Dominion Completes Sale of $700 Million of Notes Representing Replacement Financing for Tendered Dominion Fiber Ventures Notes.

Energy Editors/Business Editors

RICHMOND, Va.--(BUSINESS WIRE)--Feb. 14, 2003

Dominion (NYSE:D):

-- Interest savings of about $42 million pre-tax over next two years will more than offset cost of Dominion Fiber Ventures tender offer

-- Pre-tax cost of removing trigger provisions in Dominion Fiber Ventures notes is approximately $17 million

Dominion (NYSE:D) announced today it has completed the sale of $700 million of senior unsecured notes, consisting of $300 million of 2.80 percent 2-year notes and $400 million of 4.125 percent 5-year notes.

The notes represent replacement financings for Dominion Fiber Ventures (DFV) notes tendered to the company as part of a consent solicitation and tender offer ("the DFV offer") launched on January 23, 2003, with an expected effective date of February 21, 2003.

The newly issued notes have a weighted all-in cost of about 3.72 percent and replace $665 million worth of DFV notes bearing a coupon rate of 7.05 percent, having an all-in cost of 7.55 percent and maturing March 2005. The net proceeds will also be used to cover the cash transaction costs of the DFV offer. The estimated pre-tax interest savings over the next two years will approximate $42 million, more than offsetting the cost of the DFV tender offer from an earnings and cash flow standpoint.

A separate part of the DFV offer was a consent solicitation to remove trigger provisions contained in the DFV notes. The effective date of the removal of the trigger provisions is expected to be February 21, 2003. The estimated cost of removing the trigger provisions is about $17 million pre-tax. This cost is consistent with management's original estimates and investor expectations related to the cost of removing the trigger provisions.

Thomas N. Chewning, chief financial officer of Dominion, said: "We are very pleased that during a time of great capital markets turmoil in our sector we were able to issue these replacement financings at such attractive interest rates."

The 2-year and 5-year notes were priced to yield 2.85 percent and 4.15 percent, respectively. These yields represent spreads of 118 basis points and 120 basis points, respectively, over the yield on U.S. Treasury notes of comparable maturity.

Chewning said: "These spreads were the best we can recall ever realizing on Dominion parent level debt. This will save millions of dollars compared to the interest we would have paid on the DFV notes had they remained outstanding. We are also pleased that the estimated pre-tax cost of removing the trigger provisions of the DFV notes will be around $17 million, which is in-line with our original estimates and is consistent with our previous communications with investors regarding the expected cost of removing the trigger provisions."

Dominion is one of the nation's largest producers of energy, with a diversified and integrated energy portfolio consisting of 24,000 megawatts of generation, 6.1 trillion cubic feet equivalent of natural gas reserves, 7,700 miles of natural gas transmission pipeline and more than 960 billion cubic feet of storage capacity. Dominion also serves 3.9 million franchise natural gas and electric customers in five states. In addition, Dominion owns a managing equity interest in Dominion Fiber Ventures LLC, owner of Dominion Telecom.

This release contains forward-looking statements including our expectations for 2003 earnings and for future annual growth rates that are subject to various risks and uncertainties. Discussion of factors that could cause actual results to differ materially from management's projections, forecasts, estimates and expectations may include factors that are beyond the company's ability to control or estimate precisely, such as estimates of future market conditions, estimates of proved and unproved reserves and the behavior of other market participants. Other factors include, but are not limited to, weather conditions, economic conditions in the company's service area, fluctuations in energy-related commodity prices, changes to rating agency requirements, changing financial accounting standards, trading counterparty credit risks, risks related to energy trading and marketing, risks associated with successfully executing the telecommunications business plan and other uncertainties. Other risk factors are detailed from time to time in the company's Securities & Exchange Commission filings.