Nuclear’s Role in the Clean Energy Mix

The Energy Bar Mid-Year Meeting on Energy Markets, Renewable Energy and Change

Washington, DCDecember 3, 2009

David HeacockPresident and Chief Nuclear Officer, Dominion Nuclear

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Dominion at a Glance

DominionGeneration

DominionEnergy

DominionVirginia Power

Regulated Generation

Merchant Generation

Gas Distribution

Gas Transmission and Storage

Producer Services

Appalachian E&P

Electric Distribution

Electric Transmission

Unregulated Retail

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Diverse, Balanced Generation Mix

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100 Largest U.S. Power Producers(Pounds CO2 per MWh Output)

Source: Natural Resources Defense Council, 2008 Study

Dominion

Low Carbon Intensity

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Increasing Demand for Energy

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Peak Demand (Megawatts)

18,000

20,000

16,000

22,000

Current generating capacityProjected Dominion peak demand—PJM Forecast

2009 2019

AdditionalDeficit of

4,600 MWby 2019

Mounting Energy Gap

*Updated 2009 to reflect projected demand growth between 2009 and 2019.

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Additional Usage By Existing Customers 40% of Growth

Added Sq Ft per House Flat Screen TV Home Computer Networks New Appliances Digital Displays

New Usage By New Customers 60% of Growth

Historically, 50,000 Connects 2009: 30,000 Connects Transportation Growth Military Expansion Data Centers

Demand Growth

750000800000

850000900000

9500001000000

1050000

Year

MW

17,00018,00019,00020,00021,00022,00023,00024,000

MW

US Dominion

Dominion 2.2%

US 1.7%

Distribution Growth Drivers

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Ft. Belvoir 22 Projects on Base 19,000 New Residents in 3 Yrs Initial Capacity 56 MVA 230 kV Transmission Supply Eventual Build Out 100 MVA

Ft. Lee 6 Major Facilities 7 million Additional Sq Ft Initial Capacity 15 MVA Eventual Build Out 33 MVA

Military Expansions:Base Realignment and Closure (BRAC)

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New Silver Line Rail Northern Virginia Phase I - 2013; Phase II - 2016 Tyson’s Corner Impact

– 88 million Sq Ft added– 100,000 new jobs– 83,000 residents– Build Out 480-830 MVA

Relocation Work Begins January 2009

Norfolk Light Rail $232 M Project 7.4 miles across Downtown Norfolk 11 Passenger Stations Began 2007; Complete 2010 Transport 6,000–12,000 daily

New Transportation Corridors

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Existing

36 Data Centers

200 MW of Existing Load

3% of Northern Virginia Load

Future (by 2013)

50 Data Centers

700 MW of Future Load

10% of Northern Virginia Load

Data Centers, 2009 and Beyond: 24 / 7 Load Factor

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Strategy for Meeting Growing Demand

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Conservation will help meet Virginia’s growing energy needs while protecting the environment

Dominion is fully committed to state’s goal of reducing energy consumption by 10 percent by 2022

Conservation: Critical to Virginia’s Future

Dominion is developing portfolio of demand-side management programs and evaluating “smart” technologies

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Demand Response: Reduces peak electricity demand, often by

shifting usage to off-peak hours Improves reliability Easily measured and verified

Conservation: Reduces consumption of electricity Produces environmental benefits Poses new set of challenges:

Requires change in customer behavior Harder to measure and verify

Demand-Side Management: Two Key Elements

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Key component of Dominion’s Energy Conservation strategy

Customers in Midlothian and Charlottesville participating in smart metering demonstration projects

Customers save through the delivery of more efficient operating voltages to their homes

Other benefits include:– improved outage reporting– new time-sensitive pricing

Smart Metering Technology

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Trabue Demonstration: 6,700 meters Charlottesville Demonstration: 45,000 meters Initial loss reduction focus areas include

– Conserving off-peak voltage and monitoring through AMI technology

Successful demonstration of project on Trabue Circuit (Midlothian)

– 5% voltage reduction using AMI technology has been demonstrated– Average energy savings per 1% reduction exceeds 0.8%– Trabue test results confirm full deployment savings of 2.34 million MWH

per year or 2.79% of the total system load– Demonstrated energy savings from Voltage Conservation confirms

previously announced customer savings (and have risen to $1.7 billion over 15 years)

Voltage Conservation

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Federal RPS is under development Dominion’s existing utility-owned renewable assets reach 2%

level Dominion is growing its renewable project portfolio To comply with RPS requirements, Dominion needs:

– 4% by 2010– 7% by 2016– 12% by 2022– 15% by 2025 (recently signed by Gov. Kaine)

Evaluating all available options to meet targets:– Existing utility-owned renewable generation– Build new renewable facilities in Virginia– Purchase RECs / renewable energy

Virginia RPS

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Dominion’s Renewable Assets

Biomass

Wind

Hydro

89 MW

282 MW

327 MW

OperatingUnder

Development

217 MW

695 MW

Total

306 MW

977 MW

327 MW

TOTAL RENEWABLE ASSETS: 1610 MW

Bath County: Dominion’s pumped storage facility helps make renewable energy dispatchable.

