POWER May 2016 - 60

GENERATION TRANSITIONS
Dominion Resources Broadens Its
Reach
Dominion Resources, a large electric and gas utility holding company serving
mostly Virginia and North Carolina, has big ambitions to spread its wings
nationally and internationally in gas, while carefully hedging its electricity
business. The company's strategy is eclectic.
Kennedy Maize
"
Eclectic. " Miriam-Webster's Collegiate
Dictionary, 11th Edition, defines the
word as " 1: selecting what appears to be
best in various doctrines, methods, or styles.
2: Composed of elements drawn from various
sources. "
That definition applies well to the business
strategy of Dominion Resources, a large
electric and gas company based in Richmond,
Va., and a player in nuclear, coal, natural gas,
big hydro, and renewables. The company has
long hedged its bets on what the future of
power generation and profitable energy businesses
will be.
" We certainly fit that definition, " Dominion
chairman, president, and CEO Thomas F.
Farrell II told POWER in a March interview
(Figure 1). About the only other U.S. utility
that fits Dominion's model, he said, is California's
Sempra Energy, the parent company
of San Diego Gas & Electric, which also has
substantial U.S. and international natural
gas operations. For Dominion, Farrell said,
the company's current configuration is the
result of " a very deliberate plan we started
executing eight years ago, " including selling
off 60% of its electric merchant plant investments.
Dominion's
latest gambit is its February
bid for Questar Corp., which would see the
Virginia-based firm acquire Salt Lake City's
Questar for $4.4 billion in cash and assumption
of debt. Questar is a gas pipeline, storage,
and local distribution company (LDC)
serving about a million homes in Utah,
Wyoming, and Idaho (see sidebar, " Wave of
Electric-Gas Combinations " ).
The deal reflects Dominion's strategic
decision to reach beyond its traditional markets
in the Mid-Atlantic region, adding " geographic
diversity, " in the company's words, to
its business profile. Dominion, already strong
in natural gas in its traditional territory, says
it is expanding its gas interests as the Obama
administration's Clean Power Plan makes
low-cost gas more attractive. In the press
release announcing the Questar acquisition,
60
■ Dominion Virginia Power, an electric distribution
utility in Virginia
■ Dominion North Carolina Power, an electric
distributor in the Tar Heel State
■ Electric Transmission, an electric transmission
company in Virginia and North
Carolina
■ Dominion East Ohio, a gas LDC in the
Buckeye State
■ Dominion Hope, a West Virginia LDC
■ Dominion Transmission, operating gas
pipelines and gas storage
■ Dominion Cove Point LNG, a liquefied
natural gas (LNG) import facility in Maryland
(currently converting to LNG export)
■ Dominion Gathering-Producer Services,
overseeing gas delivery points into the
Dominion pipeline system
www.powermag.com
POWER | May 2016
Dominion said it " expects the value of the
Questar pipeline system to rise over time as
Utah and other Western states seek to comply
with the requirements of the U.S. Environmental
Protection Agency's (EPA's) Clean
Power Plan and meet state-mandated renewable
standards, with increasing reliance on
low-carbon, gas-fired electric generation. "
Farrell said the Questar buy makes a lot
of sense. Utah, he said, " is one of the fastestgrowing
states, with a fair-minded, balanced
regulatory situation. " He added that Questar's
pipeline assets are integrated into the West's
system, similar to the way Dominion's system
integrates into the Middle Atlantic gas
grid.
The Dominion Resources operating companies,
according to its web site, feature
" 24,300 megawatts of generation, 12,200
miles of natural gas transmission, gathering
and storage pipeline, and 6,500 miles of electric
transmission lines. Dominion operates
one of the nation's largest natural gas storage
systems with 933 billion cubic feet of storage
capacity and serves utility and retail energy
customers in 14 states. " Dominion's eclecticism
is shown in a simple recitation of its existing
businesses, not counting Questar:
■ Dominion Midstream Partners, a masterlimited
partnership that owns, operates,
and develops natural gas infrastructure, including
a major investment in Cove Point
■ Dominion Clearing House, trading in
wholesale gas, electricity, coal, oil, and
emissions contracts
■ Dominion Energy Solutions, a retail marketing
arm for natural gas services in deregulated
markets
■ Dominion Generation, managing the company's
electric generating stations
Generation Diversity
On the generation side of the company, the
diversity and eclecticism are also evident. On
the utility side, Dominion has 5,661 MW of
coal-fired capacity (declining for the past several
years), 5,062 MW of natural gas generation
(which has been growing), 3,568 MW of
1. Dominion Resources chairman,
president, and CEO Tom Farrell.
Courtesy: Dominion Resources
http://www.powermag.com
POWER May 2016

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