Dominion Resources Agrees to Sale of Latin American Businesses to Duke Energy International.

RICHMOND, Va.--(BUSINESS WIRE)--Aug. 2, 1999--

Dominion Resources Inc. (NYSE: D) announced today that it has agreed to sell its portfolio of Latin American power generation businesses to Duke Energy International for $405 million.

The businesses being sold total about 1,200 megawatts of gross generation capacity with hydroelectric, natural gas and diesel fuel sources. They are in Argentina, Belize, Bolivia and Peru.

The transaction is expected to be completed by the end of the year following government consents and approvals and financial closings.

Thos. E. Capps, chairman, president and chief executive officer of Dominion Resources, said the company is exiting its Latin American generation businesses to direct future growth in emerging competitive energy markets of the Midwest-Northeast region of the United States.

When Dominion Resources' planned merger with Consolidated Natural Gas Company (NYSE: CNG) is completed, the combined entity will operate in that region as the nation's largest fully-integrated natural gas and electric power company. The combined company will begin operations with 4 million retail customers, the nation's largest gas storage capability, and major gas and power production facilities. In February, the two companies announced plans to merge. The merger is expected to close by year end.

Capps said the newly merged company's competitive capability will be even further enhanced by nearly a decade of competitive experience in Latin American markets.

"In Latin America, we learned up close, first hand and in person how to run profitable generation businesses in competitive power markets that have been operating for many years," Capps said. "We delivered consistent profits to our shareholders and reliable, efficient supply to our customers. We are exiting Latin America with a broader worldview, a better understanding of the true nature of competitive energy markets, and an eagerness to put these lessons to use at home.

"Our Latin American working team is the best in the business. We are pleased that we are able to transfer ownership of their businesses to another excellent energy company. Duke has the reputation, the operating skill, the ongoing commitment to growth in Latin America and the financial strength to sustain growth and superior operating performance at each of our businesses there. From our perspective, we are planning to focus our energies and capital resources in the Midwest-to-Northeast region of the U.S., which consumes 40 percent of the nation's energy and represents a market with strong potential for profit.

"To our employees, to our fellow shareholders, to the forward-looking governments of Argentina, Belize, Bolivia and Peru, and to Duke Energy, we convey our best wishes for continued success."

Capps said proceeds from the sale will be used primarily to buy back Dominion Resources' stock.

While Dominion Resources owns portions of each business being sold, it has acted as the controlling operator at all. The interests being sold are:

Argentina

-- 54 percent of the 98-megwatt, natural gas-fired Alto Valle power station. Co-owners of the business are the station's employees, with a 10 percent interest, and CALF, a local electric utility cooperative, with a 36 percent interest.

-- 98 percent of the 450-megawatt Cerros Colorados hydroelectric station. Co-owners of the business are the facility's employees, with a 2 percent interest.

Belize

-- 95 percent of the 25-megawatt Mollejon hydroelectric facility. The remaining 5 percent of the business is owned by the Social Security Administration of Belize.

Bolivia

-- 50-percent interest in the 126-megawatt Empresa Electrica Corani hydroelectric business. Forty seven percent of the business is held in two private pension accounts for the people of Bolivia, and the balance is held by individual shareholders, including employees.

Peru

-- 30 percent ownership in a power business serving northern Peru principally through hydroelectric power, with some diesel generation capacity. The business will have 520 megawatts of capacity when an expansion program is completed later this year. Co-owners include Gener, a Chilean electric generation company, with a 30 percent interest, Electroperu with a 30 percent interest, and a 10 percent interest held by more than 700 public shareholders.

Dominion Resources, headquartered in Richmond, Va., is an $18 billion holding company active in electric power generation, transmission, and distribution and in natural gas exploration and production. Consolidated Natural Gas, headquartered in Pittsburgh, is one of the nation's largest producers, transporters, distributors and retail marketers of natural gas.

Duke Energy International is a subsidiary of Duke Energy (NYSE: DUK).