D 10-Q Quarterly Report March 31, 2016

D 10-Q Quarter ended March 31, 2016

DOMINION ENERGY, INC

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10-Q 1 d194158d10q.htm FORM 10-Q Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Commission File Number	Exact name of registrants as specified in their charters, address of principal executive offices and registrants’ telephone number	I.R.S. Employer Identification Number
001-08489	DOMINION RESOURCES, INC.	54-1229715
000-55337	VIRGINIA ELECTRIC AND POWER COMPANY	54-0418825
001-37591	DOMINION GAS HOLDINGS, LLC	46-3639580

120 Tredegar Street

Richmond, Virginia 23219

(804) 819-2000

State or other jurisdiction of incorporation or organization of the registrants: Virginia

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Dominion Resources, Inc. Yes x No ¨ Virginia Electric and Power Company Yes x No ¨

Dominion Gas Holdings, LLC Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Dominion Resources, Inc. Yes x No ¨ Virginia Electric and Power Company Yes x No ¨

Dominion Gas Holdings, LLC Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Dominion Resources, Inc.

Virginia Electric and Power Company

Dominion Gas Holdings, LLC

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Dominion Resources, Inc. Yes ¨ No x Virginia Electric and Power Company Yes ¨ No x

Dominion Gas Holdings, LLC Yes ¨ No x

At April 15, 2016, the latest practicable date for determination, Dominion Resources, Inc. had 616,218,305 shares of common stock outstanding and Virginia Electric and Power Company had 274,723 shares of common stock outstanding. Dominion Resources, Inc. is the sole holder of Virginia Electric and Power Company’s common stock. Dominion Resources, Inc. holds all of the membership interests of Dominion Gas Holdings, LLC.

This combined Form 10-Q represents separate filings by Dominion Resources, Inc., Virginia Electric and Power Company and Dominion Gas Holdings, LLC. Information contained herein relating to an individual registrant is filed by that registrant on its own behalf. Virginia Electric and Power Company and Dominion Gas Holdings, LLC make no representations as to the information relating to Dominion Resources, Inc.’s other operations.

VIRGINIA ELECTRIC AND POWER COMPANY AND DOMINION GAS HOLDINGS, LLC MEET THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10-Q AND ARE FILING THIS FORM 10-Q UNDER THE REDUCED DISCLOSURE FORMAT.

COMBINED INDEX


		Page Number

	Glossary of Terms		3

	PART I. Financial Information

Item 1.	Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		72
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		83
Item 4.	Controls and Procedures		85

	PART II. Other Information

Item 1.	Legal Proceedings		86
Item 1A.	Risk Factors		86
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		86
Item 6.	Exhibits		87

GLOSSARY OF TERMS

The following abbreviations or acronyms used in this Form 10-Q are defined below:


Abbreviation or Acronym		Definition

2013 Equity Units		Dominion’s 2013 Series A Equity Units and 2013 Series B Equity Units issued in June 2013

2014 Equity Units		Dominion’s 2014 Series A Equity Units issued in July 2014

AFUDC		Allowance for funds used during construction

AMR		Automated meter reading program deployed by East Ohio

AOCI		Accumulated other comprehensive income (loss)

AROs		Asset retirement obligations

ARP		Acid Rain Program, a market-based initiative for emissions allowance trading, established pursuant to Title IV of the CAA

Atlantic Coast Pipeline		Atlantic Coast Pipeline, LLC, a limited liability company owned by Dominion, Duke Energy Corporation, Piedmont Natural Gas Company, Inc. and AGL Resources Inc.

bcf		Billion cubic feet

Bear Garden		A 590 MW combined cycle, natural gas-fired power station in Buckingham County, Virginia

Blue Racer		Blue Racer Midstream, LLC, a joint venture between Dominion and Caiman Energy II, LLC

BREDL		Blue Ridge Environmental Defense League

CAA		Clean Air Act

CAIR		Clean Air Interstate Rule

CAISO		California independent system operator

CCR		Coal combustion residual

CEO		Chief Executive Officer

CERCLA		Comprehensive Environmental Response, Compensation and Liability Act of 1980, also known as Superfund

CFO		Chief Financial Officer

CO ₂		Carbon dioxide

COL		Combined Construction Permit and Operating License

Companies		Dominion, Virginia Power and Dominion Gas, collectively

Cooling degree days		Units measuring the extent to which the average daily temperature is greater than 65 degrees Fahrenheit, calculated as the difference between 65 degrees and the average temperature for that day

Cove Point		Dominion Cove Point LNG, LP

CPCN		Certificate of Public Convenience and Necessity

CSAPR		Cross State Air Pollution Rule

CWA		Clean Water Act

DCG		Dominion Carolina Gas Transmission, LLC (successor by statutory conversion to and formerly known as Carolina Gas Transmission Corporation)

DEI		Dominion Energy, Inc.

Dominion		The legal entity, Dominion Resources, Inc., one or more of its consolidated subsidiaries (other than Virginia Power and Dominion Gas) or operating segments or the entirety of Dominion Resources, Inc. and its consolidated subsidiaries

Dominion Gas		The legal entity, Dominion Gas Holdings, LLC, one or more of its consolidated subsidiaries or operating segment, or the entirety of Dominion Gas Holdings, LLC and its consolidated subsidiaries

Dominion Iroquois		Dominion Iroquois, Inc., which, as of May 2016, holds a 24.07% noncontrolling partnership interest in Iroquois

Dominion Midstream		The legal entity, Dominion Midstream Partners, LP, one or more of its consolidated subsidiaries, Cove Point Holdings, Iroquois GP Holding Company, LLC and DCG (beginning April 1, 2015), or the entirety of Dominion Midstream Partners, LP, and its consolidated subsidiaries

DRS		Dominion Resources Services, Inc.

Dth		Dekatherm

DTI		Dominion Transmission, Inc.

DVP		Dominion Virginia Power operating segment

East Ohio		The East Ohio Gas Company, doing business as Dominion East Ohio

EPA		Environmental Protection Agency

EPS		Earnings per share

FERC		Federal Energy Regulatory Commission


Abbreviation or Acronym		Definition

Four Brothers		Four Brothers Solar, LLC, a limited liability company owned by Dominion and Four Brothers Holdings, LLC, a wholly-owned subsidiary of SunEdison

Fowler Ridge		A wind-turbine facility joint venture between Dominion and BP Wind Energy North America Inc. in Benton County, Indiana

FTRs		Financial transmission rights

GAAP		U.S. generally accepted accounting principles

Gal		Gallon

GHG		Greenhouse gas

Granite Mountain		Granite Mountain Holdings, LLC, a limited liability company owned by Dominion and Granite Mountain Renewables, LLC, a wholly-owned subsidiary of SunEdison

Greensville County		An approximately 1,588 MW proposed natural gas-fired combined-cycle power station in Greensville County, Virginia

Heating degree days		Units measuring the extent to which the average daily temperature is less than 65 degrees Fahrenheit, calculated as the difference between 65 degrees and the average temperature for that day

Hope		Hope Gas, Inc., doing business as Dominion Hope

Iron Springs		Iron Springs Holdings, LLC, a limited liability company owned by Dominion and Iron Springs Renewables, LLC, a wholly-owned subsidiary of SunEdison

Iroquois		Iroquois Gas Transmission System L.P.

ISO-NE		Independent system operator New England

June 2006 hybrids		2006 Series A Enhanced Junior Subordinated Notes due 2066

kV		Kilovolt

Liquefaction Project		A natural gas export/liquefaction facility currently under construction by Cove Point

LNG		Liquefied natural gas

MATS		Utility Mercury and Air Toxics Standard Rule

MD&A		Management’s Discussion and Analysis of Financial Condition and Results of Operations

MGD		Million gallons a day

Microsoft		The legal entity, Microsoft Corporation, one or more of its consolidated subsidiaries, or operating segments, or the entirety of Microsoft Corporation and its consolidated subsidiaries

MISO		Midcontinent Independent Transmission System Operator, Inc.

MW		Megawatt

MWh		Megawatt hour

NedPower		A wind-turbine facility joint venture between Dominion and Shell Wind Energy, Inc. in Grant County, West Virginia

NGLs		Natural gas liquids

North Carolina Commission		North Carolina Utilities Commission

NO _x		Nitrogen oxide

NRC		Nuclear Regulatory Commission

NSPS		New Source Performance Standards

Ohio Commission		Public Utilities Commission of Ohio

Order 1000		Order issued by FERC adopting new requirements for electric transmission planning, cost allocation and development

PIPP		Percentage of Income Payment Plan deployed by East Ohio

PIR		Pipeline Infrastructure Replacement program deployed by East Ohio

PJM		PJM Interconnection, L.L.C.

Possum Point		Possum Point power station

ppb		Parts-per-billion

PSD		Prevention of Significant Deterioration

Questar		The legal entity, Questar Corporation, one or more of its consolidated subsidiaries, or operating segments, or the entirety of Questar Corporation and its consolidated subsidiaries

Questar Combination		Agreement and plan of merger entered on January 31, 2016 between Dominion and Questar in which Questar will become a wholly-owned subsidiary of Dominion upon closing

Regulation Act		Legislation effective July 1, 2007, that amended the Virginia Electric Utility Restructuring Act and fuel factor statute, which legislation is also known as the Virginia Electric Utility Regulation Act, as amended in 2015

REIT		Real estate investment trust


Abbreviation or Acronym		Definition

Rider B		A rate adjustment clause associated with the recovery of costs related to the conversion of three of Virginia Power’s coal-fired power stations to biomass

Rider GV		A rate adjustment clause associated with the recovery of costs related to Greensville County

Rider R		A rate adjustment clause associated with the recovery of costs related to Bear Garden

Rider S		A rate adjustment clause associated with the recovery of costs related to the Virginia City Hybrid Energy Center

Rider T1		A rate adjustment clause to recover the difference between revenues produced from the transmission rates included in base rates, and the new total revenue requirement developed annually for the rate years effective September 1

Rider US-1		A rate adjustment clause associated with the recovery of costs related to Remington solar facility

Rider W		A rate adjustment clause associated with the recovery of costs related to Warren County

Riders C1A and C2A		Rate adjustment clauses associated with the recovery of costs related to certain demand-side management programs approved in demand-side management cases

ROE		Return on equity

RSN		Remarketable subordinated note

SEC		Securities and Exchange Commission

September 2006 hybrids		2006 Series B Enhanced Junior Subordinated Notes due 2066

SO ₂		Sulfur dioxide

Standard & Poor’s		Standard & Poor’s Ratings Services, a division of McGraw Hill Financial, Inc.

SunEdison		The legal entity, SunEdison, Inc., one or more of its consolidated subsidiaries (including Four Brothers Holdings, LLC, Granite Mountain Renewables, LLC and Iron Springs Renewables, LLC) or operating segments, or the entirety of SunEdison, Inc. and its consolidated subsidiaries

Terra Nova Renewable Partners		A partnership between SunEdison and institutional investors advised by J.P. Morgan Asset Management-Global Real Assets

Three Cedars		Granite Mountain and Iron Springs, collectively

TransCanada		The legal entity, TransCanada Corporation, one or more of its consolidated subsidiaries, or operating segments, or the entirety of TransCanada Corporation and its consolidated subsidiaries

UAO		Unilateral Administrative Order

VDEQ		Virginia Department of Environmental Quality

VEBA		Voluntary Employees’ Beneficiary Association

VIE		Variable interest entity

Virginia City Hybrid Energy Center		A 610 MW baseload carbon-capture compatible, clean coal powered electric generation facility in Wise County, Virginia

Virginia Commission		Virginia State Corporation Commission

Virginia Power		The legal entity, Virginia Electric and Power Company, one or more of its consolidated subsidiaries or operating segments or the entirety of Virginia Power and its consolidated subsidiaries

VOC		Volatile organic compounds

Warren County		A 1,342 MW combined-cycle, natural gas-fired power station in Warren County, Virginia

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DOMINION RESOURCES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended March 31,
	2016		2015
(millions, except per share amounts)
Operating Revenue	$	2,921	$	3,409

Operating Expenses
Electric fuel and other energy-related purchases		634		953
Purchased electric capacity		68		94
Purchased gas		119		250
Other operations and maintenance		703		602
Depreciation, depletion and amortization		351		343
Other taxes		164		165

Total operating expenses		2,039		2,407

Income from operations		882		1,002

Other income		54		60
Interest and related charges		226		223

Income from operations including noncontrolling interests before income tax expense		710		839
Income tax expense		179		299

Net Income Including Noncontrolling Interests		531		540
Noncontrolling Interests		7		4

Net Income Attributable to Dominion	$	524	$	536

Earnings Per Common Share - Basic and Diluted
Net income attributable to Dominion	$	0.88	$	0.91
Dividends Declared Per Common Share	$	0.7000	$	0.6475

The accompanying notes are an integral part of Dominion’s Consolidated Financial Statements.

DOMINION RESOURCES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
	2016			2015
(millions)
Net income including noncontrolling interests	$	531		$	540
Other comprehensive income (loss), net of taxes:
Net deferred gains (losses) on derivatives-hedging activities ⁽¹⁾		53			(58	)
Changes in unrealized net gains (losses) on investment securities ⁽²⁾		15			15
Amounts reclassified to net income:
Net derivative (gains) losses-hedging activities ⁽³⁾		(63	)		59
Net realized gains on investment securities ⁽⁴⁾		(2	)		(21	)
Net pension and other postretirement benefit costs ⁽⁵⁾		8			13
Changes in other comprehensive income (loss) from equity method investees		—			(1	)

Total other comprehensive income		11			7

Comprehensive income including noncontrolling interests		542			547
Comprehensive income attributable to noncontrolling interests		7			4

Comprehensive income attributable to Dominion	$	535		$	543

(1)	Net of $(33) million and $41 million tax for the three months ended March 31, 2016 and 2015, respectively.

(2)	Net of $(10) million and $(11) million tax for the three months ended March 31, 2016 and 2015, respectively.

(3)	Net of $39 million and $(39) million tax for the three months ended March 31, 2016 and 2015, respectively.

(4)	Net of $1 million and $12 million tax for the three months ended March 31, 2016 and 2015, respectively.

(5)	Net of $(6) million and $(9) million tax for the three months ended March 31, 2016 and 2015, respectively.

The accompanying notes are an integral part of Dominion’s Consolidated Financial Statements.

DOMINION RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31, 2016			December 31, 2015 ⁽¹⁾
(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	218		$	607
Customer receivables (less allowance for doubtful accounts of $23 and $32)		1,175			1,200
Other receivables (less allowance for doubtful accounts of $2 at both dates)		153			169
Inventories		1,304			1,348
Prepayments		157			198
Other		704			667

Total current assets		3,711			4,189

Investments
Nuclear decommissioning trust funds		4,239			4,183
Investment in equity method affiliates		1,346			1,320
Other		268			271

Total investments		5,853			5,774

Property, Plant and Equipment
Property, plant and equipment		59,154			57,776
Accumulated depreciation, depletion and amortization		(16,531	)		(16,222	)

Total property, plant and equipment, net		42,623			41,554

Deferred Charges and Other Assets
Goodwill		3,294			3,294
Pension and other postretirement benefit assets		978			943
Regulatory assets		1,977			1,865
Other		1,069			1,029

Total deferred charges and other assets		7,318			7,131

Total assets	$	59,505		$	58,648

(1)	Dominion’s Consolidated Balance Sheet at December 31, 2015 has been derived from the audited Consolidated Financial Statements at that date.

The accompanying notes are an integral part of Dominion’s Consolidated Financial Statements.

DOMINION RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS—(Continued)

(Unaudited)


	March 31, 2016			December 31, 2015 ⁽¹⁾
(millions)
LIABILITIES AND EQUITY
Current Liabilities
Securities due within one year	$	1,774		$	1,825
Short-term debt		3,028			3,509
Accounts payable		670			726
Accrued interest, payroll and taxes		583			515
Other ⁽²⁾		1,463			1,544

Total current liabilities		7,518			8,119

Long-Term Debt
Long-term debt		20,807			20,048
Junior subordinated notes		1,849			1,340
Remarketable subordinated notes		1,530			2,080

Total long-term debt		24,186			23,468

Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits		7,536			7,414
Asset retirement obligations		1,916			1,887
Regulatory liabilities		2,354			2,285
Other		1,980			1,873

Total deferred credits and other liabilities		13,786			13,459

Total liabilities		45,490			45,046

Commitments and Contingencies (see Note 15)
Equity
Common stock – no par ⁽³⁾		6,778			6,680
Retained earnings		6,565			6,458
Accumulated other comprehensive loss		(463	)		(474	)

Total common shareholders’ equity		12,880			12,664

Noncontrolling interests		1,135			938

Total equity		14,015			13,602

Total liabilities and equity	$	59,505		$	58,648

(1)	Dominion’s Consolidated Balance Sheet at December 31, 2015 has been derived from the audited Consolidated Financial Statements at that date.

(2)	See Note 3 for amounts attributable to related parties.

(3)	1 billion shares authorized; 597 million shares and 596 million shares outstanding at March 31, 2016 and December 31, 2015, respectively.

The accompanying notes are an integral part of Dominion’s Consolidated Financial Statements.

DOMINION RESOURCES, INC.

CONSOLIDATED STATEMENT OF EQUITY

(Unaudited)


	Common Stock					Dominion Shareholders
	Shares		Amount			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Common Shareholders’ Equity			Noncontrolling Interests			Total Equity
(millions)
December 31, 2015		596	$	6,680		$	6,458		$	(474	)	$	12,664		$	938		$	13,602

Net income including noncontrolling interests							524						524			7			531
Contributions from SunEdison to Four Brothers and Three Cedars													—			94			94
Sale of interest in merchant solar projects				22									22			117			139
Purchase of Dominion Midstream common units				(2	)								(2	)		(8	)		(10	)
Issuance of common stock		1		75									75						75
Dividends and distributions							(417	)					(417	)		(10	)		(427	)
Other comprehensive income, net of tax										11			11						11
Other				3									3			(3	)		—

March 31, 2016		597	$	6,778		$	6,565		$	(463	)	$	12,880		$	1,135		$	14,015

The accompanying notes are an integral part of Dominion’s Consolidated Financial Statements.

DOMINION RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


Three Months Ended March 31	2016			2015
(millions)
Operating Activities
Net income including noncontrolling interests	$	531		$	540
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operating activities:
Depreciation, depletion and amortization (including nuclear fuel)		424			414
Deferred income taxes and investment tax credits		131			277
Gains on the sale of assets and businesses		(5	)		(70	)
Other adjustments		(21	)		(40	)
Changes in:
Accounts receivable		40			(65	)
Inventories		44			148
Deferred fuel and purchased gas costs, net		35			(33	)
Accounts payable		(37	)		(85	)
Accrued interest, payroll and taxes		68			(15	)
Margin deposit assets and liabilities		(21	)		111
Other operating assets and liabilities		3			(51	)

Net cash provided by operating activities		1,192			1,131

Investing Activities
Plant construction and other property additions (including nuclear fuel)		(1,497	)		(1,014	)
Acquisition of DCG		—			(495	)
Proceeds from sales of securities		368			337
Purchases of securities		(393	)		(304	)
Other		(3	)		(23	)

Net cash used in investing activities		(1,525	)		(1,499	)

Financing Activities
Issuance (repayment) of short-term debt, net		(481	)		425
Repurchase of short-term notes		(100	)		—
Issuance of long-term debt		1,250			—
Repayment and repurchase of long-term debt		(496	)		(3	)
Proceeds from sale of interest in merchant solar projects		117			—
Contributions from SunEdison to Four Brothers and Three Cedars		94			—
Issuance of common stock		75			295
Common dividend payments		(417	)		(381	)
Other		(98	)		(11	)

Net cash provided by (used in) financing activities		(56	)		325

Decrease in cash and cash equivalents		(389	)		(43	)
Cash and cash equivalents at beginning of period		607			318

Cash and cash equivalents at end of period	$	218		$	275

Supplemental Cash Flow Information
Significant noncash investing activities:
Accrued capital expenditures	$	472		$	353

The accompanying notes are an integral part of Dominion’s Consolidated Financial Statements.

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended March 31,
	2016		2015
(millions)
Operating Revenue ⁽¹⁾	$	1,890	$	2,137

Operating Expenses
Electric fuel and other energy-related purchases ⁽¹⁾		536		810
Purchased electric capacity		68		94
Other operations and maintenance:
Affiliated suppliers		101		75
Other		349		321
Depreciation and amortization		248		238
Other taxes		74		74

Total operating expenses		1,376		1,612

Income from operations		514		525

Other income		16		15
Interest and related charges		114		108

Income before income tax expense		416		432
Income tax expense		153		163

Net Income	$	263	$	269

(1)	See Note 17 for amounts attributable to affiliates.

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
	2016			2015
(millions)
Net income	$	263		$	269
Other comprehensive income (loss), net of taxes:
Net deferred losses on derivatives-hedging activities ⁽¹⁾		(9	)		(4	)
Changes in unrealized net gains on nuclear decommissioning trust funds ⁽²⁾		3			1
Amounts reclassified to net income:
Net derivative losses-hedging activities ⁽³⁾		—			1
Net realized gains on nuclear decommissioning trust funds ⁽⁴⁾		—			(1	)

Total other comprehensive loss		(6	)		(3	)

Comprehensive income	$	257		$	266

(1)	Net of $5 million and $2 million million tax for the three months ended March 31, 2016 and 2015, respectively.

(2)	Net of $(1) million tax for both the three months ended March 31, 2016 and 2015.

(3)	Net of $— million tax for both the three months ended March 31, 2016 and 2015.

(4)	Net of $— million tax for both the three months ended March 31, 2016 and 2015.

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31, 2016			December 31, 2015 ⁽¹⁾
(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	78		$	18
Customer receivables (less allowance for doubtful accounts of $18 and $27)		798			822
Other receivables (less allowance for doubtful accounts of $1 at both dates)		95			109
Affiliated receivables		3			296
Inventories (average cost method)		833			873
Regulatory assets		343			326
Other ⁽²⁾		57			60

Total current assets		2,207			2,504

Investments
Nuclear decommissioning trust funds		1,980			1,945
Other		3			3

Total investments		1,983			1,948

Property, Plant and Equipment
Property, plant and equipment		38,177			37,639
Accumulated depreciation and amortization		(11,903	)		(11,708	)

Total property, plant and equipment, net		26,274			25,931

Deferred Charges and Other Assets
Regulatory assets		775			667
Other ⁽²⁾		543			515

Total deferred charges and other assets		1,318			1,182

Total assets	$	31,782		$	31,565

(1)	Virginia Power’s Consolidated Balance Sheet at December 31, 2015 has been derived from the audited Consolidated Financial Statements at that date.

(2)	See Note 17 for amounts attributable to affiliates.

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED BALANCE SHEETS—(Continued)

(Unaudited)


	March 31, 2016		December 31, 2015 ⁽¹⁾
(millions)
LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities
Securities due within one year	$	25	$	476
Short-term debt		1,276		1,656
Accounts payable		338		366
Payables to affiliates		102		73
Affiliated current borrowings		—		376
Accrued interest, payroll and taxes		277		190
Other ⁽²⁾		592		593

Total current liabilities		2,610		3,730

Long-Term Debt		9,638		8,892

Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits		4,755		4,654
Asset retirement obligations		1,134		1,104
Regulatory liabilities		1,996		1,929
Other ⁽²⁾		751		615

Total deferred credits and other liabilities		8,636		8,302

Total liabilities		20,884		20,924

Commitments and Contingencies (see Note 15)
Common Shareholder’s Equity
Common stock – no par ⁽³⁾		5,738		5,738
Other paid-in capital		1,113		1,113
Retained earnings		4,013		3,750
Accumulated other comprehensive income		34		40

Total common shareholder’s equity		10,898		10,641

Total liabilities and shareholder’s equity	$	31,782	$	31,565

(1)	Virginia Power’s Consolidated Balance Sheet at December 31, 2015 has been derived from the audited Consolidated Financial Statements at that date.

(2)	See Note 17 for amounts attributable to affiliates.

(3)	500,000 shares authorized; 274,723 shares outstanding at March 31, 2016 and December 31, 2015.

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


Three Months Ended March 31,	2016			2015
(millions)
Operating Activities
Net income	$	263		$	269
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization (including nuclear fuel)		294			281
Deferred income taxes and investment tax credits		99			67
Other adjustments		(8	)		(7	)
Changes in:
Accounts receivable		38			(20	)
Affiliated receivables and payables		322			(20	)
Inventories		40			85
Prepayments		8			214
Deferred fuel expenses, net		27			(54	)
Accounts payable		(3	)		3
Accrued interest, payroll and taxes		87			116
Other operating assets and liabilities		4			27

Net cash provided by operating activities		1,171			961

Investing Activities
Plant construction and other property additions		(604	)		(583	)
Purchases of nuclear fuel		(22	)		(23	)
Proceeds from sales of securities		193			133
Purchases of securities		(201	)		(138	)
Other		(13	)		(11	)

Net cash used in investing activities		(647	)		(622	)

Financing Activities
Issuance (repayment) of short-term debt, net		(380	)		227
Repayment of affiliated current borrowings, net		(376	)		(417	)
Issuance of long-term debt		750			—
Repayment of long-term debt		(452	)		—
Common dividend payments to parent		—			(149	)
Other		(6	)		1

Net cash used in financing activities		(464	)		(338	)

Increase in cash and cash equivalents		60			1
Cash and cash equivalents at beginning of period		18			15

Cash and cash equivalents at end of period	$	78		$	16

Supplemental Cash Flow Information
Significant noncash investing activities:
Accrued capital expenditures	$	164		$	139

The accompanying notes are an integral part of Virginia Power’s Consolidated Financial Statements.

DOMINION GAS HOLDINGS, LLC

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended March 31,
	2016		2015
(millions)
Operating Revenue ⁽¹⁾	$	431	$	531

Operating Expenses
Purchased gas ⁽¹⁾		34		74
Other energy-related purchases		3		6
Other operations and maintenance:
Affiliated suppliers		27		21
Other		97		53
Depreciation and amortization		43		51
Other taxes		52		55

Total operating expenses		256		260

Income from operations		175		271

Other income		6		9
Interest and related charges		22		17

Income from operations before income taxes		159		263
Income tax expense		61		102

Net Income	$	98	$	161

(1)	See Note 17 for amounts attributable to related parties.

The accompanying notes are an integral part of Dominion Gas’ Consolidated Financial Statements.

DOMINION GAS HOLDINGS, LLC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
	2016			2015
(millions)
Net income	$	98		$	161
Other comprehensive income (loss), net of taxes:
Net deferred losses on derivatives-hedging activities ⁽¹⁾		(6	)		(4	)
Amounts reclassified to net income:
Net derivative gains-hedging activities ⁽²⁾		(2	)		—
Net pension and other postretirement benefit costs ⁽³⁾		—			1

Total other comprehensive loss		(8	)		(3	)

Comprehensive income	$	90		$	158

(1)	Net of $4 million and $2 million tax for the three months ended March 31, 2016 and 2015, respectively.

