A large portion of revenues are fee based and from assets operating in prime markets. Subsidiary Virginia Electric&Power Co. (Virginia Power) benefits from a measured deregulation process. Electric competition in Virginia is minimal. The company's exploration and production (E&P) substantial, low cost, long-lived reserves; company cost performance is better than that of industry peers. A large proportion of oil and gas production is hedged forward, providing price stability. A natural hedge exists at the enterprise level; higher commodity prices are negative for Virginia Power (until fuel reset) but are beneficial to the unhedged E&P volumes and unhedged merchant generation assets. Good access to capital and bank markets. Fuel losses from high commodity prices currently being incurred by the
