What is the primary purpose of this 8-K filing?

This 8-K filing is to inform investors about a significant settlement agreement reached by Dominion Energy's subsidiary, Virginia Power, regarding its base rate proceeding in Virginia. The settlement, if approved, will determine future electricity rates, refunds, and authorized returns for customers in Virginia.

What are the financial implications of the proposed settlement for Dominion Energy?

The settlement involves significant customer credits, including a $268 million credit from past base rate revenues and a $129 million credit related to fuel revenues and financial transmission rights. It also requires refunds of interim collected rates with interest. The authorized ROE of 11.9% for base rates and 11.3% for other clauses will impact future earnings. The company will also write off any excess charges related to certain generation riders and transmission costs exceeding $268 million through December 31, 2010.

What is the expected timeline for a final decision on the settlement?

A final decision by the Virginia State Corporation Commission on the proposed settlement is anticipated in the fourth quarter of 2009 or the first quarter of 2010.

What are the potential risks if the settlement is not approved?

If the Virginia Commission denies the settlement, it could continue its review of base rates and rate adjustment filings. This could lead to a potentially higher rate increase, a rate decrease, or a requirement to refund earnings if they exceed the authorized return on equity by more than 50 basis points, creating further uncertainty for the company and its investors.

D 8-K: Regulation FD — Nov 5, 2009

Summary

Dominion Energy, Inc. (D), through its subsidiary Virginia Power, has entered into a settlement agreement with various parties, including the Office of the Attorney General of Virginia and major customer groups, concerning a significant base rate proceeding. The proposed settlement aims to resolve disputes over electricity rates, fuel costs, and authorized returns. If approved by the Virginia State Corporation Commission, the agreement would largely reset base rates to pre-September 1, 2009 levels, requiring Virginia Power to refund amounts collected on an interim basis since that date, along with interest. The settlement also establishes an authorized return on equity (ROE) of 11.9% for base rates and 11.3% for specific rate adjustment clauses. Furthermore, Virginia Power will issue substantial credits to customer bills, totaling $268 million from past base rate revenues and $129 million related to fuel revenues and financial transmission rights. The Virginia Commission's decision is anticipated in late 2009 or early 2010, with potential outcomes ranging from full approval to denial or modification of the settlement.

Key Highlights

1Dominion Energy subsidiary Virginia Power reached a settlement agreement on proposed base rate increases with the Virginia Attorney General and major customer groups.
2The settlement would reset base rates to levels existing before September 1, 2009, and require refunds of interim collected amounts with interest.
3Authorized return on equity (ROE) is proposed at 11.9% for base rates and 11.3% for specific rate adjustment clauses.
4Virginia Power will issue customer credits totaling $268 million from prior base rate revenues and $129 million from fuel revenues and financial transmission rights.
5The settlement covers base rates, fuel factor, and authorized ROE for specific generation projects and demand-side management programs.
6A final decision from the Virginia State Corporation Commission is expected in Q4 2009 or early 2010.
7Potential outcomes include approval, denial, or modification of the proposed settlement by the Virginia Commission.

DOMINION ENERGY, INC 8-K Report, Regulation FD Disclosure (Nov 5, 2009)

Summary

Key Highlights

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