(2)	Net of $2 million and $— million tax for the three months ended March 31, 2016 and 2015, respectively.

(3)	Net of $(1) million tax for both the three months ended March 31, 2016 and 2015.

The accompanying notes are an integral part of Dominion Gas’ Consolidated Financial Statements.

DOMINION GAS HOLDINGS, LLC

CONSOLIDATED BALANCE SHEETS

(Unaudited)


	March 31, 2016			December 31, 2015 ⁽¹⁾
(millions)
ASSETS
Current Assets
Cash and cash equivalents	$	44		$	13
Customer receivables (less allowance for doubtful accounts of $1 at both dates) ⁽²⁾		227			219
Other receivables (less allowance for doubtful accounts of $2 at both dates) ⁽²⁾		17			7
Affiliated receivables		9			98
Inventories		91			78
Prepayments		72			88
Other ⁽²⁾		46			63

Total current assets		506			566

Investments		104			104

Property, Plant and Equipment
Property, plant and equipment		9,809			9,693
Accumulated depreciation and amortization		(2,726	)		(2,690	)

Total property, plant and equipment, net		7,083			7,003

Deferred Charges and Other Assets
Goodwill		542			542
Pension and other postretirement benefit assets ⁽²⁾		1,544			1,510
Other ⁽²⁾		611			583

Total deferred charges and other assets		2,697			2,635

Total assets	$	10,390		$	10,308

(1)	Dominion Gas’ Consolidated Balance Sheet at December 31, 2015 has been derived from the audited Consolidated Financial Statements at that date.

(2)	See Note 17 for amounts attributable to related parties.

The accompanying notes are an integral part of Dominion Gas’ Consolidated Financial Statements.

DOMINION GAS HOLDINGS, LLC

CONSOLIDATED BALANCE SHEETS—(Continued)

(Unaudited)


	March 31, 2016			December 31, 2015 ⁽¹⁾
(millions)
LIABILITIES AND EQUITY
Current Liabilities
Securities due within one year	$	400		$	400
Short-term debt		403			391
Accounts payable		167			201
Payables to affiliates		32			22
Affiliated current borrowings		40			95
Accrued interest, payroll and taxes		184			183
Other ⁽²⁾		182			183

Total current liabilities		1,408			1,475

Long-Term Debt		2,871			2,869

Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits		2,267			2,214
Other ⁽²⁾		436			432

Total deferred credits and other liabilities		2,703			2,646

Total liabilities		6,982			6,990

Commitments and Contingencies (see Note 15)
Equity
Membership interests		3,515			3,417
Accumulated other comprehensive loss ⁽²⁾		(107	)		(99	)

Total equity		3,408			3,318

Total liabilities and equity	$	10,390		$	10,308

(1)	Dominion Gas’ Consolidated Balance Sheet at December 31, 2015 has been derived from the audited Consolidated Financial Statements at that date.

(2)	See Note 17 for amounts attributable to related parties.

The accompanying notes are an integral part of Dominion Gas’ Consolidated Financial Statements.

DOMINION GAS HOLDINGS, LLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


Three Months Ended March 31,	2016			2015
(millions)
Operating Activities
Net income	$	98		$	161
Adjustments to reconcile net income to net cash provided by operating activities:
Gains on sales of assets		(5	)		(70	)
Depreciation and amortization		43			51
Deferred income taxes and investment tax credits		58			36
Other adjustments		—			3
Changes in:
Accounts receivable		(18	)		(24	)
Affiliated receivables and payables		99			6
Deferred purchased gas costs, net		11			16
Prepayments		16			102
Accounts payable		(25	)		(33	)
Accrued interest, payroll and taxes		1			49
Other operating assets and liabilities		(45	)		(24	)

Net cash provided by operating activities		233			273

Investing Activities
Plant construction and other property additions		(161	)		(128	)
Proceeds from assignments of shale development rights		5			27
Other		(2	)		(1	)

Net cash used in investing activities		(158	)		(102	)

Financing Activities
Issuance of short-term debt, net		12			280
Repayment of affiliated current borrowings, net		(55	)		(345	)
Distribution payments to parent		—			(95	)
Other		(1	)		(1	)

Net cash used in financing activities		(44	)		(161	)

Increase in cash and cash equivalents		31			10
Cash and cash equivalents at beginning of period		13			9

Cash and cash equivalents at end of period	$	44		$	19

Supplemental Cash Flow Information
Significant noncash investing and financing activities:
Accrued capital expenditures	$	36		$	22

The accompanying notes are an integral part of Dominion Gas’ Consolidated Financial Statements.

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Nature of Operations

Dominion, headquartered in Richmond, Virginia, is one of the nation’s largest producers and transporters of energy. Dominion’s operations are conducted through various subsidiaries, including Virginia Power and Dominion Gas. Virginia Power is a regulated public utility that generates, transmits and distributes electricity for sale in Virginia and northeastern North Carolina. Dominion Gas is a holding company that conducts business activities through a regulated interstate natural gas transmission pipeline and underground storage system in the Northeast, mid-Atlantic and Midwest states, regulated gas transportation and distribution operations in Ohio, and gas gathering and processing activities primarily in West Virginia, Ohio and Pennsylvania. Dominion Gas’ principal wholly-owned subsidiaries are DTI, East Ohio and Dominion Iroquois.

Note 2. Significant Accounting Policies

As permitted by the rules and regulations of the SEC, the Companies’ accompanying unaudited Consolidated Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP. These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015.

In the Companies’ opinion, the accompanying unaudited Consolidated Financial Statements contain all adjustments necessary to present fairly their financial position as of March 31, 2016, their results of operations and cash flows for the three months ended March 31, 2016 and 2015 and Dominion’s statement of equity for the three months ended March 31, 2016. Such adjustments are normal and recurring in nature unless otherwise noted.

The Companies make certain estimates and assumptions in preparing their Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates.

The Companies’ accompanying unaudited Consolidated Financial Statements include, after eliminating intercompany transactions and balances, their accounts, those of their respective majority-owned subsidiaries and non-wholly-owned entities in which they have a controlling financial interest. For certain partnership structures, income is allocated based on the liquidation value of the underlying contractual arrangements. As of March 31, 2016, Dominion owns the general partner and 64.6% of the limited partner interests in Dominion Midstream. The public’s ownership interest in Dominion Midstream is reflected as noncontrolling interest in Dominion’s Consolidated Financial Statements. Also, as of March 31, 2016, Dominion owns 50% of the units in and consolidates Four Brothers and Three Cedars. SunEdison’s ownership interest in Four Brothers and Three Cedars, as well as Terra Nova Renewable Partners’ 33% interest in certain of Dominion’s merchant solar projects, is reflected as noncontrolling interest in Dominion’s Consolidated Financial Statements. See Note 3 for further information on transactions with SunEdison.

The results of operations for interim periods are not necessarily indicative of the results expected for the full year. Information for quarterly periods is affected by seasonal variations in sales, rate changes, electric fuel and other energy-related purchases, purchased gas expenses and other factors.

Certain amounts in the Companies’ 2015 Consolidated Financial Statements and Notes have been reclassified to conform to the 2016 presentation for comparative purposes. The reclassifications did not affect the Companies’ net income, total assets, liabilities, equity or cash flows, except for the reclassification of debt issuance costs as discussed in Note 2 to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015.

Amounts disclosed for Dominion are inclusive of Virginia Power and/or Dominion Gas, where applicable.

Note 3. Acquisitions and Dispositions

Dominion

Proposed Acquisition of Questar

Pursuant to the terms of the Questar Combination announced in February 2016, upon closing, each share of Questar common stock issued and outstanding immediately prior to the closing will be converted automatically into the right to receive $25 in cash per share, or approximately $4.4 billion in total. In addition, Questar’s debt, which currently totals approximately $1.5 billion is expected to remain outstanding. Dominion entered into agreements with several of its lending banks pursuant to which they have unfunded financing commitments to provide a $3.9 billion acquisition facility. In connection with receipt of proceeds from Dominion’s issuance of common stock, the acquisition facility was reduced from $3.9 billion to $3.14 billion in

April 2016. See Note 14 for more information. Dominion intends to permanently finance the transaction in a manner that supports its existing credit ratings targets by issuing a combination of common stock, mandatory convertibles and debt at Dominion, and indirectly through the issuance of securities at Dominion Midstream, the proceeds of which will be applied to pay Dominion for certain assets of Questar, which are, subject to relevant approvals, expected to be contributed to Dominion Midstream.

The transaction requires approval of Questar’s shareholders and clearance from the Federal Trade Commission under the Hart-Scott-Rodino Act. In February 2016, the Federal Trade Commission granted antitrust approval of the Questar Combination under the Hart-Scott-Rodino Act. In March 2016, Questar and Dominion filed for review and approval, as required, from the Utah Public Service Commission and the Wyoming Public Service Commission, and provided information regarding the transaction to the Idaho Public Utilities Commission. The Questar Combination contains certain termination rights for both Dominion and Questar, and provides that, upon termination of the Questar Combination under specified circumstances, Dominion would be required to pay a termination fee of $154 million to Questar and Questar would be required to pay Dominion a termination fee of $99 million. Subject to receipt of Questar shareholder and any required regulatory approvals and meeting closing conditions, Dominion targets closing by the end of 2016.

Sale of Interest in Merchant Solar Projects

In September 2015, Dominion signed an agreement to sell a noncontrolling interest (consisting of 33% of the equity interests) in all of its then currently wholly-owned merchant solar projects, 24 solar projects totaling approximately 425 MW, to SunEdison. In December 2015, the sale of interest in 15 of the solar projects closed for $184 million with the sale of interest in the remaining projects completed in January 2016 for $117 million. Upon closing, SunEdison sold its interest in these projects to Terra Nova Renewable Partners. Terra Nova Renewable Partners has a future option to buy all or a portion of Dominion’s remaining 67% ownership in the projects upon the occurrence of certain events, none of which had occurred as of March 31, 2016 nor are expected to occur in the remainder of 2016.

Non-Wholly-Owned Merchant Solar Projects

Acquisitions of Four Brothers and Three Cedars

In June 2015, Dominion acquired 50% of the units in Four Brothers from SunEdison for $64 million of consideration, consisting of $2 million in cash and a $62 million payable. As of March 31, 2016, a $20 million payable is included in other current liabilities in Dominion’s Consolidated Balance Sheets. Four Brothers’ purpose is to develop and operate four solar projects located in Utah, which will produce and sell electricity and renewable energy credits. The projects are expected to cost approximately $730 million to construct, including the initial acquisition cost. Dominion is obligated to contribute $445 million of capital to fund the construction of the projects and has contributed $301 million through March 31, 2016. The facilities are expected to begin commercial operations by the end of the third quarter of 2016, with generating capacity of approximately 320 MW.

In September 2015, Dominion acquired 50% of the units in Three Cedars from SunEdison for $43 million of consideration, consisting of $6 million in cash and a $37 million payable. As of March 31, 2016, an $18 million payable is included in other current liabilities in Dominion’s Consolidated Balance Sheets. Three Cedars’ purpose is to develop and operate three solar projects located in Utah, which will produce and sell electricity and renewable energy credits. The projects are expected to cost approximately $425 million to construct. Dominion is obligated to contribute $276 million of capital to fund the construction of the projects and has contributed $144 million through March 31, 2016. The facilities are expected to begin commercial operations by the end of the third quarter of 2016, with generating capacity of approximately 210 MW.

Long-term power purchase, interconnection and operation and maintenance agreements have been executed for both Four Brothers and Three Cedars. Dominion expects to claim 99% of the federal investment tax credits on the projects.

Dominion owns 50% of the voting interests in Four Brothers and Three Cedars and has a controlling financial interest over the entities through its rights to control operations. The allocation of the $64 million purchase price for Four Brothers resulted in $89 million of property, plant and equipment and $25 million of noncontrolling interest. The allocation of the $43 million purchase price for Three Cedars resulted in $65 million of property, plant and equipment and $22 million of noncontrolling interest. The noncontrolling interest for each entity was measured at fair value using the discounted cash flow method, with the primary components of the valuation being future cash flows (both incoming and outgoing) and the discount rate. Dominion determined its discount rate based on the cost of capital a utility-scale investor would expect, as well as the cost of capital an individual project developer could achieve via a combination of non-recourse project financing and outside equity partners. The acquired assets of Four Brothers and Three Cedars are included in the Dominion Generation operating segment.

Four Brothers and Three Cedars entered into agreements with SunEdison to provide administrative and support services in connection with the construction of the projects, operation and maintenance of the facilities, and administrative and technical

management services of the solar facilities. Dominion has assumed certain of these agreements from SunEdison and will provide a majority of the administrative and support services as early as May 2016. In addition, Dominion has entered into contracts with SunEdison to provide services related to construction project management and oversight. Costs related to services to be provided under these agreements were immaterial for the three months ended March 31, 2016. Subsequent to Dominion’s acquisition of Four Brothers and Three Cedars through March 31, 2016, SunEdison made contributions to Four Brothers and Three Cedars of $197 million in aggregate, which are reflected as noncontrolling interests in Dominion’s Consolidated Balance Sheets.

In April 2016, SunEdison filed for Chapter 11 bankruptcy; however, this is not expected to have a material adverse effect on Dominion, Four Brothers or Three Cedars.

Acquisition of DCG

In January 2015, Dominion completed the acquisition of 100% of the equity interests of DCG from SCANA Corporation for $497 million in cash, as adjusted for working capital. DCG owns and operates nearly 1,500 miles of FERC-regulated interstate natural gas pipeline in South Carolina and southeastern Georgia. This acquisition supports Dominion’s natural gas expansion into the Southeast. The allocation of the purchase price resulted in $277 million of net property, plant and equipment, $250 million of goodwill, of which approximately $225 million is expected to be deductible for income tax purposes, and $38 million of regulatory liabilities. The goodwill reflects the value associated with enhancing Dominion’s regulated gas position, economic value attributable to future expansion projects as well as increased opportunities for synergies. The acquired assets of DCG are included in the Dominion Energy operating segment.

On March 24, 2015, DCG converted to a limited liability company under the laws of South Carolina and changed its name from Carolina Gas Transmission Corporation to DCG. On April 1, 2015, Dominion contributed 100% of the issued and outstanding membership interests of DCG to Dominion Midstream in exchange for total consideration of $501 million, as adjusted for working capital. Total consideration to Dominion consisted of the issuance of a two-year, $301 million senior unsecured promissory note payable by Dominion Midstream at an annual interest rate of 0.6%, and 5,112,139 common units, valued at $200 million, representing limited partner interests in Dominion Midstream. The number of units was based on the volume weighted average trading price of Dominion Midstream’s common units for the ten trading days prior to April 1, 2015, or $39.12 per unit. Since Dominion consolidates Dominion Midstream for financial reporting purposes, this transaction was eliminated upon consolidation and did not impact Dominion’s financial position or cash flows.

Dominion Gas

Assignments of Shale Development Rights

In December 2013, Dominion Gas closed an agreement with a natural gas producer to convey over time approximately 79,000 acres of Marcellus Shale development rights underneath one of its natural gas storage fields. The agreement provided for payments to Dominion Gas, subject to customary adjustments, of up to approximately $200 million over a period of nine years, and an overriding royalty interest in gas produced from the acreage. In March 2015, Dominion Gas and the natural gas producer closed on an amendment to the agreement, which included the immediate conveyance of approximately 9,000 acres of Marcellus Shale development rights and a two year extension of the term of the original agreement. The conveyance of development rights resulted in the recognition of $43 million ($27 million after-tax) of previously deferred revenue to operations and maintenance expense in Dominion Gas’ Consolidated Statements of Income. At March 31, 2016, deferred revenue totaled $36 million. In April 2016, Dominion Gas and the natural gas producer closed on an amendment to the agreement, which included the immediate conveyance of a 32% partial interest in the remaining approximately 70,000 acres. This conveyance will result in the recognition of the remaining $36 million ($22 million after-tax) of previously deferred revenue to operations and maintenance expense in Dominion Gas’ Consolidated Statements of Income.

In March 2015, Dominion Gas conveyed to a natural gas producer approximately 11,000 acres of Marcellus Shale development rights underneath one of its natural gas storage fields and received proceeds of $27 million and an overriding royalty interest in gas produced from the acreage. This transaction resulted in a $27 million ($16 million after-tax) gain, included in other operations and maintenance expense in Dominion Gas’ Consolidated Statements of Income.

In November 2014, Dominion Gas closed on an agreement with a natural gas producer to convey over time approximately 24,000 acres of Marcellus Shale development rights underneath one of its natural gas storage fields. In connection with that agreement, in January 2016, Dominion Gas conveyed approximately 2,000 acres of Marcellus Shale development rights and received proceeds of $5 million and an overriding royalty interest in gas produced from the acreage. This transaction resulted in a $5 million ($3 million after-tax) gain, included in other operations and maintenance expense in Dominion Gas’ Consolidated Statements of Income.

Note 4. Operating Revenue

The Companies’ operating revenue consists of the following:


	Three Months Ended March 31,
	2016		2015
(millions)
Dominion
Electric sales:
Regulated	$	1,842	$	2,112
Nonregulated		389		406
Gas sales:
Regulated		65		116
Nonregulated		118		208
Gas transportation and storage		415		471
Other		92		96

Total operating revenue	$	2,921	$	3,409

Virginia Power
Regulated electric sales	$	1,842	$	2,112
Other		48		25

Total operating revenue	$	1,890	$	2,137

Dominion Gas
Gas sales:
Regulated	$	29	$	57
Nonregulated		1		3
Gas transportation and storage		351		412
NGL revenue		17		29
Other		33		30

Total operating revenue	$	431	$	531

Note 5. Income Taxes

For continuing operations, including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to the Companies’ effective income tax rate as follows:


	Dominion						Virginia Power						Dominion Gas
Three Months Ended March 31,	2016			2015			2016			2015			2016			2015
U.S. statutory rate		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%		35.0	%
Increases (reductions) resulting from:
State taxes, net of federal benefit		4.3			2.9			4.2			3.8			3.9			4.0
Investment tax credits		(10.9	)		(0.8	)		(1.3	)		—			—			—
Production tax credits		(0.8	)		(0.8	)		(0.6	)		(0.4	)		—			—
Other, net		(2.4	)		(0.6	)		(0.6	)		(0.7	)		(0.1	)		(0.1	)

Effective tax rate		25.2	%		35.7	%		36.7	%		37.7	%		38.8	%		38.9	%

As of March 31, 2016, there have been no material changes in the Companies’ unrecognized tax benefits or possible changes that could reasonably be expected to occur during the next twelve months. See Note 5 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015 for a discussion of these unrecognized tax benefits.

Note 6. Earnings Per Share

The following table presents the calculation of Dominion’s basic and diluted EPS:


	Three Months Ended March 31,
	2016		2015
(millions, except EPS)
Net income attributable to Dominion	$	524	$	536

Average shares of common stock outstanding – Basic		596.6		587.9
Net effect of dilutive securities ⁽¹⁾		1.6		2.0

Average shares of common stock outstanding – Diluted		598.2		589.9

Earnings Per Common Share – Basic and Diluted	$	0.88	$	0.91

(1)	Dilutive securities consist primarily of the 2013 Equity Units. See Note 14 in this report and Note 17 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015 for more information.

The 2014 Equity Units are potentially dilutive securities but were excluded from the calculation of diluted EPS for the three months ended March 31, 2016 and 2015, as the dilutive stock price threshold was not met.

Note 7. Accumulated Other Comprehensive Income

Dominion

The following table presents Dominion’s changes in AOCI by component, net of tax:


	Deferred Gains and Losses on Derivatives- Hedging Activities			Unrealized Gains and Losses on Investment Securities			Unrecognized Pension and Other Postretirement Benefit Costs			Other Comprehensive Income (Loss) From Equity Method Investee			Total
(millions)
Three Months Ended March 31, 2016
Beginning balance	$	(176	)	$	504		$	(797	)	$	(5	)	$	(474	)
Other comprehensive income before reclassifications: gains (losses)		53			15			—			—			68
Amounts reclassified from AOCI ⁽¹⁾ : (gains) losses		(63	)		(2	)		8			—			(57	)

Net current-period other comprehensive income (loss)		(10	)		13			8			—			11

Ending balance	$	(186	)	$	517		$	(789	)	$	(5	)	$	(463	)

Three Months Ended March 31, 2015
Beginning balance	$	(178	)	$	548		$	(782	)	$	(4	)	$	(416	)
Other comprehensive income before reclassifications: gains (losses)		(58	)		15			—			(1	)		(44	)
Amounts reclassified from AOCI ⁽¹⁾ : (gains) losses		59			(21	)		13			—			51

Net current-period other comprehensive income (loss)		1			(6	)		13			(1	)		7

Ending balance	$	(177	)	$	542		$	(769	)	$	(5	)	$	(409	)

(1)	See table below for details about these reclassifications.

The following table presents Dominion’s reclassifications out of AOCI by component:


Details About AOCI Components	Amounts Reclassified From AOCI			Affected Line Item in the Consolidated Statements of Income
(millions)
Three Months Ended March 31, 2016
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	(114	)	Operating revenue
		6		Purchased gas
		3		Electric fuel and other energy-related purchases
Interest rate contracts		3		Interest and related charges

		(102	)
Tax		39		Income tax expense

	$	(63	)


Details About AOCI Components	Amounts Reclassified From AOCI			Affected Line Item in the Consolidated Statements of Income
(millions)
Unrealized (gains) and losses on investment securities:
Realized (gain) loss on sale of securities	$	(10	)	Other income
Impairment		7		Other income

		(3	)
Tax		1		Income tax expense
	$	(2	)

Unrecognized pension and other postretirement benefit costs:
Prior service (credit) costs	$	(3	)	Other operations and maintenance
Actuarial (gains) losses		17		Other operations and maintenance

		14
Tax		(6	)	Income tax expense

	$	8

Three Months Ended March 31, 2015
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	92		Operating revenue
		5		Purchased gas
		(1	)	Electric fuel and other energy-related purchases
Interest rate contracts		2		Interest and related charges

		98
Tax		(39	)	Income tax expense

	$	59

Unrealized (gains) and losses on investment securities:
Realized (gain) loss on sale of securities	$	(39	)	Other income
Impairment		6		Other income

		(33	)
Tax		12		Income tax expense

	$	(21	)

Unrecognized pension and other postretirement benefit costs:
Prior service (credit) costs	$	(3	)	Other operations and maintenance
Actuarial (gains) losses		25		Other operations and maintenance

		22
Tax		(9	)	Income tax expense

	$	13

Dominion Gas

The following table presents Dominion Gas’ changes in AOCI by component, net of tax:


	Deferred Gains and Losses on Derivatives- Hedging Activities			Unrecognized Pension and Other Postretirement Benefit Costs			Total
(millions)
Three Months Ended March 31, 2016
Beginning balance	$	(17	)	$	(82	)	$	(99	)
Other comprehensive income before reclassifications: gains (losses)		(6	)		—			(6	)
Amounts reclassified from AOCI ⁽¹⁾ : (gains) losses		(2	)		—			(2	)

Net current-period other comprehensive loss		(8	)		—			(8	)

Ending balance	$	(25	)	$	(82	)	$	(107	)

Three Months Ended March 31, 2015
Beginning balance	$	(20	)	$	(66	)	$	(86	)
Other comprehensive income before reclassifications: gains (losses)		(4	)		—			(4	)
Amounts reclassified from AOCI ⁽¹⁾ : (gains) losses		—			1			1

Net current-period other comprehensive income (loss)		(4	)		1			(3	)

Ending balance	$	(24	)	$	(65	)	$	(89	)

(1)	See table below for details about these reclassifications.

The following table presents Dominion Gas’ reclassifications out of AOCI by component:


Details About AOCI Components	Amounts Reclassified From AOCI			Affected Line Item in the Consolidated Statements of Income
(millions)
Three Months Ended March 31, 2016
Deferred (gains) and losses on derivatives-hedging activities:
Commodity contracts	$	(4	)	Operating revenue

		(4	)
Tax		2		Income tax expense

	$	(2	)

Unrecognized pension and other postretirement benefit costs:
Actuarial (gains) losses	$	1		Other operations and maintenance

		1
Tax		(1	)	Income tax expense

	$	—

Three Months Ended March 31, 2015
Unrecognized pension and other postretirement benefit costs:
Actuarial (gains) losses	$	2		Other operations and maintenance

		2
Tax		(1	)	Income tax expense

	$	1

Note 8. Fair Value Measurements

The Companies’ fair value measurements are made in accordance with the policies discussed in Note 6 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015. See Note 9 in this report for further information about the Companies’ derivatives and hedge accounting activities.

The Companies enter into certain physical and financial forwards, futures, options and swaps, which are considered Level 3 as they have one or more inputs that are not observable and are significant to the valuation. The discounted cash flow method is used to value Level 3 physical and financial forwards and futures contracts. An option model is used to value Level 3 physical and financial options. The discounted cash flow model for forwards and futures calculates mark-to-market valuations based on forward market prices, original transaction prices, volumes, risk-free rate of return, and credit spreads. The option model calculates mark-to-market valuations using variations of the Black-Scholes option model. The inputs into the models are the forward market prices, implied price volatilities, risk-free rate of return, the option expiration dates, the option strike prices, the original sales prices, and volumes. For Level 3 fair value measurements, forward market prices, credit spreads and implied price volatilities are considered unobservable. The unobservable inputs are developed and substantiated using historical information, available market data, third-party data, and statistical analysis. Periodically, inputs to valuation models are reviewed and revised as needed, based on historical information, updated market data, market liquidity and relationships, and changes in third-party pricing sources.

The following table presents Dominion’s quantitative information about Level 3 fair value measurements at March 31, 2016. The range and weighted average are presented in dollars for market price inputs and percentages for credit spreads and price volatility.


	Fair Value (millions)		Valuation Techniques	Unobservable Input	Range			Weighted Average ⁽¹⁾
Assets
Physical and financial forwards and futures:
Natural gas ⁽²⁾	$	115	Discounted cash flow	Market price (per Dth) ⁽³⁾		(2) - 6			—
				Credit spread ⁽⁴⁾		1% - 7	%		3	%
FTRs		4	Discounted cash flow	Market price (per MWh) ⁽³⁾		(5) - 7			1
Physical and financial options:
Natural gas		5	Option model	Market price (per Dth) ⁽³⁾		1 - 6			3
				Price volatility ⁽⁵⁾		18% - 59	%		22	%

Total assets	$	124

Liabilities
Physical and financial forwards and futures:
Natural gas ⁽²⁾	$	7	Discounted cash flow	Market price (per Dth) ⁽³⁾		(1) - 3			2
FTRs		6	Discounted cash flow	Market price (per MWh) ⁽³⁾		(3) - 5			1
Physical and financial options:
Natural gas		2	Option model	Market price (per Dth) ⁽³⁾		1 - 4			2
				Price volatility ⁽⁵⁾		26% - 59	%		38	%

Total liabilities	$	15

(1)	Averages weighted by volume.

