Dominion East Ohio Secures Sufficient Winter Fuel Supplies; Rising National Prices Increase Customer Bills.

Business Editors

CLEVELAND--(BUSINESS WIRE)--Sept. 22, 2000

Dominion East Ohio is ready to deliver sufficient winter natural gas supplies, but company officials advise customers to expect significantly higher heating bills, as national market prices have increased sharply from the same period a year ago.

In late October, the company's gas cost recovery (GCR) rate will increase from $6.15 per thousand cubic feet (MCF) to $7.176/MCF, according to a quarterly adjustment filed today with the Public Utilities Commission of Ohio. Based on the new GCR, the average Dominion East Ohio residential customer can expect to pay $70 more per month during the months of November and December of this year, and January 2001, compared with a year ago.

Natural gas costs account for about three-fourths of customers' total bills. Dominion East Ohio has no control over national prices. The company does not earn a profit on the GCR, in which it recovers costs associated with securing natural gas supplies for its customers. The company passes along any gas cost increases, or savings, directly to customers. Actual bills will vary, depending on weather, home energy efficiency, the number of natural gas appliances and household usage patterns.

Company officials attributed the increase in the GCR to sharply rising prices for natural gas on the national market, which have doubled since the beginning of the year. Warmer-than-normal weather the past two winters depressed market prices, prompting many producers to drill fewer new wells. Less exploration and drilling activity eventually reduced the supply of natural gas on the market, while demand remained high, thanks to a strong economy. This supply/demand imbalance resulted in rising prices, which Dominion East Ohio and other distribution companies are passing along to consumers.

"Despite significant national market price increases, our company has continued purchasing and injecting natural gas into our storage fields, as scheduled, to ensure that we'll have sufficient supplies to serve our customers this winter," noted Edgar M. Roach Jr., Dominion East Ohio chief executive officer.

Dominion East Ohio, the largest purchaser of Ohio natural gas, obtains about 10 percent of its total system supply from in-state producers, and also transports gas from out-of-state suppliers via several interstate pipelines, Roach said. Dominion East Ohio's storage facilities are part of the Dominion system, North America's largest natural gas storage network.

In the face of rising natural gas costs, Dominion East Ohio encourages customers to check out the Energy Choice program, which the company is expanding systemwide this fall. Under this program, residential and small commercial customers will be able to buy natural gas commodities from a variety of different suppliers, while relying on Dominion East Ohio to continue delivering that gas to their homes or businesses.

Dominion East Ohio also offers payment plans and energy assistance programs for customers, including the budget payment plan, Percentage of Income Plan (PIP), Home Energy Assistance Program (HEAP) and the Housewarming Program.

To help customers reduce winter energy consumption -- and maximize the value of their heating dollar -- Dominion East Ohio also recommends customers arrange for an annual furnace inspection by a qualified, reputable heating contractor. Customers may call the Dominion East Ohio Comfort Line, 1-800-400-5115, between 7 a.m. and 7 p.m. weekdays, for a listing of "Comfort Contractor Network" members in their area.

Cleveland-based Dominion East Ohio, the largest natural gas distribution company in the Dominion system, serves more than 1.2 million residential, commercial and industrial customers in eastern and western Ohio. Dominion (NYSE:D), headquartered in Richmond, Va., is the nation's largest fully integrated electric and natural gas company, serving a combined 4 million customers.