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VIRGINIA POWER CUTS COSTS, MAINTAINS STRONG OPERATIONS

 RICHMOND, Va., Feb. 2 /PRNewswire/ -- Continuing a trend begun three years ago, Virginia Power in 1992 took major steps to reduce expenditures and hold down costs while maintaining high standards for service reliability and generating unit performance.
 The company reduced budgeted expenditures for construction and operations by $211 million during the year, with two-thirds of the savings resulting from a $145 million decrease in anticipated capital spending. A major effort to refinance company debt and preferred stock reduced 1992 interest payments by $5.3 million.
 Virginia Power's highly efficient operation of its electric generating units aided the company's cost containment effort. The Surry and North Anna nuclear power stations generated electricity at 80 percent of their maximum capacity. This performance was about 10 percentage points higher than the industry average. The company's fossil-fueled and hydroelectric generating facilities were also among the most reliable and efficient in the nation last year.
 While maintaining superior operating performance, Virginia Power provided its customers with the most reliable service in its history in 1992. The average customer was without power for just 111 minutes during the entire year."
 "With the effects of the recession lingering in 1992, holding costs down became more important than ever, and the steps we took to reduce spending and keep our generating units operating at peak efficiency meant substantial savings for our customers," said James T. Rhodes, president and chief executive officer. "These accomplishments helped us achieve our most important goal, providing reliable power at reasonable cost for our customers."
 The efforts to contain costs and maintain high performance standards were made as the company added customers and saw growing demand for electricity. Despite a general economic downturn through much of its service area in 1992, the company added 39,807 customers, of which more than 70 percent were residential. The company also experienced an all-time peak demand for electricity of 12,942 megawatts on July 14, 1992. The previous demand record was 12,939 megawatts, set in July 1991.
 Virginia Power serves more than 1.8 million customers within a 30,000 square mile area covering much of Virginia and northeastern North Carolina.
 Last year's budget reductions continued a strong trend begun in 1990 toward reduced expenditures. In 1992, operations and maintenance spending was $66 million below the budgeted amount; capital expenditures were $145 million less than the budgeted level. The number of company employees dropped by more than 500 during 1992, primarily through an early retirement package offered to many workers. The company's year-end staffing level of 12,122 was the lowest since 1981.
 Over the past three years, capital, operations and maintenance spending have been reduced by approximately $1 billion from levels anticipated in a five-year company plan adopted in late 1989.
 Virginia Power also reduced costs through one of the largest debt refinancings ever conducted by a utility in the United States. Taking advantage of lower interest rates, the company refinanced more than $1.1 billion of its higher-cost debt. In addition to the $5.3 million saved in 1992, the refinancing is expected to produce savings of about $7.4 million in 1993 and additional savings in coming years.
 Even as costs dropped, generating unit performance remained superior. Virginia Power's four nuclear units, capable of generating about 3,400 megawatts of electricity, achieved a capacity factor of 80 percent in 1992, a performance that was among the best in the nation. Capacity factor, a key measurement of nuclear performance, compares a unit's actual output against the maximum amount of energy it could potentially produce. Nationally, nuclear capacity factors average about 70 percent.
 Virginia Power's 22 major fossil units and 20 hydroelectric units also performed well in 1992, with an equivalent availability of 92 percent, the best record in recent history. Equivalent availability is a standard utility industry performance yardstick. It measures the amount of time the units were available to run at full load during the year.
 Virginia Power's 17 coal units, capable of producing more than 4,300 megawatts, achieved a heat rate of 9,818 British thermal units per kilowatt hour of electricity produced in 1992. Heat rate is an efficiency measure that gauges the amount of heat needed to produce a unit of usable energy. Any rating below 10,000 Btu/kwh is considered superior.
 The company's service reliability also had an outstanding 1992. Service reliability was measured at 99.979 percent, tying the record set in 1991. Customers were without service for an average of just 111 minutes last year; in 1991, the average customer lacked electricity for 112 minutes.
 "We are very pleased with our ability to hold down costs and operate reliably in 1992, and we are determined to continue those trends in 1993 and in future years," Rhodes said. "Our commitment to our customers will not change. We will do everything possible to provide them with efficient, reliable service at fair rates."
 -0- 2/2/93
 /CONTACT: William H. Byrd of Virginia Power, 804-771-6115/


CO: Virginia Power ST: Virginia, North Carolina IN: OIL SU:

KD -- DC007 -- 1876 02/02/93 12:15 EST
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Date:Feb 2, 1993
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