(2)	Includes basis.

(3)	Represents market prices beyond defined terms for Levels 1 and 2.

(4)	Represents credit spreads unrepresented in published markets.

(5)	Represents volatilities unrepresented in published markets.

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:


Significant Unobservable Inputs	Position	Change to Input	Impact on Fair Value Measurement
Market price	Buy	Increase (decrease)	Gain (loss)
Market price	Sell	Increase (decrease)	Loss (gain)
Price volatility	Buy	Increase (decrease)	Gain (loss)
Price volatility	Sell	Increase (decrease)	Loss (gain)
Credit spread	Asset	Increase (decrease)	Loss (gain)

Recurring Fair Value Measurements

Dominion

The following table presents Dominion’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:


	Level 1		Level 2		Level 3		Total
(millions)
At March 31, 2016
Assets
Derivatives:
Commodity	$	1	$	245	$	124	$	370
Interest rate		—		31		—		31
Investments ⁽¹⁾ :
Equity securities:
U.S.:
Large cap		2,571		—		—		2,571
Other		5		—		—		5
REIT		67		—		—		67
Non-U.S.:
Large cap		9		—		—		9
Fixed income:
Corporate debt instruments		—		464		—		464
U.S. Treasury securities and agency debentures		451		219		—		670
State and municipal		—		372		—		372
Other		—		99		—		99
Cash equivalents and other		6		1		—		7

Total assets	$	3,110	$	1,431	$	124	$	4,665

Liabilities
Derivatives:
Commodity	$	—	$	124	$	15	$	139
Interest rate		—		291		—		291

Total liabilities	$	—	$	415	$	15	$	430

At December 31, 2015
Assets
Derivatives:
Commodity	$	1	$	249	$	114	$	364
Interest rate		—		24		—		24


	Level 1		Level 2		Level 3		Total
Investments ⁽¹⁾ :
Equity securities:
U.S.:
Large cap		2,547		—		—		2,547
Other		5		—		—		5
REIT		63		—		—		63
Non-U.S.:
Large cap		10		—		—		10
Fixed income:
Corporate debt instruments		—		437		—		437
U.S. Treasury securities and agency debentures		458		201		—		659
State and municipal		—		376		—		376
Other		—		100		—		100
Cash equivalents and other		2		2		—		4

Total assets	$	3,086	$	1,389	$	114	$	4,589

Liabilities
Derivatives:
Commodity	$	—	$	141	$	19	$	160
Interest rate		—		183		—		183

Total liabilities	$	—	$	324	$	19	$	343

(1)	Includes investments held in the nuclear decommissioning and rabbi trusts.

The following table presents the net change in Dominion’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:


	Three Months Ended March 31,
	2016			2015
(millions)
Beginning balance	$	95		$	107
Total realized and unrealized gains (losses):
Included in earnings		(7	)		15
Included in other comprehensive income (loss)		3			(11	)
Included in regulatory assets/liabilities		17			(24	)
Settlements		8			(14	)
Transfers out of Level 3		(7	)		3

Ending balance	$	109		$	76

The following table presents Dominion’s classification of gains and losses included in earnings in the Level 3 fair value category. There were no unrealized gains or losses included in earnings in the Level 3 fair value category relating to assets/liabilities still held at the reporting date for the three months ended March 31, 2016 and 2015.


	Operating Revenue		Electric Fuel and Other Energy- Related Purchases			Total
(millions)
Three Months Ended March 31, 2016
Total gains (losses) included in earnings	$	—	$	(7	)	$	(7	)
Three Months Ended March 31, 2015
Total gains (losses) included in earnings		2		13			15

Virginia Power

The following table presents Virginia Power’s quantitative information about Level 3 fair value measurements at March 31, 2016. The range and weighted average are presented in dollars for market price inputs and percentages for credit spreads and price volatility.


	Fair Value (millions)		Valuation Techniques	Unobservable Input	Range			Weighted Average ⁽¹⁾
Assets
Physical and financial forwards and futures:
FTRs	$	4	Discounted cash flow	Market price (per MWh) ⁽³⁾		(5) - 7			1
Natural gas ⁽²⁾		111	Discounted cash flow	Market price (per Dth) ⁽³⁾		(2) - 6			—
				Credit spread ⁽⁴⁾		1% - 7	%		3	%
Physical and financial options:
Natural gas		1	Option model	Market price (per Dth) ⁽³⁾		2 - 6			3
				Price volatility ⁽⁵⁾		18% - 29	%		21	%

Total assets	$	116

Liabilities
Physical and financial forwards and futures:
FTRs	$	6	Discounted cash flow	Market price (per MWh) ⁽³⁾		(3) - 5			1

Total liabilities	$	6

(1)	Averages weighted by volume.

(2)	Includes basis.

(3)	Represents market prices beyond defined terms for Levels 1 and 2.

(4)	Represents credit spreads unrepresented in published markets.

(5)	Represents volatilities unrepresented in published markets.

Sensitivity of the fair value measurements to changes in the significant unobservable inputs is as follows:


Significant Unobservable Inputs	Position	Change to Input	Impact on Fair Value Measurement
Market price	Buy	Increase (decrease)	Gain (loss)
Market price	Sell	Increase (decrease)	Loss (gain)
Credit spread	Asset	Increase (decrease)	Loss (gain)
Price volatility	Buy	Increase (decrease)	Gain (loss)
Price volatility	Sell	Increase (decrease)	Loss (gain)

The following table presents Virginia Power’s assets and liabilities that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:


	Level 1		Level 2		Level 3		Total
(millions)
At March 31, 2016
Assets
Derivatives:
Commodity	$	—	$	14	$	116	$	130
Interest rate		—		8		—		8
Investments ⁽¹⁾ :
Equity securities:
U.S. large cap		1,113		—		—		1,113
REIT		67		—		—		67
Fixed income:
Corporate debt instruments		—		250		—		250
U.S. Treasury securities and agency debentures		164		99		—		263
State and municipal		—		173		—		173
Other		—		46		—		46

Total assets	$	1,344	$	590	$	116	$	2,050

Liabilities
Derivatives:
Commodity	$	—	$	24	$	6	$	30
Interest rate		—		144		—		144

Total liabilities	$	—	$	168	$	6	$	174

At December 31, 2015
Assets
Derivatives:
Commodity	$	—	$	13	$	101	$	114
Interest rate		—		13		—		13
Investments ⁽¹⁾ :
Equity securities:
U.S. large cap		1,100		—		—		1,100
REIT		63		—		—		63
Fixed income:
Corporate debt instruments		—		238		—		238
U.S. Treasury securities and agency debentures		180		79		—		259
State and municipal		—		175		—		175
Other		—		34		—		34

Total assets	$	1,343	$	552	$	101	$	1,996

Liabilities
Derivatives:
Commodity	$	—	$	19	$	8	$	27
Interest rate		—		59		—		59

Total liabilities	$	—	$	78	$	8	$	86

(1)	Includes investments held in the nuclear decommissioning and rabbi trusts.

The following table presents the net change in Virginia Power’s assets and liabilities measured at fair value on a recurring basis and included in the Level 3 fair value category:


	Three Months Ended March 31,
	2016			2015
(millions)
Beginning balance	$	93		$	102
Total realized and unrealized gains (losses):
Included in earnings		(8	)		14
Included in regulatory assets/liabilities		17			(24	)
Settlements		8			(14	)

Ending balance	$	110		$	78

The gains and losses included in earnings in the Level 3 fair value category were classified in electric fuel and other energy-related purchases in Virginia Power’s Consolidated Statements of Income for the three months ended March 31, 2016 and 2015. There were no unrealized gains or losses included in earnings in the Level 3 fair value category relating to assets/liabilities still held at the reporting date for the three months ended March 31, 2016 and 2015.

Dominion Gas

The following table presents Dominion Gas’ assets and liabilities for derivatives that are measured at fair value on a recurring basis for each hierarchy level, including both current and noncurrent portions:


	Level 1		Level 2		Level 3		Total
(millions)
At March 31, 2016
Assets
Commodity	$	—	$	6	$	—	$	6

Total Assets	$	—	$	6	$	—	$	6
Liabilities
Interest rate	$	—	$	23	$	—	$	23

Total liabilities	$	—	$	23	$	—	$	23

At December 31, 2015
Assets
Commodity	$	—	$	5	$	6	$	11

Total Assets	$	—	$	5	$	6	$	11
Liabilities
Interest rate	$	—	$	14	$	—	$	14

Total liabilities	$	—	$	14	$	—	$	14

The following table presents the net change in Dominion Gas’ assets and liabilities for derivatives measured at fair value on a recurring basis and included in the Level 3 fair value category:


	Three Months Ended March 31,
	2016			2015
(millions)
Beginning balance	$	6		$	2
Total realized and unrealized gains (losses):
Included in earnings		—			1
Included in other comprehensive income (loss)		2			(11	)
Settlements		—			(1	)
Transfers out of Level 3		(8	)		9

Ending balance	$	—		$	—

The gains and losses included in earnings in the Level 3 fair value category were classified in operating revenue in Dominion Gas’ Consolidated Statements of Income for the three months ended March 31, 2016 and 2015. There were no unrealized gains or losses included in earnings in the Level 3 fair value category relating to assets/liabilities still held at the reporting date for the three months ended March 31, 2016 and 2015.

Fair Value of Financial Instruments

Substantially all of the Companies’ financial instruments are recorded at fair value, with the exception of the instruments described below, which are reported at historical cost. Estimated fair values have been determined using available market information and valuation methodologies considered appropriate by management. The carrying amount of cash and cash equivalents, restricted cash (which is recorded in other current assets), customer and other receivables, short-term debt, affiliated current borrowings, payables to affiliates and accounts payable are representative of fair value because of the short-term nature of these instruments. For the Companies’ financial instruments that are not recorded at fair value, the carrying amounts and estimated fair values are as follows:


	March 31, 2016				December 31, 2015
	Carrying Amount		Estimated Fair Value ⁽¹⁾		Carrying Amount		Estimated Fair Value ⁽¹⁾
(millions)
Dominion
Long-term debt, including securities due within one year ⁽²⁾	$	22,581	$	24,443	$	21,873	$	23,210
Junior subordinated notes ⁽³⁾		1,849		1,696		1,340		1,192
Remarketable subordinated notes ⁽³⁾		1,530		1,647		2,080		2,129

Virginia Power
Long-term debt, including securities due within one year ⁽³⁾	$	9,663	$	11,020	$	9,368	$	10,400

Dominion Gas
Long-term debt, including securities due within one year ⁽³⁾	$	3,271	$	3,375	$	3,269	$	3,299

(1)

Fair value is estimated using market prices, where available, and interest rates currently available for issuance of debt with similar terms and remaining maturities. All fair value measurements are classified as Level 2. The carrying amount of debt issues with short-term maturities and variable rates refinanced at current market rates is a reasonable estimate of their fair value.

(2)	Carrying amount includes amounts which represent the unamortized debt issuance costs, discount and/or premium. At March 31, 2016 and December 31, 2015, includes the valuation of certain fair value hedges associated with fixed rate debt of $19 million and $7 million, respectively.

(3)	Carrying amount includes amounts which represent the unamortized debt issuance costs, discount and/or premium.

Note 9. Derivatives and Hedge Accounting Activities

The Companies’ accounting policies and objectives and strategies for using derivative instruments are discussed in Note 2 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015. See Note 8 in this report for further information about fair value measurements and associated valuation methods for derivatives.

Derivative assets and liabilities are presented gross on the Companies’ Consolidated Balance Sheets. Dominion’s derivative contracts include both over-the-counter transactions and those that are executed on an exchange or other trading platform (exchange contracts) and centrally cleared. Dominion Gas’ and Virginia Power’s derivative contracts consist of over-the-counter transactions. Over-the-counter contracts are bilateral contracts that are transacted directly with a counterparty. Exchange contracts utilize a financial intermediary, exchange, or clearinghouse to enter, execute, or clear the transactions. Certain over-the-counter and exchange contracts contain contractual rights of setoff through master netting arrangements, derivative clearing agreements, and contract default provisions. In addition, the contracts are subject to conditional rights of setoff through counterparty nonperformance, insolvency, or other conditions.

In general, most over-the-counter transactions and all exchange contracts are subject to collateral requirements. Types of collateral for over-the-counter and exchange contracts include cash, letters of credit, and in some cases other forms of security, none of which are subject to restrictions. Cash collateral is used in the table below to offset derivative assets and liabilities. Certain accounts receivable and accounts payable recognized on the Companies’ Consolidated Balance Sheets, as well as letters of credit and other forms of security, all of which are not included in the tables below, are subject to offset under master netting or similar arrangements and would reduce the net exposure.

Dominion

Balance Sheet Presentation

The tables below present Dominion’s derivative asset and liability balances by type of financial instrument, before and after the effects of offsetting:


	March 31, 2016						December 31, 2015
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet
(millions)
Interest rate contracts:
Over-the-counter	$	31	$	—	$	31	$	24	$	—	$	24
Commodity contracts:
Over-the-counter		244		—		244		217		—		217
Exchange		119		—		119		138		—		138

Total derivatives, subject to a master netting or similar arrangement		394		—		394		379		—		379
Total derivatives, not subject to a master netting or similar arrangement		7		—		7		9		—		9

Total	$	401	$	—	$	401	$	388	$	—	$	388


			March 31, 2016								December 31, 2015
			Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
	Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts
(millions)
Interest rate contracts:
Over-the-counter	$	31	$	19	$	—	$	12	$	24	$	22	$	—	$	2
Commodity contracts:
Over-the-counter		244		20		—		224		217		37		—		180
Exchange		119		84		—		35		138		82		—		56

Total	$	394	$	123	$	—	$	271	$	379	$	141	$	—	$	238


	March 31, 2016						December 31, 2015
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet
(millions)
Interest rate contracts:
Over-the-counter	$	291	$	—	$	291	$	183	$	—	$	183
Commodity contracts:
Over-the-counter		48		—		48		70		—		70
Exchange		84		—		84		82		—		82

Total derivatives, subject to a master netting or similar arrangement		423		—		423		335		—		335
Total derivatives, not subject to a master netting or similar arrangement		7		—		7		8		—		8

Total	$	430	$	—	$	430	$	343	$	—	$	343


			March 31, 2016								December 31, 2015
			Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
	Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts
(millions)
Interest rate contracts:
Over-the-counter	$	291	$	19	$	—	$	272	$	183	$	22	$	—	$	161
Commodity contracts:
Over-the-counter		48		20		—		28		70		37		—		33
Exchange		84		84		—		—		82		82		—		—

Total	$	423	$	123	$	—	$	300	$	335	$	141	$	—	$	194

Volumes

The following table presents the volume of Dominion’s derivative activity at March 31, 2016. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of their long and short positions.


	Current		Noncurrent
Natural Gas (bcf):
Fixed price ⁽¹⁾		99		29
Basis		229		591
Electricity (MWh):
Fixed price		13,212,481		1,940,000
FTRs		14,308,210		—
Capacity (MW)		3,050		—
Liquids (Gal) ⁽²⁾		76,692,000		—
Interest rate	$	2,200,000,000	$	3,100,000,000

(1)	Includes options.

(2)	Includes NGLs and oil.

Ineffectiveness and AOCI

For the three months ended March 31, 2016 and 2015, gains or losses on hedging instruments determined to be ineffective and amounts excluded from the assessment of effectiveness were not material. Amounts excluded from the assessment of effectiveness include gains or losses attributable to changes in the time value of options and changes in the differences between spot prices and forward prices.

The following table presents selected information related to gains (losses) on cash flow hedges included in AOCI in Dominion’s Consolidated Balance Sheet at March 31, 2016:

AOCI
After-Tax

Amounts Expected to be
Reclassified to Earnings
During the Next 12 Months
After-Tax

Maximum Term

(millions)

Commodities:

Gas

)

24 months

Electricity

120

119

21 months

Other

12 months

Interest rate

(303

)

(15

)

384 months

Total

(186

)

101

The amounts that will be reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., anticipated sales) in earnings, thereby achieving the realization of prices contemplated by the underlying risk management strategies and will vary from the expected amounts presented above as a result of changes in market prices and interest rates.

Fair Value and Gains and Losses on Derivative Instruments

The following table presents the fair values of Dominion’s derivatives and where they are presented in its Consolidated Balance Sheets:


	Fair Value – Derivatives under Hedge Accounting		Fair Value – Derivatives not under Hedge Accounting		Total Fair Value
(millions)
At March 31, 2016
ASSETS
Current Assets
Commodity	$	96	$	148	$	244
Interest rate		16		—		16

Total current derivative assets ⁽¹⁾		112		148		260

Noncurrent Assets
Commodity		3		123		126
Interest rate		15		—		15

Total noncurrent derivative assets ⁽²⁾		18		123		141

Total derivative assets	$	130	$	271	$	401

LIABILITIES
Current Liabilities
Commodity	$	26	$	96	$	122
Interest rate		148		—		148

Total current derivative liabilities ⁽³⁾		174		96		270

Noncurrent Liabilities
Commodity		1		16		17
Interest Rate		143		—		143

Total noncurrent derivative liabilities ⁽⁴⁾		144		16		160

Total derivative liabilities	$	318	$	112	$	430

At December 31, 2015
ASSETS
Current Assets
Commodity	$	101	$	151	$	252
Interest rate		3		—		3

Total current derivative assets ⁽¹⁾		104		151		255

Noncurrent Assets
Commodity		3		109		112
Interest rate		21		—		21

Total noncurrent derivative assets ⁽²⁾		24		109		133

Total derivative assets	$	128	$	260	$	388

LIABILITIES
Current Liabilities
Commodity	$	32	$	116	$	148
Interest rate		164		—		164

Total current derivative liabilities ⁽³⁾		196		116		312

Noncurrent Liabilities
Commodity		—		12		12
Interest rate		19		—		19

Total noncurrent derivative liabilities ⁽⁴⁾		19		12		31

Total derivative liabilities	$	215	$	128	$	343

(1)	Current derivative assets are presented in other current assets in Dominion’s Consolidated Balance Sheets.

(2)	Noncurrent derivative assets are presented in other deferred charges and other assets in Dominion’s Consolidated Balance Sheets.

(3)	Current derivative liabilities are presented in other current liabilities in Dominion’s Consolidated Balance Sheets.

(4)	Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Dominion’s Consolidated Balance Sheets.

The following tables present the gains and losses on Dominion’s derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Income:


Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion) ⁽¹⁾			Amount of Gain (Loss) Reclassified From AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment ⁽²⁾
(millions)
Three Months Ended March 31, 2016
Derivative type and location of gains (losses):
Commodity:
Operating revenue				$	114
Purchased gas					(6	)
Electric fuel and other energy-related purchases					(3	)

Total commodity	$	173		$	105		$	—

Interest rate ⁽³⁾		(87	)		(3	)		(133	)

Total	$	86		$	102		$	(133	)

Three Months Ended March 31, 2015
Derivative type and location of gains (losses):
Commodity:
Operating revenue				$	(92	)
Purchased gas					(5	)
Electric fuel and other energy-related purchases					1

Total commodity	$	(41	)	$	(96	)	$	3

Interest rate ⁽³⁾		(58	)		(2	)		(49	)

Total	$	(99	)	$	(98	)	$	(46	)

(1)	Amounts deferred into AOCI have no associated effect in Dominion’s Consolidated Statements of Income.

(2)	Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion’s Consolidated Statements of Income.

(3)	Amounts recorded in Dominion’s Consolidated Statements of Income are classified in interest and related charges.


	Amount of Gain (Loss) Recognized in Income on Derivatives ⁽¹⁾
	Three Months Ended March 31,
Derivatives Not Designated as Hedging Instruments	2016			2015
(millions)
Derivative type and location of gains (losses):
Commodity:
Operating revenue	$	2		$	3
Purchased gas		—			(2	)
Electric fuel and other energy-related purchases		(23	)		6

Total	$	(21	)	$	7

(1)	Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Dominion’s Consolidated Statements of Income.

Virginia Power

Balance Sheet Presentation

The tables below present Virginia Power’s derivative asset and liability balances by type of financial instrument, before and after the effects of offsetting:


	March 31, 2016						December 31, 2015
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet
(millions)
Interest rate contracts:
Over-the-counter	$	8	$	—	$	8	$	13	$	—	$	13
Commodity contracts:
Over-the-counter		115		—		115		101		—		101

Total derivatives, subject to a master netting or similar arrangement		123		—		123		114		—		114
Total derivatives, not subject to a master netting or similar arrangement		15		—		15		13		—		13

Total	$	138	$	—	$	138	$	127	$	—	$	127


			March 31, 2016								December 31, 2015
			Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
	Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts
(millions)
Interest rate contracts:
Over-the-counter	$	8	$	3	$	—	$	5	$	13	$	10	$	—	$	3
Commodity contracts:
Over-the-counter		115		4		—		111		101		3		—		98

Total	$	123	$	7	$	—	$	116	$	114	$	13	$	—	$	101


	March 31, 2016						December 31, 2015
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet
(millions)
Interest rate contracts:
Over-the-counter	$	144	$	—	$	144	$	59	$	—	$	59
Commodity contracts:
Over-the-counter		15		—		15		5		—		5

Total derivatives, subject to a master netting or similar arrangement		159		—		159		64		—		64
Total derivatives, not subject to a master netting or similar arrangement		15		—		15		22		—		22

Total	$	174	$	—	$	174	$	86	$	—	$	86


			March 31, 2016								December 31, 2015
			Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
	Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts
(millions)
Interest rate contracts:
Over-the-counter	$	144	$	3	$	—	$	141	$	59	$	10	$	—	$	49
Commodity contracts:
Over-the-counter		15		4		—		11		5		3		—		2

Total	$	159	$	7	$	—	$	152	$	64	$	13	$	—	$	51

Volumes

The following table presents the volume of Virginia Power’s derivative activity at March 31, 2016. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of their long and short positions.


	Current		Noncurrent
Natural Gas (bcf):
Fixed price ⁽¹⁾		36		17
Basis		106		545
Electricity (MWh):
FTRs		11,952,866		—
Capacity (MW)		3,050		—
Interest rate	$	700,000,000	$	1,100,000,000

(1)	Includes options.

Ineffectiveness and AOCI

For the three months ended March 31, 2016 and 2015, gains or losses on hedging instruments determined to be ineffective were not material.

The following table presents selected information related to gains (losses) on cash flow hedges included in AOCI in Virginia Power’s Consolidated Balance Sheet at March 31, 2016:


	AOCI After-Tax			Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax			Maximum Term
(millions)
Interest rate	$	(15	)		(1	)		384 months

Total	$	(15	)	$	(1	)

Fair Value and Gains and Losses on Derivative Instruments

The following table presents the fair values of Virginia Power’s derivatives and where they are presented in its Consolidated Balance Sheets:


	Fair Value – Derivatives under Hedge Accounting		Fair Value – Derivatives not under Hedge Accounting		Total Fair Value
(millions)
At March 31, 2016
ASSETS
Current Assets
Commodity	$	—	$	17	$	17
Interest rate		8		—		8

Total current derivative assets ⁽¹⁾		8		17		25

Noncurrent Assets
Commodity		—		113		113

Total noncurrent derivative assets ⁽²⁾		—		113		113

Total derivative assets	$	8	$	130	$	138

LIABILITIES
Current Liabilities
Commodity	$	—	$	20	$	20
Interest rate		40		—		40

Total current derivative liabilities ⁽³⁾		40		20		60

Noncurrent Liabilities
Commodity		—		10		10
Interest rate		104		—		104

Total noncurrent derivatives liabilities ⁽⁴⁾		104		10		114

Total derivative liabilities	$	144	$	30	$	174

At December 31, 2015
ASSETS
Current Assets
Commodity	$	—	$	18	$	18

Total current derivative assets ⁽¹⁾		—		18		18

Noncurrent Assets
Commodity		—		96		96
Interest rate		13		—		13

Total noncurrent derivative assets ⁽²⁾		13		96		109

Total derivative assets	$	13	$	114	$	127

LIABILITIES
Current Liabilities
Commodity	$	—	$	23	$	23
Interest rate		57		—		57

Total current derivative liabilities ⁽³⁾		57		23		80

Noncurrent Liabilities
Commodity		—		4		4
Interest rate		2		—		2

Total noncurrent derivative liabilities ⁽⁴⁾		2		4		6

Total derivative liabilities	$	59	$	27	$	86

(1)	Current derivative assets are presented in other current assets in Virginia Power’s Consolidated Balance Sheets.

(2)	Noncurrent derivative assets are presented in other deferred charges and other assets in Virginia Power’s Consolidated Balance Sheets.

(3)	Current derivative liabilities are presented in other current liabilities in Virginia Power’s Consolidated Balance Sheets.

(4)	Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Virginia Power’s Consolidated Balance Sheets.

The following tables present the gains and losses on Virginia Power’s derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Income:


Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion) ⁽¹⁾			Amount of Gain (Loss) Reclassified From AOCI to Income			Increase (Decrease) in Derivatives Subject to Regulatory Treatment ⁽²⁾
(millions)
Three Months Ended March 31, 2016
Derivative type and location of gains (losses):
Interest rate ⁽³⁾	$	(14	)	$	—		$	(133	)

Total	$	(14	)	$	—		$	(133	)

Three Months Ended March 31, 2015
Derivative type and location of gains (losses):
Commodity:
Electric fuel and other energy-related purchases				$	(1	)

Total commodity	$	—		$	(1	)	$	3

Interest rate ⁽³⁾		(6	)		—			(49	)

Total	$	(6	)	$	(1	)	$	(46	)

(1)	Amounts deferred into AOCI have no associated effect in Virginia Power’s Consolidated Statements of Income.

(2)	Represents net derivative activity deferred into and amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income.

(3)	Amounts recorded in Virginia Power’s Consolidated Statements of Income are classified in interest and related charges.


	Amount of Gain (Loss) Recognized in Income on Derivatives ⁽¹⁾
	Three Months Ended March 31,
Derivatives Not Designated as Hedging Instruments	2016			2015
(millions)
Derivative type and location of gains (losses):
Commodity ⁽²⁾	$	(20	)	$	7

Total	$	(20	)	$	7

(1)	Includes derivative activity amortized out of regulatory assets/liabilities. Amounts deferred into regulatory assets/liabilities have no associated effect in Virginia Power’s Consolidated Statements of Income.

(2)	Amounts recorded in Virginia Power’s Consolidated Statements of Income are classified in electric fuel and other energy-related purchases.

Dominion Gas

Balance Sheet Presentation

The tables below present Dominion Gas’ derivative asset and liability balances by type of financial instrument, before and after the effects of offsetting.


