DOMINION ENERGY, INC Annual Report, Year Ended Dec 31, 2006

Dominion Energy, Inc. (D) reported a strong financial performance for the fiscal year ended December 31, 2006, marked by a significant increase in net income to $1.38 billion, up from $1.03 billion in the prior year. This growth was driven by higher natural gas and oil production, improved realized prices in its merchant generation business, and contributions from its nonregulated retail energy marketing operations. The company is strategically repositioning itself by announcing its intent to sell most of its oil and natural gas E&P operations, excluding those in the Appalachian Basin, to focus on its core electric utility and energy distribution, transmission, and storage businesses. This move is expected to reduce exposure to commodity price volatility and align the company more closely with its peer group of utilities. Significant developments in 2006 included acquisitions such as Pablo Energy, LLC and the Kewaunee nuclear power station, alongside the sale of gas and oil properties. The company also entered into agreements to sell two regulated gas distribution subsidiaries and three natural gas-fired merchant generation peaking facilities. These strategic transactions are aimed at refining the company's asset portfolio and strengthening its financial profile. The company also announced an increase in its quarterly dividend rate in early 2007, signaling confidence in its future cash flows.