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Infrastructure Growth PlanExpanding Renewable Generation Portfolio

Facility Status Capacity

<<<<< Biomass >>>>>

Pittsylvania Operating 83 MW

Altavista Operating 6 MW

VCHEC 1 Construction 117 MW

Undisclosed Development 4 100 MW

Biomass Subtotal >>> 306 MW

<<<<< Wind >>>>>

NedPower 2 Operating 132 MW

Fowler Ridge I 2 Operating 150 MW

Fowler Ridge II Development 4 150 MW

Prairie Fork Development 4 300 MW

Virginia Wind 2,3 Development 4 245 MW

Wind Subtotal >>> 977 MW

Total Biomass and Wind 1,283 MW1) Assumes 20% co-firing

2) Dominion’s 50% share

3) Includes Wise County and Tazewell County as well as other undisclosed facilities

4) Development projects are subject to change

Pittsylvania

Altavista

NedPower

Fowler

Ridge I-II

Prairie Fork

VCHEC

Tazewell County/VA WindWise County/VA Wind

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Nuclear - Part of the Solution

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U.S. Electric Net Generation by Source, 2008

Source: NRC 2009-2010 Information Digest – DOE/EIA

Monthly Energy Review, March 2009

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Fuel TypeAverage Capacity Factors

(%)

Nuclear 91.5

Coal (Steam Turbine) 70.8

Gas (Combined Cycle) 41.7

Gas (Steam Turbine) 14.6

Oil (Steam Turbine) 12.6

Hydro 27.4

Wind 31.1

Solar 21.1

U.S. Capacity Factors by Fuel Type

Source: NEI - Ventyx Velocity Suite / Energy Information

Administration

Updated: 4/09

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U.S. Nuclear Industry Capacity Factors (1971 – 2008)

Source: NEI - Energy Information AdministrationUpdated: 4/09

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U.S. Average Plant Production Expenses $/Mwhr

Source: NRC 2009 – 2010 Information Digest – FERC Form 1

and DOE/EIA Electric Power Annual 2008

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U.S. Electricity Production Costs 1995-2008, In 2008 cents per kilowatt-hour

Production Costs = Operations and Maintenance Costs + Fuel Costs. Production costs do not include indirect costs and are based on FERC Form 1 filings submitted by regulated utilities. Production costs are modeled for utilities that are not regulated.Source: Ventyx Velocity SuiteUpdated: 5/09

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Nuclear Economic Benefits

$430 M in sales of goods and services

$40 M in total labor income

Every $1 spent by plant => creates $1.07 in local community

$20 M/yr in state and local tax revenue

$75M/yr in federal tax payments

400-700 permanent jobs at operating units

1,400 – 1,800 during construction

Forward price stability – fuel costs small

Source: NEI

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Value of Environmental Benefits

Avg nuclear plant avoids

10,000 tons of nitrogen oxides

32,000 tons of sulfur dioxide

Equates to value of $4.7 M/yr

Avg nuclear plant prevents 7 M metric tons of carbon dioxide

Equates to projected value of $130 – 208 M/yr

Currently 20+ new reactors under consideration in U.S.

Investment of $6 – 8 B /per unit, depend on size

Source: NEI

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Two Ways to Increase Nuclear Slice

UpratesImproved measurement

More efficient turbines

New Build5 Technologies

Least Costly Alternative

Carbon free

Challenge – can they be built in time

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Uprate Facts

Jan 2009 124 uprates => 5,640 Mwe, equivalent to five new reactors

NRC reviewing or anticipating additional applications totaling 2,333 Mwe

March 2009 nuclear accounts for approximately 19.7% of U.S. net electrcial generation at 806 billion kilowatthours

Source: NRC 2009-2010 Information Digest

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New Nuclear

ESP – Early Site Permit NRC has issue three (including one at the North Anna site)

DC – Design Certifications Issued four Five under review

Combined Operating License Reviewing 13 applications for 22 reactors

Source: NRC 2009-2010 Information Digest

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Timing – The Real Challenge

1980’s: Worldwide - 218 power reactors, average of one every 17 days U.S. – average of one every 77 days

Today China as of October 2009

11 operable, 8587 MWe 17 under construction, 17,540 MWe 34 planned, 36,380 MWe 90 proposed, 79,000 Mwe

U.S. as of October 2009 104 operable, 101,119 MWe 1 under construction, 1,180 MWe 11 planned, 13,800 MWe 19 proposed, 25,000 Mwe

Act Now

Source: World Nuclear Associationhttp://world-nuclear.org/info/reactors.html

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Nuclear – Is the Solution

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Positive Trend in Safety Performance

Reactor Scrams Actuations

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Wise County project meets baseload energy needs and has strong environmental features

Will produce 585 MW of power using DOE-designated clean coal technology

Virginia City Hybrid Energy Center

Complete environmental package:– Protects air quality; minimizes water

use– Uses waste coal and biomass

Sponsoring research at Virginia Tech to determine feasibility of carbon capture and storage technology

Small-scale testing under way near Center

Delete? Or change previous slide

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Uprates add approximately 300 MW of new nuclear generation across our nuclear fleet (except Kewaunee)

North Anna Unit 3 will use advanced nuclear technology with no carbon emissions

– Early Site Permit (ESP) received approval in November 2007; submitted Combined Operating License (COL) application to build and operate in November 2007

– Commercial operation by 2016 / 2017– Third unit would boost Dominion’s percentage of power produced by

nuclear almost 10 percent in about 10 years

Increasing Nuclear Capacity:Uprates and North Anna Unit 3