	March 31, 2016						December 31, 2015
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet
(millions)
Commodity contracts:
Over-the-counter	$	6	$	—	$	6	$	11	$	—	$	11

Total derivatives, subject to a master netting or similar arrangement	$	6	$	—	$	6	$	11	$	—	$	11


			March 31, 2016								December 31, 2015
			Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
	Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amounts
(millions)
Commodity contracts:
Over-the-counter	$	6	$	—	$	—	$	6	$	11	$	—	$	—	$	11

Total	$	6	$	—	$	—	$	6	$	11	$	—	$	—	$	11


	March 31, 2016						December 31, 2015
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet
(millions)
Interest rate contracts:
Over-the-counter	$	23	$	—	$	23	$	14	$	—	$	14

Total derivatives, subject to a master netting or similar arrangement	$	23	$	—	$	23	$	14	$	—	$	14


			March 31, 2016								December 31, 2015
			Gross Amounts Not Offset in the Consolidated Balance Sheet								Gross Amounts Not Offset in the Consolidated Balance Sheet
	Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Paid		Net Amounts
(millions)
Interest rate contracts:
Over-the-counter	$	23	$	—	$	—	$	23	$	14	$	—	$	—	$	14

Total	$	23	$	—	$	—	$	23	$	14	$	—	$	—	$	14

Volumes

The following table presents the volume of Dominion Gas’ derivative activity at March 31, 2016. These volumes are based on open derivative positions and represent the combined absolute value of their long and short positions, except in the case of offsetting transactions, for which they represent the absolute value of the net volume of their long and short positions.


	Current		Noncurrent
NGLs (Gal)		67,704,000		—
Interest rate	$	250,000,000	$	—

Ineffectiveness and AOCI

For the three months ended March 31, 2016 and 2015, gains or losses on hedging instruments determined to be ineffective were not material.

The following table presents selected information related to losses on cash flow hedges included in AOCI in Dominion Gas’ Consolidated Balance Sheet at March 31, 2016:


	AOCI After-Tax			Amounts Expected to be Reclassified to Earnings During the Next 12 Months After-Tax		Maximum Term
(millions)
Commodities:
NGLs	$	4		$	4		12 months
Interest rate		(29	)		—		345 months

Total	$	(25	)	$	4

Fair Value and Gains and Losses on Derivative Instruments

The following tables present the fair values of Dominion Gas’ commodity and interest rate derivatives and where they are presented in its Consolidated Balance Sheets:


	Fair Value-Derivatives Under Hedge Accounting		Fair Value-Derivatives Not Under Hedge Accounting		Total Fair Value
(millions)
At March 31, 2016
ASSETS
Current Assets
Commodity	$	6	$	—	$	6

Total current derivative assets ⁽¹⁾		6		—		6

Total derivative assets	$	6	$	—	$	6

LIABILITIES
Current Liabilities
Interest rate	$	23	$	—	$	23

Total current derivative liabilities ⁽³⁾		23		—		23

Total derivative liabilities	$	23	$	—	$	23

At December 31, 2015
ASSETS
Current Assets
Commodity	$	10	$	—	$	10

Total current derivative assets ⁽¹⁾		10		—		10

Noncurrent Assets
Commodity		1		—		1

Total noncurrent derivatives assets ⁽²⁾		1		—		1

Total derivative assets	$	11	$	—	$	11

LIABILITIES
Noncurrent Liabilities
Interest rate	$	14	$	—	$	14

Total noncurrent derivative liabilities ⁽⁴⁾		14		—		14

Total derivative liabilities	$	14	$	—	$	14

(1)	Current derivative assets are presented in other current assets in Dominion Gas’ Consolidated Balance Sheets.

(2)	Noncurrent derivative assets are presented in other deferred charges and other assets in Dominion Gas’ Consolidated Balance Sheets.

(3)	Current derivative liabilities are presented in other current liabilities in Dominion Gas’ Consolidated Balance Sheets.

(4)	Noncurrent derivative liabilities are presented in other deferred credits and other liabilities in Dominion Gas’ Consolidated Balance Sheets.

The following table presents the gains and losses on Dominion Gas’ derivatives, as well as where the associated activity is presented in its Consolidated Balance Sheets and Statements of Income:


Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion) ⁽¹⁾			Amount of Gain (Loss) Reclassified From AOCI to Income
(millions)
Three Months Ended March 31, 2016
Derivative type and location of gains (losses):
Commodity:
Operating revenue				$	4

Total commodity	$	(1	)	$	4

Interest rate ⁽²⁾		(9	)		—

Total	$	(10	)	$	4

Three Months Ended March 31, 2015
Derivative type and location of gains (losses):
Commodity:
Operating revenue				$	—

Total commodity	$	(2	)	$	—

Interest rate ⁽²⁾		(4	)		—

Total	$	(6	)	$	—

(1)	Amounts deferred into AOCI have no associated effect in Dominion Gas’ Consolidated Statements of Income.

(2)	Amounts recorded in Dominion Gas’ Consolidated Statements of Income are classified in interest and related charges.

Note 10. Investments

Dominion

Equity and Debt Securities

Rabbi Trust Securities

Marketable equity and debt securities and cash equivalents held in Dominion’s rabbi trusts and classified as trading totaled $98 million and $100 million at March 31, 2016 and December 31, 2015, respectively.

Decommissioning Trust Securities

Dominion holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Dominion’s decommissioning trust funds are summarized below:


	Amortized Cost		Total Unrealized Gains ⁽¹⁾		Total Unrealized Losses ⁽¹⁾			Fair Value
(millions)
At March 31, 2016
Marketable equity securities:
U.S. large cap	$	1,317	$	1,218	$	—		$	2,535
REIT		60		7		—			67
Marketable debt securities:
Corporate bonds		448		19		(3	)		464
U.S. Treasury securities and agency debentures		650		20		—			670
State and municipal		308		25		—			333
Other		96		—		—			96
Cost method investments		70		—		—			70
Cash equivalents and other ⁽²⁾		4		—		—			4

Total	$	2,953	$	1,289	$	(3	) ⁽³⁾	$	4,239

At December 31, 2015
Marketable equity securities:
U.S. large cap	$	1,295	$	1,213	$	—		$	2,508
REIT		59		4		—			63
Marketable debt securities:
Corporate bonds		433		11		(7	)		437
U.S. Treasury securities and agency debentures		654		8		(4	)		658
State and municipal		312		22		—			334
Other		99		—		—			99
Cost method investments		70		—		—			70
Cash equivalents and other ⁽²⁾		14		—		—			14

Total	$	2,936	$	1,258	$	(11	) ⁽³⁾	$	4,183

(1)	Included in AOCI and the nuclear decommissioning trust regulatory liability.

(2)	Includes pending sales of securities of $2 million and $12 million at March 31, 2016 and December 31, 2015, respectively.

(3)	The fair value of securities in an unrealized loss position was $151 million and $592 million at March 31, 2016 and December 31, 2015, respectively.

The fair value of Dominion’s marketable debt securities held in nuclear decommissioning trust funds at March 31, 2016 by contractual maturity is as follows:


	Amount
(millions)
Due in one year or less	$	211
Due after one year through five years		423
Due after five years through ten years		380
Due after ten years		549

Total	$	1,563

Presented below is selected information regarding Dominion’s marketable equity and debt securities held in nuclear decommissioning trust funds.


	Three Months Ended March 31,
	2016		2015
(millions)
Proceeds from sales	$	368	$	337
Realized gains ⁽¹⁾		25		56
Realized losses ⁽¹⁾		19		17

(1)	Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.

Other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds for Dominion were not material for the three months ended March 31, 2016 and 2015.

Virginia Power

Virginia Power holds marketable equity and debt securities (classified as available-for-sale), cash equivalents and cost method investments in nuclear decommissioning trust funds to fund future decommissioning costs for its nuclear plants. Virginia Power’s decommissioning trust funds are summarized below:


	Amortized Cost		Total Unrealized Gains ⁽¹⁾		Total Unrealized Losses ⁽¹⁾			Fair Value
(millions)
At March 31, 2016
Marketable equity securities:
U.S. large cap	$	583	$	529	$	—		$	1,112
REIT		60		7		—			67
Marketable debt securities:
Corporate bonds		242		9		(1	)		250
U.S. Treasury securities and agency debentures		257		6		—			263
State and municipal		159		13		—			172
Other		46		—		—			46
Cost method investments		70		—		—			70

Total	$	1,417	$	564	$	(1	) ⁽³⁾	$	1,980

At December 31, 2015
Marketable equity securities:
U.S. large cap	$	574	$	525	$	—		$	1,099
REIT		59		4		—			63
Marketable debt securities:
Corporate bonds		237		5		(4	)		238
U.S. Treasury securities and agency debentures		260		1		(2	)		259
State and municipal		162		13		(1	)		174
Other		34		—		—			34
Cost method investments		70		—		—			70
Cash equivalents and other ⁽²⁾		8		—		—			8

Total	$	1,404	$	548	$	(7	) ⁽³⁾	$	1,945

(1)	Included in AOCI and the nuclear decommissioning trust regulatory liability.

(2)	Includes pending sales of securities of $8 million at December 31, 2015. There were no pending sales of securities at March 31, 2016.

(3)	The fair value of securities in an unrealized loss position was $91 million and $281 million at March 31, 2016 and December 31, 2015, respectively.

The fair value of Virginia Power’s marketable debt securities held in nuclear decommissioning trust funds at March 31, 2016 by contractual maturity is as follows:


	Amount
(millions)
Due in one year or less	$	74
Due after one year through five years		191
Due after five years through ten years		196
Due after ten years		270

Total	$	731

Presented below is selected information regarding Virginia Power’s marketable equity and debt securities held in nuclear decommissioning trust funds.


	Three Months Ended March 31,
	2016		2015
(millions)
Proceeds from sales	$	193	$	133
Realized gains ⁽¹⁾		12		18
Realized losses ⁽¹⁾		10		11

(1)	Includes realized gains and losses recorded to the nuclear decommissioning trust regulatory liability.

Other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds for Virginia Power were not material for the three months ended March 31, 2016 and 2015.

Equity Method Investments

Dominion Gas

Iroquois

Dominion Gas’ equity earnings totaled $6 million and $8 million for the three months ended March 31, 2016 and 2015, respectively. Dominion Gas received distributions from this investment of $6 million and $12 million for the three months ended March 31, 2016 and 2015, respectively. At both March 31, 2016 and December 31, 2015, the carrying amount of Dominion Gas’ investment of $102 million exceeded its share of underlying equity in net assets by $8 million. The difference reflects equity method goodwill and is not being amortized. In May 2016, Dominion Gas sold 0.65% of the non-controlling partnership interest in Iroquois to TransCanada for approximately $7 million, which resulted in a $5 million ($3 million after-tax) gain.

Note 11. Regulatory Assets and Liabilities

Regulatory assets and liabilities include the following:


	March 31, 2016		December 31, 2015
(millions)
Dominion
Regulatory assets:
Deferred rate adjustment clause costs ⁽¹⁾	$	109	$	90
Deferred cost of fuel used in electric generation ⁽²⁾		103		111
Deferred nuclear refueling outage costs ⁽³⁾		77		75
Other		62		75

Regulatory assets-current ⁽⁴⁾		351		351

Unrecognized pension and other postretirement benefit costs ⁽⁵⁾		1,004		1,015
Deferred rate adjustment clause costs ⁽¹⁾		255		295
Derivatives ⁽⁶⁾		245		110
PJM transmission rates ⁽⁷⁾		192		192
Income taxes recoverable through future rates ⁽⁸⁾		132		126
Other		149		127

Regulatory assets-non-current		1,977		1,865

Total regulatory assets	$	2,328	$	2,216


	March 31, 2016		December 31, 2015
(millions)
Regulatory liabilities:
PIPP ⁽⁹⁾	$	30	$	46
Other		45		54

Regulatory liabilities-current ⁽¹⁰⁾		75		100

Provision for future cost of removal and AROs ⁽¹¹⁾		1,132		1,120
Nuclear decommissioning trust ⁽¹²⁾		822		804
Deferred cost of fuel used in electric generation ⁽²⁾		129		97
Derivatives ⁽⁶⁾		94		79
Other		177		185

Regulatory liabilities-non-current		2,354		2,285

Total regulatory liabilities	$	2,429	$	2,385

Virginia Power
Regulatory assets:
Deferred rate adjustment clause costs ⁽¹⁾	$	106	$	80
Deferred cost of fuel used in electric generation ⁽²⁾		103		111
Deferred nuclear refueling outage costs ⁽³⁾		77		75
Other		57		60

Regulatory assets-current		343		326

Derivatives ⁽⁶⁾		245		110
PJM transmission rates ⁽⁷⁾		192		192
Deferred rate adjustment clause costs ⁽¹⁾		170		213
Income taxes recoverable through future rates ⁽⁸⁾		102		97
Other		66		55

Regulatory assets-non-current		775		667

Total regulatory assets	$	1,118	$	993

Regulatory liabilities:
Other	$	19	$	35

Regulatory liabilities-current ⁽¹⁰⁾		19		35

Provision for future cost of removal ⁽¹¹⁾		899		890
Nuclear decommissioning trust ⁽¹²⁾		822		804
Deferred cost of fuel used in electric generation ⁽²⁾		129		97
Derivatives ⁽⁶⁾		94		79
Other		52		59

Regulatory liabilities-non-current		1,996		1,929

Total regulatory liabilities	$	2,015	$	1,964

Dominion Gas
Regulatory assets:
Deferred rate adjustment clause costs ⁽¹⁾	$	3	$	10
Other		2		13

Regulatory assets-current ⁽⁴⁾		5		23

Unrecognized pension and other postretirement benefit costs ⁽⁵⁾		280		282
Deferred rate adjustment clause costs ⁽¹⁾		85		82
Income taxes recoverable through future rates ⁽⁸⁾		20		20
Other		75		65

Regulatory assets-non-current ⁽¹³⁾		460		449

Total regulatory assets	$	465	$	472


	March 31, 2016		December 31, 2015
(millions)
Regulatory liabilities:
PIPP ⁽⁹⁾	$	30	$	46
Other		19		9

Regulatory liabilities-current ⁽¹⁰⁾		49		55

Provision for future cost of removal and AROs ⁽¹¹⁾		172		170
Other		35		31

Regulatory liabilities-non-current ⁽¹⁴⁾		207		201

Total regulatory liabilities	$	256	$	256

(1)

Reflects deferrals under the electric transmission FERC formula rate and the deferral of costs associated with certain current and prospective rider projects for Virginia Power. Reflects deferrals of costs associated with certain current and prospective rider projects for Dominion Gas. See Note 12 for more information.

(2)	Primarily reflects deferred fuel expenses for the Virginia jurisdiction of Dominion’s and Virginia Power’s generation operations. See Note 12 for more information.

(3)	Legislation enacted in Virginia in April 2014 requires Virginia Power to defer operation and maintenance costs incurred in connection with the refueling of any nuclear-powered generating plant. These deferred costs will be amortized over the refueling cycle, not to exceed 18 months.

(4)	Current regulatory assets are presented in other current assets in Dominion’s and Dominion Gas’ Consolidated Balance Sheets.

(5)	Represents unrecognized pension and other postretirement employee benefit costs expected to be recovered through future rates generally over the expected remaining service period of plan participants by certain of Dominion’s and Dominion Gas’ rate-regulated subsidiaries.

(6)	For jurisdictions subject to cost-based rate regulation, changes in the fair value of derivative instruments result in the recognition of regulatory assets or regulatory liabilities as they are expected to be recovered from or refunded to customers.

(7)	Reflects amounts related to PJM transmission cost allocation matter. See Note 12 for more information.

(8)

Amounts to be recovered through future rates to pay income taxes that become payable when rate revenue is provided to recover AFUDC-equity and depreciation of property, plant and equipment for which deferred income taxes were not recognized for ratemaking purposes, including amounts attributable to tax rate changes.

(9)	Under PIPP, eligible customers can make reduced payments based on their ability to pay. The difference between the customer’s total bill and the PIPP plan amount is deferred and collected or returned annually under the PIPP rate adjustment clause according to East Ohio tariff provisions.

(10)	Current regulatory liabilities are presented in other current liabilities in the Companies’ Consolidated Balance Sheets.

(11)	Rates charged to customers by the Companies’ regulated businesses include a provision for the cost of future activities to remove assets that are expected to be incurred at the time of retirement.

(12)

Primarily reflects a regulatory liability representing amounts collected from Virginia jurisdictional customers and placed in external trusts (including income, losses and changes in fair value thereon) for the future decommissioning of Virginia Power’s utility nuclear generation stations, in excess of the related AROs.

(13)	Noncurrent regulatory assets are presented in other deferred charges and other assets in Dominion Gas’ Consolidated Balance Sheets.

(14)	Noncurrent regulatory liabilities are presented in other deferred credits and other liabilities in Dominion Gas’ Consolidated Balance Sheets.

At March 31, 2016, $289 million of Dominion’s, $269 million of Virginia Power’s and $18 million of Dominion Gas’ regulatory assets represented past expenditures on which they do not currently earn a return. These expenditures are expected to be recovered within the next two years.

Note 12. Regulatory Matters

Regulatory Matters Involving Potential Loss Contingencies

As a result of issues generated in the ordinary course of business, the Companies are involved in various regulatory matters. Certain regulatory matters may ultimately result in a loss; however, as such matters are in an initial procedural phase, involve uncertainty as to the outcome of pending reviews or orders, and/or involve significant factual issues that need to be resolved, it is not possible for the Companies to estimate a range of possible loss. For matters for which the Companies cannot estimate a range of possible loss, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the regulatory process such that the Companies are able to estimate a range of possible loss. For regulatory matters for which the Companies are able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any estimated range is based on currently available information, involves elements of judgment and significant uncertainties and may not represent the Companies’ maximum possible loss exposure. The circumstances of such regulatory matters will change from time to time and actual results may vary significantly from the current estimate. For current matters not specifically reported below, management does not anticipate that the outcome from such matters would have a material effect on the Companies’ financial position, liquidity or results of operations.

FERC - Electric

Under the Federal Power Act, FERC regulates wholesale sales and transmission of electricity in interstate commerce by public utilities. Dominion’s merchant generators sell electricity in the PJM, MISO, CAISO and ISO-NE wholesale markets, and to wholesale purchasers in the states of Tennessee, Georgia, California and Utah under Dominion’s market-based sales tariffs authorized by FERC. Virginia Power purchases and, under its FERC market-based rate authority, sells electricity in the wholesale market. In addition, Virginia Power has FERC approval of a tariff to sell wholesale power at capped rates based on its embedded cost of generation. This cost-based sales tariff could be used to sell to loads within or outside Virginia Power’s service territory. Any such sales would be voluntary.

Rates

In April 2008, FERC granted an application for Virginia Power’s electric transmission operations to establish a forward-looking formula rate mechanism that updates transmission rates on an annual basis and approved an ROE of 11.4%, effective as of January 1, 2008. The formula rate is designed to recover the expected revenue requirement for each calendar year and is updated based on actual costs. The FERC-approved formula method, which is based on projected costs, allows Virginia Power to earn a current return on its growing investment in electric transmission infrastructure.

In March 2010, Old Dominion Electric Cooperative and North Carolina Electric Membership Corporation filed a complaint with FERC against Virginia Power claiming that $223 million in transmission costs related to specific projects were unjust, unreasonable and unduly discriminatory or preferential and should be excluded from Virginia Power’s transmission formula rate. In October 2010, FERC issued an order dismissing the complaint in part and established hearings and settlement procedures on the remaining part of the complaint. In February 2012, Virginia Power submitted to FERC a settlement agreement to resolve all issues set for hearing. The settlement was accepted by FERC in May 2012 and provides for payment by Virginia Power to the transmission customer parties collectively of $250,000 per year for ten years and resolves all matters other than allocation of the incremental cost of certain underground transmission facilities.

In March 2014, FERC issued an order excluding from Virginia Power’s transmission rates for wholesale transmission customers located outside Virginia the incremental costs of undergrounding certain transmission line projects. FERC found it is not just and reasonable for non-Virginia wholesale transmission customers to be allocated the incremental costs of undergrounding the facilities because the projects are a direct result of Virginia legislation and Virginia Commission pilot programs intended to benefit the citizens of Virginia. The order is retroactively effective as of March 2010 and will cause the reallocation of the costs charged to wholesale transmission customers with loads outside Virginia to wholesale transmission customers with loads in Virginia. FERC determined that there was not sufficient evidence on the record to determine the magnitude of the underground increment and held a hearing to determine the appropriate amount of undergrounding cost to be allocated to each wholesale transmission customer in Virginia. While Virginia Power cannot predict the outcome of the hearing, it is not expected to have a material effect on results of operations.

PJM Transmission Rates

In April 2007, FERC issued an order regarding its transmission rate design for the allocation of costs among PJM transmission customers, including Virginia Power, for transmission service provided by PJM. For new PJM-planned transmission facilities that operate at or above 500 kV, FERC established a PJM regional rate design where customers pay according to each customer’s share of the region’s load. For recovery of costs of existing facilities, FERC approved the existing methodology whereby a customer pays the cost of facilities located in the same zone as the customer. A number of parties appealed the order to the U.S. Court of Appeals for the Seventh Circuit.

In August 2009, the court issued its decision affirming the FERC order with regard to the existing facilities, but remanded to FERC the issue of the cost allocation associated with the new facilities 500 kV and above for further consideration by FERC. On remand, FERC reaffirmed its earlier decision to allocate the costs of new facilities 500 kV and above according to the customer’s share of the region’s load. A number of parties filed appeals of the order to the U.S. Court of Appeals for the Seventh Circuit. In June 2014, the court again remanded the cost allocation issue to FERC. In December 2014, FERC issued an order setting an evidentiary hearing and settlement proceeding regarding the cost allocation issue. The hearing only concerns the costs of new facilities approved by PJM prior to February 1, 2013. Transmission facilities approved after February 1, 2013 are allocated on a hybrid cost allocation method approved by FERC and not subject to any court review.

Virginia Power expects that a settlement agreement will be executed regarding this matter. Under the terms of the settlement, Virginia Power would be required to pay $200 million to PJM over the next 10 years. Although no FERC order has been issued and the expected settlement agreement has not been filed and accepted by FERC, Virginia Power believes it is probable it will be required to make payment as an outcome of the hearing and settlement proceedings. Accordingly, as of March 31, 2016, Virginia Power has recorded a contingent liability of $200 million in other deferred credits and other liabilities, which is offset by a $192 million regulatory asset for the amount that will be recovered through retail rates in Virginia.

Other Regulatory Matters

Other than the following matters, there have been no significant developments regarding the pending regulatory matters disclosed in Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015.

Regulation Act Legislation

In February 2015, the Virginia Governor signed legislation into law which will keep Virginia Power’s base rates unchanged until at least December 1, 2022. In addition, no biennial reviews will be conducted by the Virginia Commission for the five successive 12-month test periods beginning January 1, 2015, and ending December 31, 2019. The legislation states that Virginia Power’s 2015 biennial review, filed in March 2015, would proceed for the sole purpose of reviewing and determining whether any refunds are due to customers based on earnings performance for generation and distribution services during the 2013 and 2014 test periods. In addition the legislation requires the Virginia Commission to conduct proceedings in 2017 and 2019 to determine the utility’s ROE for use in connection with rate adjustment clauses and requires utilities to file integrated resource plans annually rather than biennially. In November 2015, the Virginia Commission ordered testimony, briefs and a separate bifurcated hearing in Virginia Power’s then-pending Rider B, R, S, and W cases on whether the Virginia Commission can adjust the ROE applicable to these rate adjustment clauses prior to 2017. In February 2016, the Virginia Commission issued final orders in these cases, stating that it could adjust the ROE and setting a base ROE of 9.6% for the projects, which results in a 10.6% ROE for Riders R, S and W and a 11.6% ROE for Rider B, effective April 1, 2016. In April 2016, the Virginia Commission issued a final order setting a 9.6% ROE for Riders C1A and C2A, effective May 1, 2016.

2015 Biennial Review

Pursuant to the Regulation Act, in March 2015, Virginia Power filed its base rate case and schedules for the Virginia Commission’s 2015 biennial review of Virginia Power’s rates, terms and conditions. Per legislation enacted in February 2015, this biennial review was limited to reviewing Virginia Power’s earnings on rates for generation and distribution services for the combined 2013 and 2014 test period, and determining whether credits are due to customers in the event Virginia Power’s earnings exceeded the earnings band determined in the 2013 Biennial Review Order. In November 2015, the Virginia Commission issued the 2015 Biennial Review Order. In December 2015, a group of large industrial customers filed notices of appeal with the Supreme Court of Virginia from both the 2015 Biennial Review Order and the Virginia Commission’s order denying their petition for rehearing or reconsideration. In April 2016, the Supreme Court of Virginia granted these appeals as a matter of right. In April 2016, the Attorney General filed an unopposed motion to suspend appellate briefing pending the outcome of a separate case at the Virginia Commission raising the same issues. These appeals are pending.

Virginia Fuel Expenses

In May 2016, Virginia Power submitted its annual fuel factor to the Virginia Commission to recover an estimated $1.4 billion in Virginia jurisdictional projected fuel expenses for the rate year beginning July 1, 2016. Virginia Power’s proposed fuel rate represents a fuel revenue decrease of $286 million when applied to projected kilowatt-hour sales for the period July 1, 2016 to June 30, 2017. This case is pending.

Solar Facility Project

In January 2015, Virginia Power applied for a CPCN to construct and operate a 20 MW utility-scale solar facility near its existing Remington power station in Fauquier County, Virginia. The total estimated cost of the Remington solar facility was approximately $47 million, excluding financing costs. Virginia Power also applied for approval of Rider US-1 to recover the projected costs of the facility. In October 2015, the Virginia Commission denied approval of the CPCN and Rider US-1 based on the evidence in the record but stated that an application could be re-filed to address the concerns cited by the Virginia Commission. In May 2016, Virginia Power filed an application with the Virginia Commission for a CPCN to construct and operate the Remington solar facility and related distribution interconnection facilities. The facility is the subject of a public-private partnership whereby the Commonwealth of Virginia, a non-jurisdictional customer, will compensate Virginia Power for the facility’s net electrical energy output, and Microsoft will purchase all environmental attributes (including renewable energy certificates) generated by the facility. There is not a rate adjustment clause associated with this CPCN filing, nor will any costs of the project be recovered from jurisdictional customers. This case is pending.

Rate Adjustment Clauses

Below is a discussion of significant riders associated with various Virginia Power projects:

•

The Virginia Commission previously approved Rider S in conjunction with the Virginia City Hybrid Energy Center. In February 2016, the Virginia Commission approved a $251 million revenue requirement, subject to true-up, for the rate year beginning April 1, 2016. It also established a 10.6% ROE for Rider S effective April 1, 2016.

