due within one year in Virginia Power’s Consolidated Balance Sheets. In April 2014, Virginia Power redeemed the bonds for $40 million, the amount of principal then outstanding plus accrued interest.

Convertible Securities

At March 31, 2014, Dominion had $40 million of outstanding contingent convertible senior notes that are convertible by holders into a combination of cash and shares of Dominion’s common stock under certain circumstances. The conversion feature requires that the principal amount of each note be repaid in cash, while amounts payable in excess of the principal amount will be paid in common stock. The conversion rate is subject to adjustment upon certain events such as subdivisions, splits, combinations of common stock or the issuance to all common stock holders of certain common stock rights, warrants or options and certain dividend increases. As of March 31, 2014, the conversion rate had been adjusted, primarily due to individual dividend payments above the level paid at issuance, to 29.9961 shares of common stock per $1,000 principal amount of senior notes, which represents a conversion price of $33.34. If the outstanding notes as of March 31, 2014 were all converted, it would result in the issuance of approximately 600,000 additional shares of common stock.

The senior notes are eligible for conversion during any calendar quarter when the closing price of Dominion’s common stock was equal to or higher than 120% of the conversion price for at least 20 out of the last 30 consecutive trading days of the preceding quarter, the notes are called for redemption by Dominion and upon the occurrence of certain other conditions. During the first quarter of 2014, the senior notes were eligible for conversion and approximately $3 million of the notes were converted by holders into $3 million of common stock. The senior notes are eligible for conversion during the second quarter of 2014.

Preferred Stock

In February 2014, Virginia Power provided irrevocable notice to redeem all 1,250,000 outstanding shares of its Flex MMP Stock. In March 2014, Virginia Power redeemed the stock at a price of $100 per share plus accumulated and unpaid dividends at a rate reset in March 2011 of 6.12%. Dividends ceased accumulating on the stock upon payment of the redemption price, thus the rate was not reset in March 2014.

Issuance of Common Stock

Dominion maintains Dominion Direct® and a number of employee savings plans through which contributions may be invested in Dominion’s common stock. These shares may either be newly issued or purchased on the open market with proceeds contributed to these plans. In January 2014, Dominion began purchasing its common stock on the open market for these plans. In April 2014, Dominion began issuing new common shares for these direct stock purchase plans.

Note 15. Commitments and Contingencies

As a result of issues generated in the ordinary course of business, Dominion and Virginia Power are involved in legal proceedings before various courts and are periodically subject to governmental examinations (including by regulatory authorities), inquiries and investigations. Certain legal proceedings and governmental examinations involve demands for unspecified amounts of damages, are in an initial procedural phase, involve uncertainty as to the outcome of pending appeals or motions, and/or involve significant factual issues that need to be resolved, such that it is not possible for the Companies to estimate a range of possible loss. For such matters that the Companies cannot estimate, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the litigation or investigative processes such that the Companies are able to estimate a range of possible loss. For legal proceedings and governmental examinations for which the Companies are able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any accrued liability is recorded on a gross basis with a receivable also recorded for any probable insurance recoveries. Estimated ranges of loss are inclusive of legal fees and net of any anticipated insurance recoveries. Any estimated range is based on currently available information, involves elements of judgment and significant uncertainties and may not represent the Companies’ maximum possible loss exposure. The circumstances of such legal proceedings and governmental examinations will change from time to time and actual results may vary significantly from the current estimate. For current proceedings not specifically reported below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on Dominion’s or Virginia Power’s financial position, liquidity or results of operations.

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Environmental Matters

Dominion and Virginia Power are subject to costs resulting from a number of federal, state and local laws and regulations designed to protect human health and the environment. These laws and regulations affect future planning and existing operations. They can result in increased capital, operating and other costs as a result of compliance, remediation, containment and monitoring obligations.

Air

The CAA, as amended, is a comprehensive program utilizing a broad range of regulatory tools to protect and preserve the nation’s air quality. At a minimum, states are required to establish regulatory programs to address all requirements of the CAA. However, states may choose to develop regulatory programs that are more restrictive. Many of Dominion’s and Virginia Power’s facilities are subject to the CAA’s permitting and other requirements.

The EPA established CAIR with the intent to require significant reductions in SO₂ and NO_Xemissions from electric generating facilities. In July 2008, the U.S. Court of Appeals for the D.C. Circuit issued a ruling vacating CAIR. In December 2008, the Court denied rehearing, but also issued a decision to remand CAIR to the EPA. In July 2011, the EPA issued a replacement rule for CAIR, called CSAPR, that required 28 states to reduce power plant emissions that cross state lines. CSAPR established new SO₂ and NO_x emissions cap and trade programs that were completely independent of the current ARP. Specifically, CSAPR required reductions in SO₂ and NO_x emissions from fossil fuel-fired electric generating units of 25 MW or more through annual NO_x emissions caps, NO_x emissions caps during the ozone season (May 1 through September 30) and annual SO₂ emission caps with differing requirements for two groups of affected states.

Following numerous petitions by industry participants for review and motions for stay, the U.S. Court of Appeals for the D.C. Circuit issued a ruling in December 2011 to stay CSAPR pending judicial review. In February and June 2012, the EPA issued technical revisions to CSAPR that were not material to Dominion. In August 2012, the court vacated CSAPR in its entirety and ordered the EPA to implement CAIR until a valid replacement rule is issued. In October 2012, the EPA filed a petition requesting a rehearing of the court’s decision, which was denied in January 2013. The mandate vacating CSAPR was issued in February 2013. In March 2013, the EPA and several environmental groups filed petitions with the U.S. Supreme Court requesting review of the decision to vacate and remand CSAPR. In June 2013, the U.S. Supreme Court granted the EPA’s petition seeking review of the D.C. Circuit’s decision that vacated and remanded CSAPR. With respect to Dominion’s generation fleet, the cost to comply with CAIR is not expected to be material. Future outcomes of litigation and/or any additional action to issue a revised rule could affect the assessment regarding cost of compliance.

In May 2012, the EPA issued final designations for the 75-ppb ozone air quality standard. Several Dominion electric generating facilities are located in areas impacted by this standard. As part of the standard, states will be required to develop and implement plans to address sources emitting pollutants which contribute to the formation of ozone. Until the states have developed implementation plans, Dominion is unable to predict whether or to what extent the new rules will ultimately require additional controls.

Water

The CWA, as amended, is a comprehensive program utilizing a broad range of regulatory tools including a permit program to authorize and regulate discharges to surface waters with strong enforcement mechanisms. Dominion and Virginia Power must comply with applicable aspects of the CWA program at their operating facilities.

In September 2010, Millstone’s NPDES permit was reissued under the CWA. The conditions of the permit require an evaluation of control technologies that could result in additional expenditures in the future. The report summarizing the results of the evaluation was submitted in August 2012 and is under review by the Connecticut Department of Energy and Environmental Protection. Dominion cannot currently predict the outcome of this review. In October 2010, the permit issuance was appealed to the state court by a private plaintiff. The permit is expected to remain in effect during the appeal. Dominion is currently unable to make an estimate of the potential financial statement impacts related to this matter.

Solid and Hazardous Waste

The CERCLA, as amended,