Primary subsidiary Virginia Electric&Power Co., a vertically integrated and fully regulated utility, benefits from low regulatory risk, a better-than-average service territory, and the strategic focus of management; Decisions to de-emphasize unregulated operations have removed considerable business risk from the organization and show a commitment to credit quality; Future spending is concentrated on the lower-risk utility side of the enterprise; and Good access to capital and bank markets. The higher-risk, unregulated generation portfolio remains sizable and harbors considerable market exposure if not hedged effectively and consistently. Other unregulated activities potentially contain additional risk if the company pursues growth, particularly in mid-stream natural gas operations and retail marketing; Risk management around the retail gas and electric business spread over 12