•

The Virginia Commission previously approved Rider R in conjunction with Bear Garden. In February 2016, the Virginia Commission approved a $74 million revenue requirement, subject to true-up, for the rate year beginning April 1, 2016. It also established a 10.6% ROE for Rider R effective April 1, 2016.

•

The Virginia Commission previously approved Rider W in conjunction with Warren County. In February 2016, the Virginia Commission approved a $118 million revenue requirement, subject to true-up, for the rate year beginning April 1, 2016. It also established a 10.6% ROE for Rider W effective April 1, 2016.

•

The Virginia Commission previously approved Rider B in conjunction with the conversion of three power stations to biomass. In February 2016, the Virginia Commission approved a $30 million revenue requirement for the rate year beginning April 1, 2016. It also established an 11.6% ROE for Rider B effective April 1, 2016.

•

In July 2015, Virginia Power filed an application with the Virginia Commission for a CPCN to construct and operate Greensville County and related transmission interconnection facilities. Virginia Power also applied for approval of Rider GV to recover the costs of Greensville County. In March 2016, the Virginia Commission granted the requested CPCN and approved a $40 million revenue requirement for the rate year beginning April 1, 2016. It also established a 9.6% ROE for Rider GV effective April 1, 2016.

•

The Virginia Commission previously approved Riders C1A and C2A in connection with cost recovery for demand-side management programs. In April 2016, the Virginia Commission approved a $46 million revenue requirement, subject to true-up, for the rate year beginning May 1, 2016. The Virginia Commission approved one new energy efficiency program at a reduced cost cap, denied a second energy efficiency program, and approved the extension of an existing peak shaving program recovered in base rates at no additional incremental cost.

•

The Virginia Commission previously approved Rider T1 concerning transmission rates. In May 2016, Virginia Power proposed a $639 million total revenue requirement for the rate year beginning September 1, 2016, which represents a $29 million decrease over the previous year. This case is pending.

North Anna

Virginia Power is considering the construction of a third nuclear unit at a site located at North Anna nuclear power station. If Virginia Power decides to build a new unit, it must first receive a COL from the NRC, approval of the Virginia Commission and certain environmental permits and other approvals. The COL is expected in 2017. Virginia Power has not yet committed to building a new nuclear unit at North Anna nuclear power station.

The motions and petitions filed by BREDL prior to April 2015 have been dismissed, and under a previous ruling of the NRC, the contested portion of the COL proceeding remains terminated. The NRC is required to conduct a hearing in all COL proceedings, and if a new contention is not admitted, the mandatory NRC hearing will be uncontested.

In April 2015, BREDL filed a new motion and petition seeking to object to the NRC’s reliance on the continued storage rule in licensing proceedings. The BREDL filings are substantially the same as those filed in other COL proceedings in which final environmental impact statements were issued prior to promulgation of the continued storage rule, like North Anna 3. In June 2015, the NRC denied the April 2015 motion and petition.

In August 2015, BREDL filed a petition in the U.S. Court of Appeals for the D.C. Circuit seeking review of the NRC’s June 2015 decision. Along with the petition for judicial review, BREDL also filed a motion to hold this judicial review in abeyance pending the outcome of the ongoing judicial review of the NRC’s rule pertaining to the continued onsite storage of spent nuclear fuel in litigation pending before the same court. Similar petitions were filed seeking judicial review of the NRC’s decision as it applies to other COL and license renewal proceedings. In March 2016, the court granted Virginia Power’s motion to intervene in the proceeding. This case is pending.

North Carolina Regulation

North Carolina Base Rate Case

In March 2016, Virginia Power filed its base rate case and schedules with the North Carolina Commission. Virginia Power proposed a non-fuel, base rate increase of $51 million effective November 1, 2016 on a temporary basis subject to refund, with any permanent rates ordered by the North Carolina Commission effective January 1, 2017. This base rate increase was proposed to recover the significant investments in generation, transmission, and distribution infrastructure for the benefit of North Carolina customers. Virginia Power also proposed an accelerated implementation of a new lower fuel rate, to be filed in August 2016, as part of the temporary rate effective November 1, 2016 subject to refund, along with a new Rider EDIT to return certain excess accumulated deferred income taxes to its North Carolina customers over a two-year period. Virginia Power presented an earned return of 5.06%, based upon a fully-adjusted test period, compared to its authorized 10.2% return, and proposed a 10.5% ROE going forward within the 10.25% to 10.75% range of its current cost of equity. This case is pending.

Ohio Regulation

PIR Program

In 2008, East Ohio began PIR, aimed at replacing approximately 25% of its pipeline system. In February 2016, East Ohio filed an application to adjust the PIR cost recovery for 2015 costs. The filing reflects gross plant investment for 2015 of $171 million, cumulative gross plant investment of $1 billion and a revenue requirement of $131 million. This application was approved by the Ohio Commission in April 2016.

AMR Program

In 2007, East Ohio began installing automated meter reading technology for its 1.2 million customers in Ohio. In February 2016, East Ohio filed an application to adjust the AMR cost recovery for costs incurred during the calendar year 2015. The filing reflects a revenue requirement of approximately $7 million. This application was approved by the Ohio Commission in April 2016.

FERC - Gas

In 2013, DTI executed binding precedent agreements with several local distribution company customers for the New Market project. The project is expected to cost approximately $159 million and provide 112,000 Dths per day of firm transportation service from Leidy, Pennsylvania to interconnects with Iroquois and Niagara Mohawk Power Corporation’s distribution system in the Albany, New York market. In April 2016, DTI received FERC authorization to construct, operate and maintain the project facilities, which are expected to be placed into service in the fourth quarter of 2016.

In 2014, DCG executed three binding precedent agreements for the approximately $120 million Transco to Charleston project, which will provide 80,000 Dths per day of firm transportation service from an existing interconnect with Transcontinental Gas Pipe Line Company, LLC in Spartanburg County, South Carolina to customers in Dillon, Marlboro, Sumter, Charleston, Lexington and Richland counties, South Carolina. In March 2016, DCG filed an application to request FERC authorization to construct and operate the project facilities, which are expected to be placed into service in the fourth quarter of 2017.

In April 2016, FERC issued an order authorizing DTI to abandon by sale its gathering and processing facilities to Dominion Gathering and Processing, Inc., a newly-formed wholly-owned subsidiary of Dominion Gas. These gathering and processing facilities, with a carrying value of approximately $430 million, are expected to be transferred in the second half of 2016.

Note 13. Variable Interest Entities

The primary beneficiary of a VIE is required to consolidate the VIE and to disclose certain information about its significant variable interests in the VIE. The primary beneficiary of a VIE is the entity that has both 1) the power to direct the activities that most significantly impact the entity’s economic performance and 2) the obligation to absorb losses or receive benefits from the entity that could potentially be significant to the VIE.

Dominion

Dominion owns the general partner interest and 64.6% of the limited partnership interests in Dominion Midstream, which owns a preferred equity interest and the general partner interest in Cove Point. Additionally, Dominion owns the manager and 67% of the membership interest in certain merchant solar facilities, as discussed in Note 2. Dominion has concluded that these entities are VIEs due to the limited partners or members lacking the characteristics of a controlling financial interest. Dominion is the primary beneficiary of Dominion Midstream and the merchant solar facilities, and Dominion Midstream is the primary beneficiary of Cove Point, as they have the power to direct the activities that most significantly impact their economic performance as well as the obligation to absorb losses and benefits which could be significant to them.

Dominion has an initial 45% membership interest in Atlantic Coast Pipeline. See Note 9 to the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015 for more details regarding the nature of this entity. Dominion concluded that Atlantic Coast Pipeline is a VIE because it has insufficient equity to finance its activities without additional subordinated financial support. Dominion has concluded that it is not the primary beneficiary of Atlantic Coast Pipeline as it does not have the power to direct the activities of Atlantic Coast Pipeline that most significantly impact its economic performance, as the power to direct is shared among multiple unrelated parties. Dominion is obligated to provide capital contributions based on its ownership percentage. Dominion’s maximum exposure to loss is limited to its current and future investment.

Dominion and Virginia Power

Dominion and Virginia Power’s nuclear decommissioning trust funds and Dominion’s rabbi trusts hold investments in limited partnerships or similar type entities (see Note 10 for further details). Dominion and Virginia Power concluded that these

partnership investments are VIEs due to the limited partners lacking the characteristics of a controlling financial interest. Dominion and Virginia Power have concluded neither is the primary beneficiary as they do not have the power to direct the activities that most significantly impact these VIEs’ economic performance. Dominion and Virginia Power are obligated to provide capital contributions to the partnerships as required by each partnership agreement based on their ownership percentages. Dominion and Virginia Power’s maximum exposure to loss is limited to their current and future investments.

Dominion and Dominion Gas

Dominion previously concluded that Iroquois was a VIE because a non-affiliated Iroquois equity holder had the ability during a limited period of time to transfer its ownership interests to another Iroquois equity holder or its affiliate. As such right no longer exists at March 31, 2016, Dominion concluded that Iroquois is no longer a VIE.

Virginia Power

Virginia Power had long-term power and capacity contracts with five non-utility generators; however, contracts with two of these generators expired in 2015, leaving three non-utility generators with an aggregate summer generation capacity of approximately 418 MW. These contracts contain certain variable pricing mechanisms in the form of partial fuel reimbursement that Virginia Power considers to be variable interests. After an evaluation of the information provided by these entities, Virginia Power was unable to determine whether they were VIEs. However, the information they provided, as well as Virginia Power’s knowledge of generation facilities in Virginia, enabled Virginia Power to conclude that, if they were VIEs, it would not be the primary beneficiary. This conclusion reflects Virginia Power’s determination that its variable interests do not convey the power to direct the most significant activities that impact the economic performance of the entities during the remaining terms of Virginia Power’s contracts and for the years the entities are expected to operate after its contractual relationships expire. The contracts expire at various dates ranging from 2017 to 2021. Virginia Power is not subject to any risk of loss from these potential VIEs other than its remaining purchase commitments which totaled $394 million as of March 31, 2016. Virginia Power paid $37 million and $53 million for electric capacity and $7 million and $37 million for electric energy to these entities in the three months ended March 31, 2016 and 2015, respectively.

Dominion Gas

DTI has been engaged to oversee the construction of, and to subsequently operate and maintain, the projects undertaken by Atlantic Coast Pipeline based on the overall direction and oversight of Atlantic Coast Pipeline’s members. An affiliate of DTI holds a membership interest in Atlantic Coast Pipeline, therefore DTI is considered to have a variable interest in Atlantic Coast Pipeline. The members of Atlantic Coast Pipeline hold the power to direct the construction, operations and maintenance activities of the entity. DTI has concluded it is not the primary beneficiary of Atlantic Coast Pipeline as it does not have the power to direct the activities of Atlantic Coast Pipeline that most significantly impact its economic performance. DTI has no obligation to absorb any losses of the VIE. See Note 17 for information about associated related party receivable balances.

Virginia Power and Dominion Gas

Virginia Power and Dominion Gas purchased shared services from DRS, an affiliated VIE, of $114 million and $35 million for the three months ended March 31, 2016 and $83 million and $28 million for the three months ended March 31, 2015, respectively. Virginia Power and Dominion Gas determined that neither is the primary beneficiary of DRS as neither has both the power to direct the activities that most significantly impact its economic performance as well as the obligation to absorb losses and benefits which could be significant to it. DRS provides accounting, legal, finance and certain administrative and technical services to all Dominion subsidiaries, including Virginia Power and Dominion Gas. Virginia Power and Dominion Gas have no obligation to absorb more than their allocated shares of DRS costs.

Note 14. Significant Financing Transactions

Credit Facilities and Short-term Debt

The Companies use short-term debt to fund working capital requirements and as a bridge to long-term debt financings. The levels of borrowing may vary significantly during the course of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations. In addition, Dominion utilizes cash and letters of credit to fund collateral requirements. Collateral requirements are impacted by commodity prices, hedging levels, Dominion’s credit ratings and the credit quality of its counterparties.

Dominion

At March 31, 2016, Dominion’s commercial paper and letters of credit outstanding, as well as its capacity available under credit facilities, were as follows:


	Facility Limit		Outstanding Commercial Paper		Outstanding Letters of Credit		Facility Capacity Available
(millions)
Joint revolving credit facility ⁽¹⁾	$	5,000	$	3,028	$	—	$	1,972
Joint revolving credit facility ⁽¹⁾		500		—		57		443

Total	$	5,500	$	3,028	$	57	$	2,415

(1)	These credit facilities mature in April 2019, and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to a combined $2.0 billion of letters of credit.

Virginia Power

Virginia Power’s short-term financing is supported through its access as co-borrower to the two joint revolving credit facilities. These credit facilities can be used for working capital, as support for the combined commercial paper programs of the Companies and for other general corporate purposes.

At March 31, 2016, Virginia Power’s share of commercial paper and letters of credit outstanding under its joint credit facilities with Dominion and Dominion Gas, were as follows:

Facility
Limit ⁽¹⁾

Outstanding
Commercial
Paper

Outstanding
Letters of
Credit

(millions)

Joint revolving credit facility ⁽¹⁾

5,000

1,276

—

Joint revolving credit facility ⁽¹⁾

500

—

Total

5,500

1,276

—

(1)

The full amount of the facilities is available to Virginia Power, less any amounts outstanding to co-borrowers Dominion and Dominion Gas. Sub-limits for Virginia Power are set within the facility limit but can be changed at the option of the Companies multiple times per year. In March 2016, the aggregate sub-limit for Virginia Power was increased from $1.75 billion to $2.0 billion. If Virginia Power has liquidity needs in excess of its sub-limit, the sub-limit may be changed or such needs may be satisfied through short-term intercompany borrowings from Dominion. These credit facilities mature in April 2019, and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $2.0 billion (or the sub-limit, whichever is less) of letters of credit.

In addition to the credit facility commitments mentioned above, Virginia Power also has a $120 million credit facility with a maturity date of April 2019. As of March 31, 2016, this facility supports $119 million of certain variable rate tax-exempt financings of Virginia Power.

Dominion Gas

Dominion Gas’ short-term financing is supported by its access as co-borrower to the two joint revolving credit facilities. These credit facilities can be used for working capital, as support for the combined commercial paper programs of the Companies and for other general corporate purposes.

At March 31, 2016, Dominion Gas’ share of commercial paper and letters of credit outstanding under its joint credit facilities with Dominion and Virginia Power were as follows:

Facility
Limit ⁽¹⁾

Outstanding
Commercial
Paper

Outstanding
Letters of
Credit

(millions)

Joint revolving credit facility ⁽¹⁾

1,000

403

—

Joint revolving credit facility ⁽¹⁾

500

—

Total

1,500

403

—

(1)

A maximum of a combined $1.5 billion of the facilities is available to Dominion Gas, assuming adequate capacity is available after giving effect to uses by co-borrowers Dominion and Virginia Power. Sub-limits for Dominion Gas are set within the facility limit but can be changed at the option of the Companies multiple times per year. At March 31, 2016, the aggregate sub-limit for Dominion Gas was $1.0 billion. If Dominion Gas has liquidity needs in excess of its sub-limit, the sub-limit may be changed or such needs may be satisfied through short-term intercompany borrowings from Dominion. These credit facilities mature in April 2019, and can be used to support bank borrowings and the issuance of commercial paper, as well as to support up to $1.5 billion (or the sub-limit, whichever is less) of letters of credit.

Remarketable Subordinated Notes

In March 2016, Dominion successfully remarketed the $550 million 2013 Series A 1.07% RSNs due 2021 pursuant to the terms of the 2013 Equity Units. In connection with the remarketing, the interest rate on the Series A junior subordinated notes was reset to 4.104%, payable on a semi-annual basis and Dominion ceased to have the ability to redeem the notes at its option or defer interest payments. At March 31, 2016, these securities are included in junior subordinated notes in Dominion’s Consolidated Balance Sheets. Dominion did not receive any proceeds from the remarketing. Remarketing proceeds belonged to the investors holding the related 2013 Equity Units and were temporarily used to purchase a portfolio of treasury securities. Upon maturity of the portfolio, the proceeds were applied on behalf of investors on the related stock purchase contract settlement date of April 1, 2016 to pay the purchase price to Dominion for issuance of 8.5 million shares of its common stock. See Issuance of Common Stock below for a description of common stock issued by Dominion in April 2016 under the stock purchase contract.

Enhanced Junior Subordinated Notes

In the first quarter of 2016, Dominion purchased and cancelled $38 million and $4 million of the June 2006 hybrids and the September 2006 hybrids, respectively. The purchases were conducted in compliance with the applicable replacement capital covenants.

Issuance of Common Stock

Dominion maintains Dominion Direct ^® and a number of employee savings plans through which contributions may be invested in Dominion’s common stock. These shares may either be newly issued or purchased on the open market with proceeds contributed to these plans.

In December 2014, Dominion filed an SEC shelf registration for the sale of debt and equity securities including the ability to sell common stock through an at-the-market program. Also in December 2014, Dominion entered into four separate sales agency agreements to effect sales under the program and pursuant to which it may offer from time to time up to $500 million aggregate amount of its common stock. Sales of common stock can be made by means of privately negotiated transactions, as transactions on the New York Stock Exchange at market prices or in such other transactions as are agreed upon by Dominion and the sales agents and in conformance with applicable securities laws. Following issuances during the first and second quarters of 2015, Dominion has the ability to issue up to approximately $200 million of stock under the 2014 sales agency agreements; however, no additional issuances have occurred under these agreements in 2016.

In April 2016, Dominion issued 8.5 million shares under the stock purchase contract entered into as part of Dominion’s 2013 Series A Equity Units. Additionally, Dominion completed a market issuance of equity in April 2016 of 10.2 million shares and receipt of proceeds of $756 million through a registered underwritten public offering. In connection with receipt of these proceeds, the acquisition financing commitments for the Questar Combination were reduced from $3.9 billion to $3.14 billion in April 2016.

Note 15. Commitments and Contingencies

As a result of issues generated in the ordinary course of business, the Companies are involved in legal proceedings before various courts and are periodically subject to governmental examinations (including by regulatory authorities), inquiries and investigations. Certain legal proceedings and governmental examinations involve demands for unspecified amounts of damages, are in an initial procedural phase, involve uncertainty as to the outcome of pending appeals or motions, or involve significant factual issues that need to be resolved, such that it is not possible for the Companies to estimate a range of possible loss. For such matters for which the Companies cannot estimate a range of possible loss, a statement to this effect is made in the description of the matter. Other matters may have progressed sufficiently through the litigation or investigative processes such that the Companies are able to estimate a range of possible loss. For legal proceedings and governmental examinations for which the Companies are able to reasonably estimate a range of possible losses, an estimated range of possible loss is provided, in excess of the accrued liability (if any) for such matters. Any accrued liability is recorded on a gross basis with a receivable also recorded for any probable insurance recoveries. Estimated ranges of loss are inclusive of legal fees and net of any anticipated insurance recoveries. Any estimated range is based on currently available information and involves elements of judgment and significant uncertainties. Any estimated range of possible loss may not represent the Companies’ maximum possible loss exposure. The circumstances of such legal proceedings and governmental examinations will change from time to time and actual results may vary significantly from the current estimate. For current proceedings not specifically reported below, management does not anticipate that the liabilities, if any, arising from such proceedings would have a material effect on the financial position, liquidity or results of operations of the Companies.

Environmental Matters

The Companies are subject to costs resulting from a number of federal, state and local laws and regulations designed to protect human health and the environment. These laws and regulations affect future planning and existing operations. They can result in increased capital, operating and other costs as a result of compliance, remediation, containment and monitoring obligations.

Air

CAA

The CAA, as amended, is a comprehensive program utilizing a broad range of regulatory tools to protect and preserve the nation’s air quality. At a minimum, states are required to establish regulatory programs to address all requirements of the CAA. However, states may choose to develop regulatory programs that are more restrictive. Many of the Companies’ facilities are subject to the CAA’s permitting and other requirements.

MATS

In December 2011, the EPA issued MATS for coal- and oil-fired electric utility steam generating units. The rule establishes strict emission limits for mercury, particulate matter as a surrogate for toxic metals and hydrogen chloride as a surrogate for acid gases. The rule includes a limited use provision for oil-fired units with annual capacity factors under 8% that provides an exemption from emission limits, and allows compliance with operational work practice standards. Compliance was required by April 16, 2015, with certain limited exceptions. However, in June 2014, the VDEQ granted a one-year MATS compliance extension for two coal-fired units at Yorktown to defer planned retirements and allow for continued operation of the units to address reliability concerns while necessary electric transmission upgrades are being completed. These coal units will need to continue operating until at least April 2017 due to delays in transmission upgrades needed to maintain electric reliability, which based on assumptions about the timing for required agency actions and construction schedules are expected to be completed by no earlier than the second quarter of 2017. Therefore, in October 2015, Virginia Power submitted a request to the EPA for an additional one year compliance extension under an EPA Administrative Order. The order was signed by the EPA in April 2016 allowing the Yorktown units to operate for up to one additional year, as required to maintain reliable power availability while transmission upgrades are being made.

In June 2015, the U.S. Supreme Court issued a decision holding that the EPA failed to take cost into account when the agency first decided to regulate the emissions from coal- and oil-fired plants, and remanded the MATS rule back to the U.S. Court of Appeals for the D.C. Circuit. However, the Supreme Court did not vacate or stay the effective date and implementation of the MATS rule. In November 2015, in response to the Supreme Court decision, the EPA proposed a supplemental finding that consideration of cost does not alter the agency’s previous conclusion that it is appropriate and necessary to regulate coal- and oil-fired electric utility steam generating units under Section 112 of the CAA. In December 2015, the D.C. Court of Appeals issued an order remanding the MATS rulemaking proceeding back to the EPA without setting aside judgment, noting that EPA had represented it was on track to issue a final finding regarding its consideration of cost. In April 2016, the EPA issued a final supplemental finding that consideration of costs does not alter its conclusion regarding appropriateness and necessity for the regulation. These actions do not change Virginia Power’s plans to close coal units at Yorktown or the need to complete necessary electricity transmission upgrades by 2017. Since the MATS rule remains in effect and Dominion is complying with the requirements of the rule, Dominion does not expect any adverse impacts to its operations at this time.

CAIR

The EPA established CAIR with the intent to require significant reductions in SO ₂ and NO _X emissions from electric generating facilities. In July 2008, the U.S. Court of Appeals for the D.C. Circuit issued a ruling vacating CAIR. In December 2008, the Court denied rehearing, but also issued a decision to remand CAIR to the EPA. In July 2011, the EPA issued a replacement rule for CAIR, called CSAPR, that required 28 states to reduce power plant emissions that cross state lines. CSAPR established new SO ₂ and NO _X emissions cap and trade programs that were completely independent of the current ARP. Specifically, CSAPR required reductions in SO ₂ and NO _X emissions from fossil fuel-fired electric generating units of 25 MW or more through annual NO _X emissions caps, NO _X emissions caps during the ozone season (May 1 through September 30) and annual SO ₂ emission caps with differing requirements for two groups of affected states.

CSAPR

Following numerous petitions by industry participants for review and a successful motion for stay, in October 2014, the U.S. Court of Appeals for the D.C. Circuit ordered that the EPA’s motion to lift the stay of CSAPR be granted. Further, the Court granted the EPA’s request to shift the CSAPR compliance deadlines by three years, so that Phase 1 emissions budgets (which would have gone into effect in 2012 and 2013) will apply in 2015 and 2016, and Phase 2 emissions budgets will apply in 2017 and beyond. CSAPR replaced CAIR beginning in January 2015. The cost to comply is not expected to be material to Dominion’s or Virginia Power’s Consolidated Financial Statements. Future outcomes of any additional litigation and/or any action to issue a revised rule, including the EPA’s recent proposal to reduce the ozone season NO _X emission budgets beginning in 2017, could affect the assessment regarding cost of compliance.

Ozone Standards

In October 2015, the EPA issued a final rule tightening the ozone standard from 75-ppb to 70-ppb. The EPA is expected to complete attainment designations for a new standard by December 2017 and states will have until 2020 or 2021 to develop plans to address the new standard. In April 2016, Dominion submitted the NO _X Reasonable Available Control Technology analysis for Unit 5 at Possum Point power station. Until the states have developed implementation plans, the Companies are unable to predict whether or to what extent the new rules will ultimately require additional controls. However, if significant expenditures are required to implement additional controls, it could adversely affect the Companies’ results of operations and cash flows.

Hazardous Air Pollutants Standards

In August 2010, the EPA issued revised National Emission Standards for Hazardous Air Pollutants for Reciprocating Internal Combustion Engines, which was amended in March 2011 and January 2013. The rule establishes emission standards for control of hazardous air pollutants for engines at smaller facilities, known as area sources. As a result of these regulations, Dominion Gas has spent $2 million to install emissions controls on several compressor engines. Further capital spending is not expected to be material.

NSPS

In August 2012, the EPA issued the first NSPS impacting the natural gas production and gathering sectors and made revisions to the NSPS for natural gas processing and transmission facilities. These rules establish equipment performance specifications and emissions standards for control of VOC emissions for natural gas production wells, tanks, pneumatic controllers, and compressors in the upstream sector. In September 2015, the EPA issued a proposed NSPS to regulate methane and VOC emissions from transmission and storage, gathering and boosting, production and processing facilities. The proposed regulation is expected to be finalized in summer 2016. All projects which commenced construction after September 2015 will be required to comply with this regulation. Dominion and Dominion Gas are evaluating the proposed regulation and cannot currently estimate the potential impacts on results of operations, financial condition and/or cash flows related to this matter.

Methane Emissions

In January 2015, as part of its Climate Action Plan, the EPA announced plans to reduce methane emissions from the oil and gas sector including natural gas processing and transmission sources. In July 2015, the EPA announced the next generation of its voluntary Natural Gas STAR program, the Natural Gas STAR Methane Challenge Program. The proposed program covers the entire natural gas sector from production to distribution, with more emphasis on transparency and increased reporting for both annual emissions and reductions achieved through implementation measures. In March 2016, Dominion joined the EPA as a founding partner in this program for its distribution companies, East Ohio and Hope, and DTI.

In March 2016, President Obama directed the EPA to develop regulations for reducing methane emissions from existing sources in the oil and natural gas sectors. The EPA intends to issue an Information Collection Request to collect information on existing sources in this sector in fall 2016. Depending on the results of this Information Collection Request effort, the EPA may propose new regulations on existing sources. Dominion and Dominion Gas cannot currently estimate the potential impacts on results of operations, financial condition and/or cash flows related to this matter.

NO _x and VOC Emissions

In April 2014, the Pennsylvania Department of Environmental Protection issued proposed regulations to reduce NO _X and VOC emissions from combustion sources. The regulations were finalized in April 2016. To comply with the regulations, Dominion Gas anticipates installing emission control systems on existing engines at several compressor stations in Pennsylvania. The compliance costs associated with engineering and installation of controls and compliance demonstration with the regulation are expected to be approximately $25 million.

Climate Change Legislation and Regulation

In October 2013, the U.S. Supreme Court granted petitions filed by several industry groups, states, and the U.S. Chamber of Commerce seeking review of the U.S. Court of Appeals for the D.C. Circuit’s June 2012 decision upholding the EPA’s regulation of GHG emissions from stationary sources under the CAA’s permitting programs. In June 2014, the U.S. Supreme Court ruled that the EPA lacked the authority under the CAA to require PSD or Title V permits for stationary sources based solely on GHG emissions. However, the Court upheld the EPA’s ability to require BACT for GHG for sources that are otherwise subject to PSD or Title V permitting for conventional pollutants. In July 2014, the EPA issued a memorandum specifying that it will no longer apply or enforce federal regulations or EPA-approved PSD state implementation plan provisions that require new and modified stationary sources to obtain a PSD permit when GHGs are the only pollutant that would be emitted at levels that exceed the permitting thresholds. In August 2015, the EPA published a final rule rescinding the requirement for all new and modified major sources to obtain permits based solely on their GHG emissions. In addition, the

EPA stated that it will continue to use the existing thresholds to apply to sources that are otherwise subject to PSD for conventional pollutants until it completes a new rulemaking either justifying and upholding those thresholds or setting new ones. Some states have issued interim guidance that follows the EPA guidance. Due to uncertainty regarding what additional actions states may take to amend their existing regulations and what action the EPA ultimately takes to address the Court ruling under a new rulemaking, the Companies cannot predict the impact to their financial statements at this time.

In July 2011, the EPA signed a final rule deferring the need for PSD and Title V permitting for CO ₂ emissions for biomass projects. This rule temporarily deferred for a period of up to three years the consideration of CO ₂ emissions from biomass projects when determining whether a stationary source meets the PSD and Title V applicability thresholds, including those for the application of BACT. The deferral policy expired in July 2014. In July 2013, the U.S. Court of Appeals for the D.C. Circuit vacated this rule; however, a mandate making this decision effective has not been issued. Virginia Power converted three coal-fired generating stations, Altavista, Hopewell and Southampton, to biomass during the CO ₂ deferral period. It is unclear how the court’s decision or the EPA’s final policy regarding the treatment of specific feedstock will affect biomass sources that were permitted during the deferral period; however, the expenditures to comply with any new requirements could be material to Dominion’s and Virginia Power’s financial statements.

Water

The CWA, as amended, is a comprehensive program requiring a broad range of regulatory tools including a permit program to authorize and regulate discharges to surface waters with strong enforcement mechanisms. The Companies must comply with applicable aspects of the CWA programs at their operating facilities.

In October 2014, the final regulations under Section 316(b) of the CWA that govern existing facilities and new units at existing facilities that employ a cooling water intake structure and that have flow levels exceeding a minimum threshold became effective. The rule establishes a national standard for impingement based on seven compliance options, but forgoes the creation of a single technology standard for entrainment. Instead, the EPA has delegated entrainment technology decisions to state regulators. State regulators are to make case-by-case entrainment technology determinations after an examination of five mandatory facility-specific factors, including a social cost-benefit test, and six optional facility-specific factors. The rule governs all electric generating stations with water withdrawals above two MGD, with a heightened entrainment analysis for those facilities over 125 MGD. Dominion and Virginia Power have 14 and 11 facilities, respectively, that may be subject to the final regulations. Dominion anticipates that it will have to install impingement control technologies at many of these stations that have once-through cooling systems. Dominion and Virginia Power are currently evaluating the need or potential for entrainment controls under the final rule as these decisions will be made on a case-by-case basis after a thorough review of detailed biological, technology, cost and benefit studies. While the impacts of this rule could be material to Dominion’s and Virginia Power’s results of operations, financial condition and/or cash flows, the existing regulatory framework in Virginia provides rate recovery mechanisms that could substantially mitigate any such impacts for Virginia Power.

In September 2015, the EPA released a final rule to revise the Effluent Limitations Guidelines for the Steam Electric Power Generating Category. The final rule establishes updated standards for wastewater discharges that apply primarily at coal and oil steam generating stations. Affected facilities are required to convert from wet to dry or closed cycle coal ash management, improve existing wastewater treatment systems and/or install new wastewater treatment technologies in order to meet the new discharge limits. Virginia Power has eight facilities that may be subject to additional wastewater treatment requirements associated with the final rule. The expenditures to comply with these new requirements are expected to be material.

Solid and Hazardous Waste

The CERCLA, as amended, provides for immediate response and removal actions coordinated by the EPA in the event of threatened releases of hazardous substances into the environment and authorizes the U.S. government either to clean up sites at which hazardous substances have created actual or potential environmental hazards or to order persons responsible for the situation to do so. Under the CERCLA, as amended, generators and transporters of hazardous substances, as well as past and present owners and operators of contaminated sites, can be jointly, severally and strictly liable for the cost of cleanup. These potentially responsible parties can be ordered to perform a cleanup, be sued for costs associated with an EPA-directed cleanup, voluntarily settle with the U.S. government concerning their liability for cleanup costs, or voluntarily begin a site investigation and site remediation under state oversight.

From time to time, Dominion, Virginia Power, or Dominion Gas may be identified as a potentially responsible party to a Superfund site. The EPA (or a state) can either allow such a party to conduct and pay for a remedial investigation, feasibility study and remedial action or conduct the remedial investigation and action itself and then seek reimbursement from the potentially responsible parties. Each party can be held jointly, severally and strictly liable for the cleanup costs. These parties can also bring contribution actions against each other and seek reimbursement from their insurance companies. As a result,

Dominion, Virginia Power, or Dominion Gas may be responsible for the costs of remedial investigation and actions under the Superfund law or other laws or regulations regarding the remediation of waste. Except as noted below, the Companies do not believe this will have a material effect on results of operations, financial condition and/or cash flows.

In September 2011, the EPA issued a UAO to Virginia Power and 22 other parties, ordering specific remedial action of certain areas at the Ward Transformer Superfund site located in Raleigh, North Carolina. Virginia Power does not believe it is a liable party under CERCLA based on its alleged connection to the site. In November 2011, Virginia Power and a number of other parties notified the EPA that they are declining to undertake the work set forth in the UAO.

The EPA may seek to enforce a UAO in court pursuant to its enforcement authority under CERCLA, and may seek recovery of its costs in undertaking removal or remedial action. If the court determines that a respondent failed to comply with the UAO without sufficient cause, the EPA may also seek civil penalties of up to $37,500 per day for the violation and punitive damages of up to three times the costs incurred by the EPA as a result of the party’s failure to comply with the UAO. Virginia Power is currently unable to make an estimate of the potential financial statement impacts related to the Ward Transformer matter.

Dominion has determined that it is associated with 17 former manufactured gas plant sites, three of which pertain to Virginia Power and 12 of which pertain to Dominion Gas. Studies conducted by other utilities at their former manufactured gas plant sites have indicated that those sites contain coal tar and other potentially harmful materials. None of the former sites with which the Companies are associated is under investigation by any state or federal environmental agency. At one of the former sites, Dominion is conducting a state-approved post closure groundwater monitoring program and an environmental land use restriction has been recorded. Another site has been accepted into a state-based voluntary remediation program. Virginia Power is currently evaluating the nature and extent of the contamination from this site as well as potential remedial options. Preliminary costs for options under evaluation for the site range from $1 million to $22 million. Due to the uncertainty surrounding the other sites, the Companies are unable to make an estimate of the potential financial statement impacts.

See below for discussion on ash pond and landfill closure costs.

Other Legal Matters

The Companies are defendants in a number of lawsuits and claims involving unrelated incidents of property damage and personal injury. Due to the uncertainty surrounding these matters, the Companies are unable to make an estimate of the potential financial statement impacts; however, they could have a material impact on results of operations, financial condition and/or cash flows.

Appalachian Gateway

Following the completion of the Appalachian Gateway project in 2012, DTI received multiple change order requests and other claims for additional payments from a pipeline contractor for the project. In July 2013, DTI filed a complaint in U.S. District Court for the Eastern District of Virginia for breach of contract as well as accounting and declaratory relief. The contractor filed a motion to dismiss, or in the alternative, a motion to transfer venue to Pennsylvania and/or West Virginia, where the pipelines were constructed. DTI filed an opposition to the contractor’s motion in August 2013. In November 2013, the court granted the contractor’s motion on the basis that DTI must first comply with the dispute resolution process. In July 2015, the contractor filed a complaint against DTI in U.S. District Court for the Western District of Pennsylvania. In August 2015, DTI filed a motion to dismiss, or in the alternative, a motion to transfer venue to Virginia. In March 2016, the Pennsylvania court granted the motion to dismiss and transferred the case to the U.S. District Court for the Eastern District of Virginia. In April 2016, the Virginia court issued an order staying the proceedings and ordering mediation. This case is pending. DTI has accrued a liability of $6 million for this matter. Dominion Gas cannot currently estimate additional financial statement impacts, but there could be a material impact to its financial condition and/or cash flows.

Ash Pond and Landfill Closure Costs

In September 2014, Virginia Power received a notice from the Southern Environmental Law Center on behalf of the Potomac Riverkeeper and Sierra Club alleging CWA violations at Possum Point power station. The notice alleges unpermitted discharges to surface water and groundwater from Possum Point power station’s historical and active ash storage facilities. A similar notice from the Southern Environmental Law Center on behalf of the Sierra Club was subsequently received related to Chesapeake power station. In December 2014, Virginia Power offered to close all of its coal ash ponds and landfills at Possum Point, Chesapeake and Bremo power stations as settlement of the potential litigation. While the issue is open to potential further negotiations, the Southern Environmental Law Center declined the offer as presented in January 2015 and, in March 2015, filed a lawsuit related to its claims of the alleged CWA violations at Chesapeake power station. Virginia Power filed a motion to dismiss in April 2015, which was denied in November 2015. A trial is scheduled for June 2016. This case is pending. As a result of the December 2014 settlement offer, Virginia Power recognized a charge of $121 million in other operations and maintenance expense in its Consolidated Statements of Income in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2014.

In April 2015, the EPA’s final rule regulating the management of CCRs stored in impoundments (ash ponds) and landfills was published in the Federal Register. The final rule regulates CCR landfills, existing ash ponds that still receive and manage CCRs, and inactive ash ponds that do not receive, but still store CCRs. Virginia Power currently operates inactive ash ponds, existing ash ponds, and CCR landfills subject to the final rule at eight different facilities. The enactment of the final rule in April 2015 created a legal obligation for Virginia Power to retrofit or close all of its inactive and existing ash ponds over a certain period of time, as well as perform required monitoring, corrective action, and post-closure care activities as necessary. In April 2016, the EPA announced a partial settlement with certain environmental and industry organizations that had challenged the final CCR rule in the U.S. Court of Appeals for the D.C. Circuit. As part of the settlement, certain exemptions included in the final rule for inactive ponds that closed by April 2018 will be removed, resulting in inactive ponds ultimately being subject to the same requirements as existing ponds. Virginia Power does not believe this change will substantially impact its closure plans for inactive ponds.

In 2015, Virginia Power recorded a $386 million ARO related to future ash pond and landfill closure costs. Recognition of the ARO also resulted in a $99 million incremental charge recorded in other operations and maintenance expense in its Consolidated Statement of Income, a $166 million increase in property, plant, and equipment associated with asset retirement costs, and a $121 million reduction in other noncurrent liabilities related to reversal of the contingent liability described above since the ARO obligation created by the final CCR rule represents similar activities. Virginia Power is in the process of obtaining the necessary permits to complete the work. In February and March 2016, respectively, two parties filed administrative appeals in the Circuit Court for the City of Richmond challenging certain provisions, relating to ash pond dewatering activities, of Possum Point power station’s wastewater discharge permit issued by the VDEQ in January 2016. Virginia Power cannot predict the financial impact associated with these appeals, but believes that it will not be material. The actual AROs related to the CCR rule may vary substantially from the estimates used to record the increased obligation in 2015.

Cove Point

Dominion is constructing the Liquefaction Project at the Cove Point facility, which would enable the facility to liquefy domestically-produced natural gas and export it as LNG. In September 2014, FERC issued an order granting authorization for Cove Point to construct, modify and operate the Liquefaction Project. In October 2014, several parties filed a motion with FERC to stay the order and requested rehearing. In May 2015, FERC denied the requests for stay and rehearing.

Two parties have separately filed petitions for review of the FERC order in the U.S. Court of Appeals for the D.C. Circuit, which petitions have been consolidated. Separately, one party requested a stay of the FERC order until the judicial proceedings are complete, which the court denied in June 2015.

Nuclear Matters

In March 2011, a magnitude 9.0 earthquake and subsequent tsunami caused significant damage at the Fukushima Daiichi nuclear power station in northeast Japan. These events have resulted in significant nuclear safety reviews required by the NRC and industry groups such as the Institute of Nuclear Power Operations. Like other U.S. nuclear operators, Dominion has been gathering supporting data and participating in industry initiatives focused on the ability to respond to and mitigate the consequences of design-basis and beyond-design-basis events at its stations.

In July 2011, an NRC task force provided initial recommendations based on its review of the Fukushima Daiichi accident and in October 2011 the NRC staff prioritized these recommendations into Tiers 1, 2 and 3, with the Tier 1 recommendations consisting of actions which the staff determined should be started without unnecessary delay. In December 2011, the NRC Commissioners approved the agency staff’s prioritization and recommendations, and that same month an appropriations act directed the NRC to require reevaluation of external hazards (not limited to seismic and flooding hazards) as soon as possible.

Based on the prioritized recommendations, in March 2012, the NRC issued orders and information requests requiring specific reviews and actions to all operating reactors, construction permit holders and combined license holders based on the lessons learned from the Fukushima Daiichi event. The orders applicable to Dominion requiring implementation of safety enhancements related to mitigation strategies to respond to extreme natural events resulting in the loss of power at plants, and enhancing spent fuel pool instrumentation have been implemented. The information requests issued by the NRC request each reactor to reevaluate the seismic and external flooding hazards at their site using present-day methods and information, conduct walkdowns of their facilities to ensure protection against the hazards in their current design basis, and to reevaluate their emergency communications systems and staffing levels. The walkdowns of each unit have been completed, audited by the NRC and found to be adequate. Reevaluation of the emergency communications systems and staffing levels was completed as part of the effort to comply with the orders. Reevaluation of the seismic and external flooding hazards is expected to continue through

2018. Dominion and Virginia Power do not currently expect that compliance with the NRC’s information requests will materially impact their financial position, results of operations or cash flows during the implementation period. The NRC staff is evaluating the implementation of the longer term Tier 2 and Tier 3 recommendations. Dominion and Virginia Power do not expect material financial impacts related to compliance with Tier 2 and Tier 3 recommendations.

Guarantees, Surety Bonds and Letters of Credit

Dominion

At March 31, 2016, Dominion had issued $73 million of guarantees, primarily to support equity method investees. No significant amounts related to these guarantees have been recorded. As of March 31, 2016, Dominion’s exposure under these guarantees was $38 million, primarily related to certain reserve requirements associated with non-recourse financing.

Dominion also enters into guarantee arrangements on behalf of its consolidated subsidiaries, primarily to facilitate their commercial transactions with third parties. To the extent that a liability subject to a guarantee has been incurred by one of Dominion’s consolidated subsidiaries, that liability is included in the Consolidated Financial Statements. Dominion is not required to recognize liabilities for guarantees issued on behalf of its subsidiaries unless it becomes probable that it will have to perform under the guarantees. Terms of the guarantees typically end once obligations have been paid. Dominion currently believes it is unlikely that it would be required to perform or otherwise incur any losses associated with guarantees of its subsidiaries’ obligations.

At March 31, 2016, Dominion had issued the following subsidiary guarantees:


	Stated Limit		Value ⁽¹⁾
(millions)
Subsidiary debt ⁽²⁾	$	27	$	27
Commodity transactions ⁽³⁾		2,136		887
Nuclear obligations ⁽⁴⁾		189		82
Cove Point ⁽⁵⁾		1,900		—
Solar ⁽⁶⁾		1,565		326
Other ⁽⁷⁾		433		28

Total	$	6,250	$	1,350

(1)

Represents the estimated portion of the guarantee’s stated limit that is utilized as of March 31, 2016 based upon prevailing economic conditions and fact patterns specific to each guarantee arrangement. For those guarantees related to obligations that are recorded as liabilities by Dominion’s subsidiaries, the value includes the recorded amount.

(2)	Guarantee of debt of a DEI subsidiary. In the event of default by the subsidiary, Dominion would be obligated to repay such amounts.

(3)

Guarantees related to commodity commitments of certain subsidiaries, including subsidiaries of Virginia Power, Dominion Gas and DEI. These guarantees were provided to counterparties in order to facilitate physical and financial transactions in gas, oil, electricity, pipeline capacity, transportation and related commodities and services. If any of these subsidiaries fail to perform or pay under the contracts and the counterparties seek performance or payment, Dominion would be obligated to satisfy such obligation. Dominion and its subsidiaries receive similar guarantees as collateral for credit extended to others. The value provided includes certain guarantees that do not have stated limits.

(4)

Guarantees related to certain DEI subsidiaries’ potential retrospective premiums that could be assessed if there is a nuclear incident under Dominion’s nuclear insurance programs and guarantees for a DEI subsidiary’s and Virginia Power’s commitment to buy nuclear fuel. Excludes Dominion’s agreement to provide up to $150 million and $60 million to two DEI subsidiaries to pay the operating expenses of Millstone nuclear power station (in the event of a prolonged outage) and Kewaunee nuclear power station, respectively, as part of satisfying certain NRC requirements concerned with ensuring adequate funding for the operations of nuclear power stations. The agreement for Kewaunee nuclear power station also provides for funds through the completion of decommissioning.

(5)	Guarantees related to Cove Point, in support of terminal services, transportation and construction. Two of the guarantees have no stated limit, one guarantee has a $150 million limit, and one guarantee has a $1.75 billion aggregate limit with an annual draw limit of $175 million.

(6)	Includes guarantees to facilitate the development of solar projects including guarantees that do not have stated limits. Also includes guarantees entered into by DEI on behalf of certain subsidiaries to facilitate the acquisition and development of solar projects.

(7)

Guarantees related to other miscellaneous contractual obligations such as leases, environmental obligations and construction projects. Also includes guarantees related to certain DEI subsidiaries’ obligations for equity capital contributions and energy generation associated with Fowler Ridge and NedPower. As of March 31, 2016, Dominion’s maximum remaining cumulative exposure under these equity funding agreements is $45 million through 2019 and its maximum annual future contributions could range from approximately $4 million to $19 million. The value provided includes certain guarantees that do not have stated limits.

Additionally, at March 31, 2016, Dominion had purchased $94 million of surety bonds, including $34 million at Virginia Power and $23 million at Dominion Gas, and authorized the issuance of letters of credit by financial institutions of $57 million to facilitate commercial transactions by its subsidiaries with third parties. Under the terms of surety bonds, the Companies are obligated to indemnify the respective surety bond company for any amounts paid.

Note 16. Credit Risk

The Companies’ accounting policies for credit risk are discussed in Note 23 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015.

At March 31, 2016, Dominion’s credit exposure related to energy marketing and price risk management activities totaled $175 million. Of this amount, investment grade counterparties, including those internally rated, represented 71%. No single counterparty, whether investment grade or non-investment grade, exceeded $30 million of exposure.

Credit-Related Contingent Provisions

The majority of Dominion’s derivative instruments contain credit-related contingent provisions. These provisions require Dominion to provide collateral upon the occurrence of specific events, primarily a credit rating downgrade. If the credit-related contingent features underlying these instruments that are in a liability position and not fully collateralized with cash were fully triggered as of March 31, 2016 and December 31, 2015, Dominion would have been required to post an additional $7 million and $12 million, respectively, of collateral to its counterparties. The collateral that would be required to be posted includes the impacts of any offsetting asset positions and any amounts already posted for derivatives, non-derivative contracts and derivatives elected under the normal purchases and normal sales exception, per contractual terms. Dominion had not posted any collateral at March 31, 2016 or December 31, 2015 related to derivatives with credit-related contingent provisions that are in a liability position and not fully collateralized with cash. The collateral posted includes any amounts paid related to non-derivative contracts and derivatives elected under the normal purchases and normal sales exception, per contractual terms. The aggregate fair value of all derivative instruments with credit-related contingent provisions that are in a liability position and not fully collateralized with cash as of March 31, 2016 and December 31, 2015 was $19 million and $49 million, respectively, which does not include the impact of any offsetting asset positions. Credit-related contingent provisions for Virginia Power and Dominion Gas were not material as of March 31, 2016 and December 31, 2015. See Note 9 for further information about derivative instruments.

Note 17. Related-Party Transactions

Virginia Power and Dominion Gas engage in related-party transactions primarily with other Dominion subsidiaries (affiliates). Virginia Power’s and Dominion Gas’ receivable and payable balances with affiliates are settled based on contractual terms or on a monthly basis, depending on the nature of the underlying transactions. Virginia Power and Dominion Gas are included in Dominion’s consolidated federal income tax return. Dominion’s transactions with equity method investments are described in Note 10. A discussion of significant related-party transactions follows.

Virginia Power

Transactions with Affiliates

Virginia Power transacts with affiliates for certain quantities of natural gas and other commodities in the ordinary course of business. Virginia Power also enters into certain commodity derivative contracts with affiliates. Virginia Power uses these contracts, which are principally comprised of commodity physical forwards and options, to manage commodity price risks associated with purchases of natural gas. As of March 31, 2016, Virginia Power’s derivative assets and liabilities with affiliates were each $14 million. As of December 31, 2015, Virginia Power’s derivative assets and liabilities with affiliates were $13 million and $22 million, respectively. See Note 9 for more information.

Virginia Power participates in certain Dominion benefit plans described in Note 18. In Virginia Power’s Consolidated Balance Sheets at March 31, 2016 and December 31, 2015, amounts due to Dominion associated with these benefit plans included in other deferred credits and other liabilities were $336 million and $316 million, respectively, and amounts due from Dominion at March 31, 2016 and December 31, 2015 included in other deferred charges and other assets were $87 million and $77 million, respectively.

DRS and other affiliates provide accounting, legal, finance and certain administrative and technical services to Virginia Power. In addition, Virginia Power provides certain services to affiliates, including charges for facilities and equipment usage.

Presented below are Virginia Power’s significant transactions with DRS and other affiliates:


	Three Months Ended March 31,
	2016		2015
(millions)
Commodity purchases from affiliates	$	145	$	252
Services provided by affiliates ⁽¹⁾		140		110
Services provided to affiliates		5		5

(1)	Includes capitalized expenditures of $39 million and $35 million for the three months ended March 31, 2016 and 2015, respectively.

Virginia Power has borrowed funds from Dominion under short-term borrowing arrangements. Virginia Power had no short-term demand note borrowings from Dominion as of March 31, 2016. There were $376 million in short-term demand note borrowings from Dominion as of December 31, 2015. Virginia Power had no outstanding borrowings under the Dominion money pool for its nonregulated subsidiaries as of March 31, 2016 and December 31, 2015. Interest charges related to Virginia Power’s borrowings from Dominion were immaterial for the three months ended March 31, 2016 and 2015.

There were no issuances of Virginia Power’s common stock to Dominion for the three months ended March 31, 2016 and 2015.

Dominion Gas

Transactions with Related Parties

Dominion Gas transacts with affiliates for certain quantities of natural gas and other commodities at market prices in the ordinary course of business. Additionally, Dominion Gas provides transportation and storage services to affiliates. Dominion Gas also enters into certain other contracts with affiliates, which are presented separately from contracts involving commodities or services. As of March 31, 2016 and December 31, 2015, all of Dominion Gas’ commodity derivatives were with affiliates. See Notes 7 and 9 for more information.

Dominion Gas participates in certain Dominion benefit plans as described in Note 18. In Dominion Gas’ Consolidated Balance Sheets at March 31, 2016 and December 31, 2015, amounts due from Dominion associated with these benefit plans included in noncurrent pension and other postretirement benefit assets were $663 million and $652 million, respectively, and amounts due to Dominion at March 31, 2016 and December 31, 2015 included in other deferred credits and other liabilities were $1 million and $2 million, respectively.

DRS and other affiliates provide accounting, legal, finance and certain administrative and technical services to Dominion Gas. Dominion Gas provides certain services to related parties, including technical services. The amounts recognized for these services were as follows:


	Three Months Ended March 31,
	2016		2015
(millions)
Purchases of natural gas and transportation and storage services from affiliates	$	3	$	2
Sales of natural gas and transportation and storage services to affiliates		17		18
Services provided by related parties ⁽¹⁾		39		34
Services provided to related parties ⁽²⁾		27		20

(1)	Includes capitalized expenditures of $12 million and $13 million for the three months ended March 31, 2016 and 2015, respectively.

(2)	Amounts primarily attributable to Atlantic Coast Pipeline.

The following table presents affiliated and related-party activity reflected in Dominion Gas’ Consolidated Balance Sheets:


	March 31, 2016		December 31, 2015
(millions)
Other receivables ⁽¹⁾	$	8	$	7
Customer receivables from related parties		2		4
Imbalances receivable from affiliates ⁽²⁾		3		1
Affiliated notes receivable ⁽³⁾		15		14

(1)	Represents amounts due from Atlantic Coast Pipeline, a related-party VIE.

(2)	Amounts are presented in other current assets in Dominion Gas’ Consolidated Balance Sheets.

(3)	Amounts are presented in other deferred charges and other assets in Dominion Gas’ Consolidated Balance Sheets.

Dominion Gas’ borrowings under the intercompany revolving credit agreement with Dominion totaled $40 million and $95 million as of March 31, 2016 and December 31, 2015, respectively. Interest charges related to Dominion Gas’ total borrowings from Dominion were immaterial for the three months ended March 31, 2016 and 2015.

Note 18. Employee Benefit Plans

In the first quarter of 2016, the Companies announced an organizational design initiative that will reduce their total workforces during 2016. The goal of the organizational design initiative was to streamline our leadership structure and push decision making lower while also improving efficiency. In the first quarter of 2016, Dominion recorded a $70 million ($43 million after-tax) charge, including $40 million ($25 million after-tax) at Virginia Power and $8 million ($5 million after-tax) at Dominion Gas, primarily reflected in other operations and maintenance expense in their Consolidated Statements of Income due to severance pay and other costs related to the organizational design initiative. The terms of the severance under the organizational design initiative were consistent with the Companies’ existing severance plans.

Dominion

The components of Dominion’s provision for net periodic benefit cost (credit) were as follows:


	Pension Benefits						Other Postretirement Benefits
	2016			2015			2016			2015
(millions)
Three Months Ended March 31,
Service cost	$	29		$	32		$	8		$	10
Interest cost		77			72			17			17
Expected return on plan assets		(139	)		(133	)		(29	)		(29	)
Amortization of prior service credit		—			—			(7	)		(7	)
Amortization of net actuarial loss		28			40			1			1

Net periodic benefit cost (credit)	$	(5	)	$	11		$	(10	)	$	(8	)

Employer Contributions

During the three months ended March 31, 2016, Dominion made no contributions to its defined benefit pension plans or other postretirement benefit plans. Dominion expects to contribute approximately $12 million to its other postretirement benefit plans through VEBAs during the remainder of 2016.

Dominion Gas

Dominion Gas participates in certain Dominion benefit plans as described in Note 21 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015. See Note 17 for more information.

The components of Dominion Gas’ provision for net periodic benefit credit for employees represented by collective bargaining units were as follows:


	Pension Benefits						Other Postretirement Benefits
	2016			2015			2016			2015
(millions)
Three Months Ended March 31,
Service cost	$	3		$	3		$	1		$	2
Interest cost		8			7			3			3
Expected return on plan assets		(33	)		(31	)		(5	)		(6	)
Amortization of net actuarial loss		3			5			—			1

Net periodic benefit credit	$	(19	)	$	(16	)	$	(1	)	$	—

Employer Contributions

During the three months ended March 31, 2016, Dominion Gas made no contributions to its defined benefit pension plans or other postretirement benefit plans. Dominion Gas expects to contribute approximately $12 million to its other postretirement benefit plans through VEBAs, for both employees represented by collective bargaining units and employees not represented by collective bargaining units, during the remainder of 2016.

Note 19. Operating Segments

The Companies are organized primarily on the basis of products and services sold in the U.S. A description of the operations included in the Companies’ primary operating segments is as follows:


Primary Operating Segment	Description of Operations	Dominion	Virginia Power	Dominion Gas
DVP	Regulated electric distribution	X	X
	Regulated electric transmission	X	X
Dominion Generation	Regulated electric fleet	X	X
	Merchant electric fleet	X
Dominion Energy	Gas transmission and storage ⁽¹⁾	X		X
	Gas distribution and storage	X		X
	Gas gathering and processing	X		X
	LNG import and storage	X
	Nonregulated retail energy marketing ⁽²⁾	X

(1)	Includes remaining producer services activities for Dominion.

(2)	As a result of Dominion’s decision to realign its business units effective for 2015 year-end reporting, nonregulated retail energy marketing operations were moved from the Dominion Generation segment to the Dominion Energy segment.

In addition to the operating segments above, the Companies also report a Corporate and Other segment.

Dominion

The Corporate and Other Segment of Dominion includes its corporate, service company and other functions (including unallocated debt) and the net impact of operations that are discontinued or sold. In addition, Corporate and Other includes specific items attributable to Dominion’s operating segments that are not included in profit measures evaluated by executive management in assessing the segments’ performance or in allocating resources.

In the three months ended March 31, 2016, Dominion reported an after-tax net expense of $48 million for specific items in the Corporate and Other segment, with $38 million of these net expenses attributable to its operating segments. In the three months ended March 31, 2015, Dominion reported an after-tax net expense of $48 million for specific items in the Corporate and Other segment, with $45 million of these net expenses attributable to its operating segments.

The net expense for specific items attributable to Dominion’s operating segments in 2016 primarily related to the impact of the following item:

•

A $66 million ($41 million after-tax) charge related to an organizational design initiative, attributable to:

•

DVP ($6 million after-tax);

•

Dominion Energy ($12 million after-tax); and

•

Dominion Generation ($23 million after-tax).

The net expense for specific items in 2015 primarily related to the impact of the following items, all of which were attributable to Dominion Generation:

•

An $85 million ($52 million after-tax) write-off of deferred fuel costs associated with Virginia legislation enacted in February 2015; and

•

A $17 million ($10 million after-tax) billing adjustment related to PJM; partially offset by

•

A $27 million ($17 million after-tax) net gain on investments held in nuclear decommissioning trust funds.

The following table presents segment information pertaining to Dominion’s operations:


	DVP		Dominion Generation ⁽¹⁾		Dominion Energy ⁽¹⁾		Corporate and Other			Adjustments/ Eliminations ⁽¹⁾			Consolidated Total
(millions)
Three Months Ended March 31, 2016
Total revenue from external customers	$	556	$	1,693	$	485	$	3		$	184		$	2,921
Intersegment revenue		5		3		178		192			(378	)		—

Total operating revenue		561		1,696		663		195			(194	)		2,921
Net income (loss) attributable to Dominion		120		245		186		(27	)		—			524

Three Months Ended March 31, 2015
Total revenue from external customers	$	564	$	1,989	$	536	$	(13	)	$	333		$	3,409
Intersegment revenue		5		3		310		142			(460	)		—

Total operating revenue		569		1,992		846		129			(127	)		3,409
Net income (loss) attributable to Dominion		140		262		227		(93	)		—			536

(1)	2015 amounts have been recast to reflect nonregulated retail energy marketing operations in the Dominion Energy segment.

Intersegment sales and transfers for Dominion are based on contractual arrangements and may result in intersegment profit or loss that is eliminated in consolidation.

Virginia Power

The Corporate and Other Segment of Virginia Power primarily includes specific items attributable to its operating segments that are not included in profit measures evaluated by executive management in assessing the segments’ performance or in allocating resources.

In the three months ended March 31, 2016, Virginia Power reported an after-tax net expense of $26 million for specific items in the Corporate and Other segment, with $25 million of these net expenses attributable to its operating segments. In the three months ended March 31, 2015, Virginia Power reported an after-tax net expense of $61 million for specific items in the Corporate and Other segment, all of which was attributable to its operating segments.

The net expense for specific items attributable to Virginia Power’s operating segments in 2016 primarily related to the impact of the following item:

•

A $40 million ($25 million after-tax) charge related to an organizational design initiative, attributable to:

•

DVP ($6 million after-tax); and

•

Dominion Generation ($19 million after-tax).

The net expense for specific items in 2015 primarily related to the impact of the following items, all of which were attributable to Dominion Generation:

•

An $85 million ($52 million after-tax) write-off of deferred fuel costs associated with Virginia legislation enacted in February 2015; and

•

A $15 million ($9 million after-tax) billing adjustment related to PJM.

The following table presents segment information pertaining to Virginia Power’s operations:


	DVP		Dominion Generation		Corporate and Other			Consolidated Total
(millions)
Three Months Ended March 31, 2016
Operating revenue	$	557	$	1,333	$	—		$	1,890
Net income (loss)		118		166		(21	)		263

Three Months Ended March 31, 2015
Operating revenue	$	567	$	1,585	$	(15	)	$	2,137
Net income (loss)		140		190		(61	)		269

Dominion Gas

The Corporate and Other Segment of Dominion Gas primarily includes specific items attributable to Dominion Gas’ operating segment that are not included in profit measures evaluated by executive management in assessing the segment’s performance or in allocating resources and the effect of certain items recorded at Dominion Gas as a result of Dominion’s basis in the net assets contributed.

In the three months ended March 31, 2016, Dominion Gas reported an after-tax net expense of $2 million for specific items in the Corporate and Other segment, all of which was attributable to its operating segment. In the three months ended March 31, 2015, Dominion Gas reported no amounts for specific items in the Corporate and Other segment.

The net expense for specific items in 2016 primarily related to an $8 million ($5 million after-tax) charge related to an organizational design initiative.

The following table presents segment information pertaining to Dominion Gas’ operations:


	Dominion Energy		Corporate and Other			Consolidated Total
(millions)
Three Months Ended March 31, 2016
Operating revenue	$	431	$	—		$	431
Net income (loss)		103		(5	)		98

Three Months Ended March 31, 2015
Operating revenue	$	531	$	—		$	531
Net income (loss)		164		(3	)		161

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MD&A discusses Dominion’s results of operations and general financial condition and Virginia Power’s and Dominion Gas’ results of operations. MD&A should be read in conjunction with the Companies’ Consolidated Financial Statements. Virginia Power and Dominion Gas meet the conditions to file under the reduced disclosure format, and therefore have omitted certain sections of MD&A.

Contents of MD&A

MD&A consists of the following information:

•

Forward-Looking Statements

•

Accounting Matters - Dominion

•

Dominion

•

Results of Operations

•

Segment Results of Operations

•

Virginia Power

•

Results of Operations

•

Dominion Gas

•

Results of Operations

•

Liquidity and Capital Resources - Dominion

•

Future Issues and Other Matters - Dominion

Forward-Looking Statements

This report contains statements concerning the Companies’ expectations, plans, objectives, future financial performance and other statements that are not historical facts. These statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify these forward-looking statements by such words as “anticipate,” “estimate,” “forecast,” “expect,” “believe,” “should,” “could,” “plan,” “may,” “continue,” “target” or other similar words.

The Companies make forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to differ materially from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other factors may cause actual results to differ materially from those indicated in any forward-looking statement. These factors include but are not limited to:

•

Unusual weather conditions and their effect on energy sales to customers and energy commodity prices;

•

Extreme weather events and other natural disasters, including hurricanes, high winds, severe storms, earthquakes, flooding and changes in water temperatures and availability that can cause outages and property damage to facilities;

•

Federal, state and local legislative and regulatory developments, including changes in federal and state tax laws and regulations;

•

Changes to federal, state and local environmental laws and regulations, including those related to climate change, the tightening of emission or discharge limits for GHGs and other emissions, more extensive permitting requirements and the regulation of additional substances;

•

Cost of environmental compliance, including those costs related to climate change;

•

Changes in implementation and enforcement practices of regulators relating to environmental standards and litigation exposure for remedial activities;

•

Difficulty in anticipating mitigation requirements associated with environmental and other regulatory approvals;

•

Risks associated with the operation of nuclear facilities, including costs associated with the disposal of spent nuclear fuel, decommissioning, plant maintenance and changes in existing regulations governing such facilities;

•

Unplanned outages at facilities in which the Companies have an ownership interest;

•

Fluctuations in energy-related commodity prices and the effect these could have on Dominion’s and Dominion Gas’ earnings and the Companies’ liquidity position and the underlying value of their assets;

•

Counterparty credit and performance risk;

•

Capital market conditions, including the availability of credit and the ability to obtain financing on reasonable terms;

•

Risks associated with Virginia Power’s membership and participation in PJM, including risks related to obligations created by the default of other participants;

•

Fluctuations in the value of investments held in nuclear decommissioning trusts by Dominion and Virginia Power and in benefit plan trusts by Dominion and Dominion Gas;

•

Fluctuations in interest rates;

•

Changes in rating agency requirements or credit ratings and their effect on availability and cost of capital;

•

Changes in financial or regulatory accounting principles or policies imposed by governing bodies;

•

Employee workforce factors including collective bargaining agreements and labor negotiations with union employees;

•

Risks of operating businesses in regulated industries that are subject to changing regulatory structures;

•

Impacts of acquisitions, divestitures, transfers of assets to joint ventures or Dominion Midstream, and retirements of assets based on asset portfolio reviews;

•

The expected timing and likelihood of completion of the Questar Combination, including the ability to obtain the requisite approvals of Questar’s shareholders and the terms and conditions of any required regulatory approvals;

•

Receipt of approvals for, and timing of, closing dates for other acquisitions and divestitures;

•

The timing and execution of Dominion Midstream’s growth strategy;

•

Changes in rules for regional transmission organizations and independent system operators in which Dominion and Virginia Power participate, including changes in rate designs, changes in FERC’s interpretation of market rules and new and evolving capacity models;

•

Political and economic conditions, including inflation and deflation;

•

Domestic terrorism and other threats to the Companies’ physical and intangible assets, as well as threats to cybersecurity;

•

Changes in demand for the Companies’ services, including industrial, commercial and residential growth or decline in the Companies’ service areas, changes in supplies of natural gas delivered to Dominion and Dominion Gas’ pipeline and processing systems, failure to maintain or replace customer contracts on favorable terms, changes in customer growth or usage patterns, including as a result of energy conservation programs, the availability of energy efficient devices and the use of distributed generation methods;

•

Additional competition in industries in which the Companies operate, including in electric markets in which Dominion’s merchant generation facilities operate, and competition in the development, construction and ownership of certain electric transmission facilities in Virginia Power’s service territory in connection with FERC Order 1000;

•

Changes in technology, particularly with respect to new, developing or alternative sources of generation and smart grid technologies;

•

Changes to regulated electric rates collected by Virginia Power and regulated gas distribution, transportation and storage rates, including LNG storage, collected by Dominion and Dominion Gas;

•

Changes in operating, maintenance and construction costs;

•

Timing and receipt of regulatory approvals necessary for planned construction or expansion projects and compliance with conditions associated with such regulatory approvals;

•

The inability to complete planned construction, conversion or expansion projects at all, or with the outcomes or within the terms and time frames initially anticipated;

•

Adverse outcomes in litigation matters or regulatory proceedings; and

•

The impact of operational hazards, including adverse developments with respect to pipeline and plant safety or integrity, equipment loss, malfunction or failure, operator error, and other catastrophic events.

Additionally, other risks that could cause actual results to differ from predicted results are set forth in Item 1A. Risk Factors in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015.

The Companies’ forward-looking statements are based on beliefs and assumptions using information available at the time the statements are made. The Companies caution the reader not to place undue reliance on their forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. The Companies undertake no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

Accounting Matters

Critical Accounting Policies and Estimates

As of March 31, 2016, there have been no significant changes with regard to the critical accounting policies and estimates disclosed in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015. The policies disclosed included the accounting for regulated operations, AROs, income taxes, derivative contracts and other instruments at fair value, goodwill and long-lived asset impairment testing and employee benefit plans.

Dominion

Results of Operations

Presented below is a summary of Dominion’s consolidated results:


	2016		2015		$ Change
(millions, except EPS)
First Quarter
Net income attributable to Dominion	$	524	$	536	$	(12	)
Diluted EPS		0.88		0.91		(0.03	)

Overview

First Quarter 2016 vs. 2015

Net income attributable to Dominion decreased 2%, primarily due to a decrease in sales to retail customers from a reduction in heating degree days, organizational design initiative costs and a decrease in gains from agreements to convey shale development rights underneath several natural gas storage fields. These decreases were partially offset by the absence of the write-off of deferred fuel costs associated with Virginia legislation enacted in February 2015 and an increase in renewable energy investment tax credits.

Analysis of Consolidated Operations

Presented below are selected amounts related to Dominion’s results of operations:


	First Quarter
	2016		2015		$ Change
(millions)
Operating revenue	$	2,921	$	3,409	$	(488	)
Electric fuel and other energy-related purchases		634		953		(319	)
Purchased electric capacity		68		94		(26	)
Purchased gas		119		250		(131	)

Net revenue		2,100		2,112		(12	)

Other operations and maintenance		703		602		101
Depreciation, depletion and amortization		351		343		8
Other taxes		164		165		(1	)
Other income		54		60		(6	)
Interest and related charges		226		223		3
Income tax expense		179		299		(120	)

An analysis of Dominion’s results of operations follows:

First Quarter 2016 vs. 2015

Net revenue decreased 1%, primarily reflecting:

•

A $38 million decrease from regulated natural gas distribution operations, primarily reflecting:

•

A decrease in rate adjustment clause revenue related to low income assistance programs ($27 million); and

•

A decrease in sales to customers due to a reduction in heating degree days ($13 million); partially offset by

•

An increase in AMR and PIR program revenues ($5 million);

•

A $19 million decrease from regulated natural gas transmission operations, primarily reflecting:

•

A $17 million decrease in gas transportation and storage activities, primarily due to decreased fuel retained ($10 million), decreased demand charges ($9 million) and decreased regulated gas sales ($8 million), partially offset by the addition of DCG ($7 million); and

•

A $7 million decrease in NGL activities, due to decreased prices ($4 million) and volumes ($3 million); partially offset by

•

A $6 million net increase primarily due to services performed for Atlantic Coast Pipeline and Blue Racer; and

•

A $14 million decrease from merchant generation operations, primarily due to lower realized prices ($14 million) and an increase in unplanned outage days in the first quarter of 2016 ($4 million), partially offset by an increase in output at solar generating facilities ($7 million).

These decreases were partially offset by a $53 million increase from electric utility operations, primarily reflecting:

•

The absence of an $85 million write-off of deferred fuel costs associated with Virginia legislation enacted in February 2015;

•

A net decrease in capacity related expenses ($23 million); and

•

An increase from rate adjustment clauses ($18 million); partially offset by

•

A decrease in sales to retail customers from a reduction in heating degree days ($74 million); and

•

A decrease in sales to customers due to the effect of changes in customer usage and other factors ($14 million).

Other operations and maintenance increased 17%, primarily reflecting:

•

Organizational design initiative costs ($69 million);

•

A decrease in gains from agreements to convey shale development rights underneath several natural gas storage fields ($65 million); and

•

A $5 million net increase due to services performed for Atlantic Coast Pipeline and Blue Racer. These expenses are billed to these entities and do not significantly impact net income; partially offset by

•

A decrease in bad debt expense at regulated natural gas distribution operations primarily related to low income assistance programs ($27 million). These bad debt expenses are recovered through rates and do not impact net income.

Income tax expense decreased 40%, primarily due to higher anticipated renewable energy investment tax credits ($69 million) in Dominion’s estimated annual effective income tax rate and lower pre-tax income ($51 million).

Segment Results of Operations

Segment results include the impact of intersegment revenues and expenses, which may result in intersegment profit and loss. Presented below is a summary of contributions by Dominion’s operating segments to net income attributable to Dominion:


	Net Income attributable to Dominion									Diluted EPS
	2016			2015			$ Change			2016			2015			$ Change
(millions, except EPS)
First Quarter
DVP	$	120		$	140		$	(20	)	$	0.20		$	0.24		$	(0.04	)
Dominion Generation ⁽¹⁾		245			262			(17	)		0.41			0.44			(0.03	)
Dominion Energy ⁽¹⁾		186			227			(41	)		0.31			0.39			(0.08	)

Primary operating segments		551			629			(78	)		0.92			1.07			(0.15	)
Corporate and Other		(27	)		(93	)		66			(0.04	)		(0.16	)		0.12

Consolidated	$	524		$	536		$	(12	)	$	0.88		$	0.91		$	(0.03	)

(1)	2015 amounts have been recast to reflect nonregulated retail energy marketing operations in the Dominion Energy segment.

DVP

Presented below are selected operating statistics related to DVP’s operations:


	First Quarter
	2016		2015		% Change
Electricity delivered (million MWh)		21.2		22.9		(7	)%
Degree days (electric distribution service area):
Cooling		4		—		100
Heating		1,880		2,364		(20	)
Average electric distribution customer accounts (thousands) ⁽¹⁾		2,541		2,518		1

(1)	Period average.

Presented below, on an after-tax basis, are the key factors impacting DVP’s net income contribution:


	First Quarter 2016 vs. 2015 Increase (Decrease)
	Amount			EPS
(millions, except EPS)
Regulated electric sales:
Weather	$	(15	)	$	(0.03	)
Other		(5	)		(0.01	)
FERC transmission equity return		11			0.02
Storm damage and service restoration		(2	)		—
Other		(9	)		(0.02	)

Change in net income contribution	$	(20	)	$	(0.04	)

Dominion Generation

Presented below are selected operating statistics related to Dominion Generation’s operations:


	First Quarter
	2016		2015		% Change
Electricity supplied (million MWh):
Utility		22.2		22.9		(3	)%
Merchant		7.1		6.4		11
Degree days (electric utility service area):
Cooling		4		—		100
Heating		1,880		2,364		(20	)

Presented below, on an after-tax basis, are the key factors impacting Dominion Generation’s net income contribution:


	First Quarter 2016 vs. 2015 Increase (Decrease)
	Amount			EPS
(millions, except EPS)
Regulated electric sales:
Weather	$	(31	)	$	(0.05	)
Other		(3	)		(0.01	)
Capacity related expenses		14			0.03
Merchant generation margin		(8	)		(0.02	)
Other		11			0.02

Change in net income contribution	$	(17	)	$	(0.03	)

Dominion Energy

Presented below are selected operating statistics related to Dominion Energy’s operations:


	First Quarter
	2016		2015		% Change
Gas distribution throughput (bcf):
Sales		13		16		(19	)%
Transportation		159		162		(2	)
Heating degree days (gas distribution service area)		2,684		3,575		(25	)
Average gas distribution customer accounts (thousands) ⁽¹⁾ :
Sales		240		245		(2	)
Transportation		1,069		1,063		1
Average retail energy marketing customer accounts (thousands) ⁽¹⁾		1,354		1,250		8

(1)	Period average.

Presented below, on an after-tax basis, are the key factors impacting Dominion Energy’s net income contribution:


	First Quarter 2016 vs. 2015 Increase (Decrease)
	Amount			EPS
(millions, except EPS)
Gas distribution margin:
Weather	$	(8	)	$	(0.02	)
Other		5			0.01
Assignment of shale development rights		(41	)		(0.08	)
Other		3			0.01

Change in net income contribution	$	(41	)	$	(0.08	)

Corporate and Other

Presented below are the Corporate and Other segment’s after-tax results:


	First Quarter
	2016			2015			$ Change
(millions, except EPS)
Specific items attributable to operating segments	$	(38	)	$	(45	)	$	7
Specific items attributable to corporate operations		(10	)		(3	)		(7	)

Total specific items		(48	)		(48	)		—
Other corporate operations
Renewable energy investment tax credits		81			6			75
Other		(60	)		(51	)		(9	)

Total other corporate operations		21			(45	)		66

Total net expense	$	(27	)	$	(93	)	$	66
EPS impact	$	(0.04	)	$	(0.16	)	$	0.12

Total Specific Items

Corporate and Other includes specific items attributable to Dominion’s primary operating segments that are not included in profit measures evaluated by executive management in assessing those segments’ performance or in allocating resources. See Note 19 to the Consolidated Financial Statements in this report for discussion of these items in more detail.

Virginia Power

Results of Operations

Presented below is a summary of Virginia Power’s consolidated results:


	First Quarter
	2016		2015		$ Change
(millions)
Net income	$	263	$	269	$	(6	)

Overview

First Quarter 2016 vs. 2015

Net income decreased 2%, primarily due to a decrease in sales to retail customers from a reduction in heating degree days and organizational design initiative costs, partially offset by the absence of the write-off of deferred fuel costs associated with Virginia legislation enacted in February 2015 and a decrease in capacity related expenses.

Analysis of Consolidated Operations

Presented below are selected amounts related to Virginia Power’s results of operations:


	First Quarter
	2016		2015		$ Change
(millions)
Operating revenue	$	1,890	$	2,137	$	(247	)
Electric fuel and other energy-related purchases		536		810		(274	)
Purchased electric capacity		68		94		(26	)

Net revenue		1,286		1,233		53

Other operations and maintenance		450		396		54
Depreciation and amortization		248		238		10
Other taxes		74		74		—
Other income		16		15		1
Interest and related charges		114		108		6
Income tax expense		153		163		(10	)

An analysis of Virginia Power’s results of operations follows:

First Quarter 2016 vs. 2015

Net revenue increased 4%, primarily reflecting:

•

The absence of an $85 million write-off of deferred fuel costs associated with Virginia legislation enacted in February 2015;

•

A net decrease in capacity related expenses ($23 million); and

•

An increase from rate adjustment clauses ($18 million); partially offset by

•

A decrease in sales to retail customers from a reduction in heating degree days ($74 million); and

•

A decrease in sales to customers due to the effect of changes in customer usage and other factors ($14 million).

Other operations and maintenance increased 14%, primarily reflecting organizational design initiative costs.

Dominion Gas

Results of Operations

Presented below is a summary of Dominion Gas’ consolidated results:


	First Quarter
	2016		2015		$ Change
(millions)
Net income	$	98	$	161	$	(63	)

Overview

First Quarter 2016 vs. 2015

Net income decreased 39%, primarily due to a decrease in gains from agreements to convey shale development rights underneath several natural gas storage fields.

Analysis of Consolidated Operations

Presented below are selected amounts related to Dominion Gas’ results of operations:


	First Quarter
	2016		2015		$ Change
(millions)
Operating revenue	$	431	$	531	$	(100	)
Purchased gas		34		74		(40	)
Other energy-related purchases		3		6		(3	)

Net revenue		394		451		(57	)

Other operations and maintenance		124		74		50
Depreciation and amortization		43		51		(8	)
Other taxes		52		55		(3	)
Other income		6		9		(3	)
Interest and related charges		22		17		5
Income tax expense		61		102		(41	)

An analysis of Dominion Gas’ results of operations follows:

First Quarter 2016 vs. 2015

Net revenue decreased 13%, primarily reflecting:

•

An $33 million decrease from regulated natural gas distribution operations, primarily reflecting:

•

A decrease in rate adjustment clause revenue related to low income assistance programs ($27 million); and

•

A decrease in sales to customers due to a reduction in heating degree days ($8 million); partially offset by

•

An increase in AMR and PIR program revenues ($5 million); and

•

A $24 million decrease from regulated natural gas transmission operations, primarily reflecting:

•

A $24 million decrease in gas transportation and storage activities, primarily due to decreased fuel retained ($8 million), decreased demand charges ($8 million) and decreased regulated gas sales ($8 million); and

•

A $6 million decrease in NGL activities, due to decreased prices ($3 million) and volumes ($3 million); partially offset by

•

A $6 million net increase primarily due to services performed for Atlantic Coast Pipeline and Blue Racer.

Other operations and maintenance increased 68%, primarily reflecting:

•

A decrease in gains from agreements to convey shale development rights underneath several natural gas storage fields ($65 million);

•

Organizational design initiative costs ($7 million); and

•

Other income decreased 33%, primarily due to a decrease in equity earnings from Iroquois.

Interest and related charges increased 29%, primarily due to higher interest expense on long-term debt resulting from a debt issuance in November 2015.

Income tax expense decreased 40%, primarily reflecting lower pre-tax income.

Liquidity and Capital Resources

Dominion depends on both internal and external sources of liquidity to provide working capital and as a bridge to long-term debt financings. Short-term cash requirements not met by cash provided by operations are generally satisfied with proceeds from short-term borrowings. Long-term cash needs are met through issuances of debt and/or equity securities.

In September 2015, Dominion initiated a program to purchase from the market up to $50 million of common units representing limited partner interests in Dominion Midstream. The common units may be acquired by Dominion over the 12 month period following commencement of the program at the discretion of management. During the first quarter of 2016, Dominion purchased approximately 377,000 common units for $10 million. As of March 31, 2016, Dominion still has the ability to purchase $15 million of common units under the program.

Given the sufficiency of operating and other cash flows at the Dominion level, no dividends were declared or paid to Dominion by either Virginia Power or Dominion Gas during the first quarter.

At March 31, 2016, Dominion had $2.4 billion of unused capacity under its credit facilities.

A summary of Dominion’s cash flows is presented below:


	2016			2015
(millions)
Cash and cash equivalents at January 1	$	607		$	318
Cash flows provided by (used in):
Operating activities		1,192			1,131
Investing activities		(1,525	)		(1,499	)
Financing activities		(56	)		325

Net decrease in cash and cash equivalents		(389	)		(43	)

Cash and cash equivalents at March 31	$	218		$	275

Operating Cash Flows

Net cash provided by Dominion’s operating activities increased $61 million, primarily due to higher deferred fuel cost recoveries in its Virginia jurisdiction and changes in other working capital items, partially offset by higher net margin collateral requirements and the impact from unfavorable weather in 2016.

Dominion believes that its operations provide a stable source of cash flow to contribute to planned levels of capital expenditures and maintain or grow the dividend on common shares.

Dominion’s operations are subject to risks and uncertainties that may negatively impact the timing or amounts of operating cash flows, which are discussed in Item 1A. Risk Factors in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015.

Credit Risk

Dominion’s exposure to potential concentrations of credit risk results primarily from its energy marketing and price risk management activities. Presented below is a summary of Dominion’s credit exposure as of March 31, 2016 for these activities. Gross credit exposure for each counterparty is calculated prior to the application of collateral and represents outstanding receivables plus any unrealized on- or off-balance sheet exposure, taking into account contractual netting rights.


	Gross Credit Exposure		Credit Collateral		Net Credit Exposure
(millions)
Investment grade ⁽¹⁾	$	121	$	75	$	46
Non-investment grade ⁽²⁾		2		—		2
No external ratings:
Internally rated—investment grade ⁽³⁾		4		—		4
Internally rated—non-investment grade ⁽⁴⁾		48		—		48

Total	$	175	$	75	$	100

(1)	Designations as investment grade are based upon minimum credit ratings assigned by Moody’s Investors Service and Standard & Poor’s. The five largest counterparty exposures, combined, for this category represented approximately 40% of the total net credit exposure.

(2)	The five largest counterparty exposures, combined, for this category represented approximately 2% of the total net credit exposure.

(3)	The five largest counterparty exposures, combined, for this category represented approximately 4% of the total net credit exposure.

(4)	The five largest counterparty exposures, combined, for this category represented approximately 36% of the total net credit exposure.

Investing Cash Flows

Net cash used in Dominion’s investing activities increased $26 million, primarily due to higher capital expenditures, partially offset by the absence of Dominion’s acquisition of DCG in 2015.

Financing Cash Flows and Liquidity

Dominion relies on capital markets as significant sources of funding for capital requirements not satisfied by cash provided by its operations. As discussed further in Credit Ratings and Debt Covenants in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015, the ability to borrow funds or issue securities and the return demanded by investors are affected by credit ratings. In addition, the raising of external capital is subject to certain regulatory requirements, including registration with the SEC for certain issuances.

Dominion currently meets the definition of a well-known seasoned issuer under SEC rules governing the registration, communications and offering processes under the Securities Act of 1933, as amended. The rules provide for a streamlined shelf registration process to provide registrants with timely access to capital. This allows Dominion to use automatic shelf registration statements to register any offering of securities, other than those for exchange offers or business combination transactions.

Net cash used in Dominion’s financing activities was $56 million in 2016, as compared to net cash provided by financing activities of $325 million in 2015, primarily reflecting lower net debt issuances and a decrease in common stock issuances.

See Note 14 to the Consolidated Financial Statements in this report for further information regarding Dominion’s credit facilities, liquidity and significant financing transactions.

Credit Ratings

Credit ratings are intended to provide banks and capital market participants with a framework for comparing the credit quality of securities and are not a recommendation to buy, sell or hold securities. In the Credit Ratings section of MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015, there is a discussion on the use of capital markets by Dominion as well as the impact of credit ratings on the accessibility and costs of using these markets.

In March 2016, Fitch Ratings Ltd. and Standard & Poor’s changed the rating for Dominion’s junior subordinated debt securities to account for its inability to defer interest payments on the remarketed 2013 Series A RSNs. Junior subordinated debt securities with an interest deferral feature are rated one notch lower by Fitch Ratings Ltd. and Standard & Poor’s (BBB-) than junior subordinated debt securities without an interest deferral feature (BBB). See Note 14 to the Consolidated Financial Statements for a description of the remarketed notes.

Debt Covenants

In the Debt Covenants section of MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015, there is a discussion on the various covenants present in the enabling agreements underlying Dominion’s debt. As of March 31, 2016, there have been no material changes to debt covenants, nor any events of default under Dominion’s debt covenants. Pursuant to a waiver received in April 2016, the 65% maximum debt to total capital ratio in Dominion’s credit agreements will, with respect to Dominion only and upon closing of the Questar Combination, be temporarily increased to 70% until the end of the fourth fiscal quarter following closing (including the fiscal quarter in which the closing occurs).

Future Cash Payments for Contractual Obligations and Planned Capital Expenditures

As of March 31, 2016, there have been no material changes outside the ordinary course of business to Dominion’s contractual obligations nor any material changes to planned capital expenditures as disclosed in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015.

Use of Off-Balance Sheet Arrangements

As of March 31, 2016, there have been no material changes in the off-balance sheet arrangements disclosed in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015.

Future Issues and Other Matters

The following discussion of future issues and other information includes current developments of previously disclosed matters and new issues arising during the period covered by, and subsequent to, the dates of Dominion’s Consolidated Financial Statements that may impact future results of operations, financial condition and/or cash flows. This section should be read in conjunction with Item 1. Business and Future Issues and Other Matters in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015.

Environmental Matters

Dominion is subject to costs resulting from a number of federal, state and local laws and regulations designed to protect human health and the environment. These laws and regulations affect future planning and existing operations. They can result in increased capital, operating and other costs as a result of compliance, remediation, containment and monitoring obligations. See Note 22 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015, and Note 15 to the Consolidated Financial Statements in this report for additional information on various environmental matters.

Legal Matters

See Item 3. Legal Proceedings in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015, and Notes 12 and 15 to the Consolidated Financial Statements and Item 1. Legal Proceedings in this report for additional information on various legal matters.

Regulatory Matters

See Note 13 to the Consolidated Financial Statements in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015, and Note 12 to the Consolidated Financial Statements in this report for additional information on various regulatory matters.

Electric Transmission Project

In March 2016, Virginia Power filed an application with the Virginia Commission for a CPCN to rebuild and operate in multiple Virginia counties approximately 33 miles of the existing 500 kV transmission line between the Cunningham switching station and the Dooms substation, along with associated station work. The total estimated cost of the project is approximately $59 million. This case is pending.

ITEM 3.

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

The matters discussed in this Item may contain “forward-looking statements” as described in the introductory paragraphs under Part I, Item 2. MD&A in this report. The reader’s attention is directed to those paragraphs for discussion of various risks and uncertainties that may impact the Companies.

Market Risk Sensitive Instruments and Risk Management

The Companies’ financial instruments, commodity contracts and related financial derivative instruments are exposed to potential losses due to adverse changes in commodity prices, interest rates and equity security prices as described below. Commodity price risk is present in Dominion’s and Virginia Power’s electric operations and Dominion’s and Dominion Gas’ natural gas procurement and marketing operations due to the exposure to market shifts in prices received and paid for electricity, natural gas and other commodities. The Companies use commodity derivative contracts to manage price risk exposures for these operations. Interest rate risk is generally related to their outstanding debt and future issuances of debt. In addition, the Companies are exposed to investment price risk through various portfolios of equity and debt securities.

The following sensitivity analysis estimates the potential loss of future earnings or fair value from market risk sensitive instruments over a selected time period due to a 10% change in commodity prices or interest rates.

Commodity Price Risk

To manage price risk, Dominion and Virginia Power hold commodity-based derivative instruments held for non-trading purposes associated with purchases and sales of electricity, natural gas and other energy-related products and Dominion Gas holds commodity-based financial derivative instruments held for non-trading purposes associated with purchases and sales of natural gas and other energy-related products.

The derivatives used to manage commodity price risk are executed within established policies and procedures and may include instruments such as futures, forwards, swaps, options and FTRs that are sensitive to changes in the related commodity prices. For sensitivity analysis purposes, the hypothetical change in market prices of commodity-based derivative instruments is determined based on models that consider the market prices of commodities in future periods, the volatility of the market prices in each period, as well as the time value factors of the derivative instruments. Prices and volatility are principally determined based on observable market prices.

A hypothetical 10% increase in commodity prices would have resulted in a decrease in fair value of $2 million and $24 million of Dominion’s commodity-based derivative instruments as of March 31, 2016 and December 31, 2015, respectively. The decline in sensitivity is largely due to decreased commodity derivative activity and lower commodity prices.

A hypothetical 10% decrease in commodity prices would have resulted in a decrease in the fair value of $41 million and $42 million of Virginia Power’s commodity-based derivative instruments as of March 31, 2016 and December 31, 2015, respectively.

A hypothetical 10% increase in commodity prices would have resulted in a decrease in fair value of $4 million and $5 million of Dominion Gas’ commodity-based derivative instruments as of March 31, 2016 and December 31, 2015, respectively.

The impact of a change in energy commodity prices on the Companies’ commodity-based derivative instruments at a point in time is not necessarily representative of the results that will be realized when the contracts are ultimately settled. Net losses from commodity-based financial derivative instruments used for hedging purposes, to the extent realized, will generally be offset by recognition of the hedged transaction, such as revenue from physical sales of the commodity. Physical commodity-based derivative instruments will be recognized as a gross revenue or expense based upon the transaction price and volume.

Interest Rate Risk

The Companies manage their interest rate risk exposure predominantly by maintaining a balance of fixed and variable rate debt. They also enter into interest rate sensitive derivatives, including interest rate swaps and interest rate lock agreements. For variable rate debt and interest rate swaps designated under fair value hedging and outstanding for the Companies, a hypothetical 10% increase in market interest rates would not have resulted in a material change in earnings at March 31, 2016 or December 31, 2015.

The Companies may also use forward-starting interest rate swaps and interest rate lock agreements as anticipatory hedges.

As of March 31, 2016, Dominion, Virginia Power and Dominion Gas had $3.9 billion, $1.8 billion and $250 million, respectively, in aggregate notional amounts of these interest rate derivatives outstanding. A hypothetical 10% decrease in market interest rates would have resulted in a decrease of $58 million, $47 million and $1 million, respectively, in the fair value of Dominion’s, Virginia Power’s and Dominion Gas’ interest rate derivatives at March 31, 2016. As of December 31, 2015, Dominion, Virginia Power and Dominion Gas had $4.6 billion, $2.0 billion and $250 million, respectively, in aggregate notional amounts of these interest rate derivatives outstanding. A hypothetical 10% decrease in market interest rates would have resulted in a decrease of $71 million, $52 million and $2 million, respectively, in the fair value of Dominion’s, Virginia Power’s and Dominion Gas’ interest rate derivatives at December 31, 2015.

The impact of a change in interest rates on the Companies’ interest rate-based financial derivative instruments at a point in time is not necessarily representative of the results that will be realized when the contracts are ultimately settled. Net gains and/or losses from interest rate derivative instruments used for hedging purposes, to the extent realized, will generally be offset by recognition of the hedged transaction.

Investment Price Risk

Dominion and Virginia Power are subject to investment price risk due to securities held as investments in nuclear decommissioning and rabbi trust funds that are managed by third-party investment managers. These trust funds primarily hold marketable securities that are reported in Dominion’s and Virginia Power’s Consolidated Balance Sheets at fair value.

Dominion recognized net realized gains (including investment income) on nuclear decommissioning and rabbi trust investments of $28 million and $60 million for the three months ended March 31, 2016 and 2015, respectively, and $184 million for the year ended December 31, 2015. Net realized gains and losses include gains and losses from the sale of investments as well as any other-than-temporary declines in fair value. Dominion recorded, in AOCI and regulatory liabilities, a net increase in unrealized gains on these investments of $38 million for the three months ended March 31, 2016. Dominion recorded in AOCI and regulatory liabilities, a net decrease in unrealized gains on these investments of $3 million for the three months ended March 31, 2015 and $157 million for the year ended December 31, 2015.

Virginia Power recognized net realized gains (including investment income) on nuclear decommissioning trust investments of $13 million and $17 million for the three months ended March 31, 2016 and 2015, respectively, and $88 million for the year ended December 31, 2015. Net realized gains and losses include gains and losses from the sale of investments as well as any other-than-temporary declines in fair value. Virginia Power recorded, in AOCI and regulatory liabilities, a net increase in unrealized gains on these investments of $23 million and $3 million for the three months ended March 31, 2016 and 2015, respectively, and a net decrease in unrealized gains on these investments of $76 million for the year ended December 31, 2015.

Dominion sponsors pension and other postretirement employee benefit plans that hold investments in trusts to fund employee benefit payments. Virginia Power and Dominion Gas employees participate in these plans. Differences between actual and expected returns on plan assets are accumulated and amortized during future periods. As such, any investment-related declines in these trusts will result in future increases in the net periodic cost recognized for employee benefit plans and will be included in the determination of the amount of cash to be contributed to the employee benefit plans.

ITEM 4. CONTROLS AND PROCEDURES

Senior management of each of Dominion, Virginia Power, and Dominion Gas, including Dominion’s, Virginia Power’s, and Dominion Gas’ CEO and CFO, evaluated the effectiveness of each of their respective Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, each of Dominion’s, Virginia Power’s, and Dominion Gas’ CEO and CFO have concluded that each of their respective Company’s disclosure controls and procedures are effective.

There were no changes in Dominion’s, Virginia Power’s, or Dominion Gas’ internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Companies’ internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Companies are alleged to be in violation or in default under orders, statutes, rules or regulations relating to the environment, compliance plans imposed upon or agreed to by the Companies, or permits issued by various local, state and/or federal agencies for the construction or operation of facilities. Administrative proceedings may also be pending on these matters. In addition, in the ordinary course of business, the Companies and their subsidiaries are involved in various legal proceedings.

See the following for discussions on various environmental and other regulatory proceedings to which the Companies are a party:

•

Notes 13 and 22 to the Consolidated Financial Statements and Future Issues and Other Matters in MD&A in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015, which information is incorporated herein by reference, for discussion of various environmental and other regulatory proceedings to which the Companies are a party.

•

Notes 12 and 15 in this report, which information is incorporated herein by reference, for discussion of various environmental and other regulatory proceedings to which the Companies are a party.

ITEM 1A. RISK FACTORS

The Companies businesses are influenced by many factors that are difficult to predict, involve uncertainties that may materially affect actual results and are often beyond the Companies’ control. A number of these risk factors have been identified in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015, which should be taken into consideration when reviewing the information contained in this report. There have been no material changes with regard to the risk factors previously disclosed in the Companies’ Annual Report on Form 10-K for the year ended December 31, 2015. For other factors that may cause actual results to differ materially from those indicated in any forward-looking statement or projection contained in this report, see Forward-Looking Statements in MD&A.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Dominion

ISSUER PURCHASES OF EQUITY SECURITIES


Period	Total Number of Shares (or Units) Purchased ⁽¹⁾		Average Price Paid per Share (or Unit) ⁽²⁾		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased under the Plans or Programs ⁽³⁾
1/1/16-1/31/16		2,013	$	67.64		—	19,629,059 shares/ $1.18 billion
2/1/16-2/29/16		105,109		70.17		—	19,629,059 shares/ $1.18 billion
3/1/16-3/31/16		447		69.99		—	19,629,059 shares/ $1.18 billion

Total		107,569	$	70.12		—	19,629,059 shares/ $1.18 billion

(1)

In January, February and March 2016, 2,013 shares, 99,602 shares and 447 shares, respectively, were tendered by employees to satisfy tax withholding obligations on vested restricted stock. In February 2016, 5,507 shares were retained to satisfy tax withholding obligations under Dominion’s Deferred Compensation Plan.

(2)	Represents the weighted-average price paid per share.

(3)

The remaining repurchase authorization is pursuant to repurchase authority granted by the Dominion Board of Directors in February 2005, as modified in June 2007. The aggregate authorization granted by the Dominion Board of Directors was 86 million shares (as adjusted to reflect a two-for-one stock split distributed in November 2007) not to exceed $4 billion.

ITEM 6. EXHIBITS


Exhibit Number	Description	Dominion	Virginia Power	Dominion Gas

3.1.a	Dominion Resources, Inc. Articles of Incorporation as amended and restated, effective May 20, 2010 (Exhibit 3.1, Form 8-K filed May 20, 2010, File No. 1-8489).	X

3.1.b	Virginia Electric and Power Company Amended and Restated Articles of Incorporation, as in effect on October 30, 2014 (Exhibit 3.1.b, Form 10-Q filed November 3, 2014, File No. 1-2255).		X

3.1.c	Articles of Organization of Dominion Gas Holdings, LLC (Exhibit 3.1, Form S-4 filed April 4, 2014, File No. 333-195066).			X

3.2.a	Dominion Resources, Inc. Amended and Restated Bylaws, effective December 17, 2015 (Exhibit 3.1, Form 8-K filed December 17, 2015, File No. 1-8489).	X

3.2.b	Virginia Electric and Power Company Amended and Restated Bylaws, effective June 1, 2009 (Exhibit 3.1, Form 8-K filed June 3, 2009, File No. 1-2255).		X

3.2.c	Operating Agreement of Dominion Gas Holdings, LLC dated as of September 12, 2013 (Exhibit 3.2, Form S-4 filed April 4, 2014, File No. 333-195066).			X

4	Dominion Resources, Inc., Virginia Electric and Power Company and Dominion Gas Holdings, LLC agree to furnish to the Securities and Exchange Commission upon request any other instrument with respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of either of their total consolidated assets.	X	X	X

4.1	Indenture, dated as of June 1, 2015, between Dominion Resources, Inc. and Deutsche Bank Trust Company Americas, as Trustee (Exhibit 4.1, Form 8-K filed June 15, 2015, File No. 1-8489); First Supplemental Indenture, dated as of June 1, 2015 (Exhibit 4.2, Form 8-K filed June 15, 2015, File No. 1-8489); Second Supplemental Indenture, dated as of September 1, 2015 (Exhibit 4.2, Form 8-K filed September 24, 2015, File No. 1-8489); Third Supplemental Indenture, dated as of February 1, 2016 (Exhibit 4.7, Form 10-K for the fiscal year ended December 31, 2015 filed February 26, 2016, File No. 1-8489).	X

4.2	Junior Subordinated Indenture II, dated June 1, 2006, between Dominion Resources, Inc. and The Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A.), as Trustee (Exhibit 4.1, Form 10-Q for the quarter ended June 30, 2006 filed August 3, 2006, File No. 1-8489); First Supplemental Indenture dated as of June 1, 2006 (Exhibit 4.2, Form 10-Q for the quarter ended June 30, 2006 filed August 3, 2006, File No. 1-8489); Second Supplemental Indenture, dated as of September 1, 2006 (Exhibit 4.2, Form 10-Q for the quarter ended September 30, 2006 filed November 1, 2006, File No. 1-8489); Fourth Supplemental Indenture, dated as of June 1, 2013 (Exhibit 4.3, Form 8-K filed June 7, 2013, File No. 1-8489); Fifth Supplemental Indenture, dated as of June 1, 2013 (Exhibit 4.4, Form 8-K filed June 7, 2013, File No. 1-8489); Sixth Supplemental Indenture, dated as of June 1, 2014 (Exhibit 4.3, Form 8-K filed July 1, 2014, File No. 1-8489); Seventh Supplemental Indenture, dated as of September 1, 2014 (Exhibit 4.3, Form 8-K filed October 3, 2013, File No. 1-8489); Eighth Supplemental Indenture, dated March 7, 2016 (Exhibit 4.4, Form 8-K filed March 7, 2016, File No. 1-8489).	X


Exhibit Number	Description	Dominion	Virginia Power	Dominion Gas

4.3	Form of Senior Indenture, dated June 1, 1998, between Virginia Electric and Power Company and The Bank of New York Mellon (as successor trustee to JP Morgan Chase Bank (formerly The Chase Manhattan Bank)), as Trustee (Exhibit 4(iii), Form S-3 Registration Statement filed February 27, 1998, File No. 333-47119); Form of Tenth Supplemental Indenture, dated December 1, 2003 (Exhibit 4.3, Form 8-K filed December 4, 2003, File No. 1-2255); Form of Twelfth Supplemental Indenture, dated January 1, 2006 (Exhibit 4.2, Form 8-K filed January 12, 2006, File No. 1-2255); Form of Thirteenth Supplemental Indenture, dated as of January 1, 2006 (Exhibit 4.3, Form 8-K filed January 12, 2006, File No. 1-2255); Form of Fourteenth Supplemental Indenture, dated May 1, 2007 (Exhibit 4.2, Form 8-K filed May 16, 2007, File No. 1-2255); Form of Fifteenth Supplemental Indenture, dated September 1, 2007 (Exhibit 4.2, Form 8-K filed September 10, 2007, File No. 1-2255); Form of Seventeenth Supplemental Indenture, dated November 1, 2007 (Exhibit 4.3, Form 8-K filed November 30, 2007, File No. 1-2255); Form of Eighteenth Supplemental Indenture, dated April 1, 2008 (Exhibit 4.2, Form 8-K filed April 15, 2008, File No. 1-2255); Form of Nineteenth Supplemental and Amending Indenture, dated November 1, 2008 (Exhibit 4.2, Form 8-K filed November 5, 2008, File No. 1-2255); Form of Twentieth Supplemental Indenture, dated June 1, 2009 (Exhibit 4.3, Form 8-K filed June 24, 2009, File No. 1-2255); Form of Twenty-First Supplemental Indenture, dated August 1, 2010 (Exhibit 4.3, Form 8-K filed September 1, 2010, File No. 1-2255); Twenty-Second Supplemental Indenture, dated as of January 1, 2012 (Exhibit 4.3, Form 8-K filed January 12, 2012, File No. 1-2255); Twenty-Third Supplemental Indenture, dated as of January 1, 2013 (Exhibit 4.3, Form 8-K filed January 8, 2013, File No. 1-2255); Twenty-Fourth Supplemental Indenture, dated as of January 1, 2013 (Exhibit 4.4, Form 8-K filed January 8, 2013, File No. 1-2255); Twenty-Fifth Supplemental Indenture, dated as of March 1, 2013 (Exhibit 4.3, Form 8-K filed March 14, 2013, File No. 1-2255); Twenty-Sixth Supplemental Indenture, dated as of August 1, 2013 (Exhibit 4.3, Form 8-K filed August 15, 2013, File No. 1-2255); Twenty-Seventh Supplemental Indenture, dated February 1, 2014 (Exhibit 4.3, Form 8-K filed February 7, 2014, File No. 1-2255); Twenty-Eighth Supplemental Indenture, dated February 1, 2014 (Exhibit 4.4, Form 8-K filed February 7, 2014, File No. 1-2255); Twenty-Ninth Supplemental Indenture, dated May 1, 2015 (Exhibit 4.3, Form 8-K filed May 13, 2015, File No. 1-02255); Thirtieth Supplemental Indenture, dated May 1, 2015 (Exhibit 4.4, Form 8-K filed May 13, 2015, File No. 1-02255); Thirty-First Supplemental Indenture, dated January 1, 2016 (Exhibit 4.3, Form 8-K filed January 14, 2016, File No. 000-55337).	X	X

10.1*	2016 Performance Grant Plan under 2016 Long-Term Incentive Program approved January 21, 2016 (Exhibit 10.47, Form 10-K for the fiscal year ended December 31, 2015 filed February 26, 2016, File No. 1-8489).	X	X	X

10.2*	Form of Restricted Stock Award Agreement under the 2016 Long-term Incentive Program approved January 21, 2016 (Exhibit 10.48, Form 10-K for the fiscal year ended December 31, 2015 filed February 26, 2016, File No. 1-8489).	X	X	X

12.1	Ratio of earnings to fixed charges for Dominion Resources, Inc. (filed herewith).	X

12.2	Ratio of earnings to fixed charges for Virginia Electric and Power Company (filed herewith).		X

12.3	Ratio of earnings to fixed charges for Dominion Gas Holdings, LLC (filed herewith).			X

31.a	Certification by Chief Executive Officer of Dominion Resources, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).	X

31.b	Certification by Chief Financial Officer of Dominion Resources, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).	X


Exhibit Number	Description	Dominion	Virginia Power	Dominion Gas

31.c	Certification by Chief Executive Officer of Virginia Electric and Power Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).		X

31.d	Certification by Chief Financial Officer of Virginia Electric and Power Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).		X

31.e	Certification by Chief Executive Officer of Dominion Gas Holdings, LLC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).			X

31.f	Certification by Chief Financial Officer of Dominion Gas Holdings, LLC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).			X

32.a	Certification to the Securities and Exchange Commission by Chief Executive Officer and Chief Financial Officer of Dominion Resources, Inc. as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).	X

32.b	Certification to the Securities and Exchange Commission by Chief Executive Officer and Chief Financial Officer of Virginia Electric and Power Company as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).		X

32.c	Certification to the Securities and Exchange Commission by Chief Executive Officer and Chief Financial Officer of Dominion Gas Holdings, LLC as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).			X

99	Condensed consolidated earnings statements (filed herewith).	X	X	X

101	The following financial statements from Dominion Resources, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed on May 5, 2016, formatted in XBRL: (i) Consolidated Statements of Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statement of Equity, (iv) Consolidated Statements of Comprehensive Income (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements. The following financial statements from Virginia Electric and Power Company’s and Dominion Gas Holdings, LLC’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed on May 5, 2016, formatted in XBRL: (i) Consolidated Statements of Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Comprehensive Income (iv) Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements.	X	X	X

*	Indicates management contract or compensatory plan or arrangement

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


				DOMINION RESOURCES, INC. Registrant

May 5, 2016				/s/ Michele L. Cardiff
				Michele L. Cardiff Vice President, Controller and Chief Accounting Officer

				VIRGINIA ELECTRIC AND POWER COMPANY Registrant

May 5, 2016				/s/ Michele L. Cardiff
				Michele L. Cardiff Vice President, Controller and Chief Accounting Officer

				DOMINION GAS HOLDINGS, LLC Registrant

May 5, 2016				/s/ Michele L. Cardiff
				Michele L. Cardiff Vice President, Controller and Chief Accounting Officer

EXHIBIT INDEX


Exhibit Number	Description	Dominion	Virginia Power	Dominion Gas

3.1.a	Dominion Resources, Inc. Articles of Incorporation as amended and restated, effective May 20, 2010 (Exhibit 3.1, Form 8-K filed May 20, 2010, File No. 1-8489).	X

3.1.b	Virginia Electric and Power Company Amended and Restated Articles of Incorporation, as in effect on October 30, 2014 (Exhibit 3.1.b, Form 10-Q filed November 3, 2014, File No. 1-2255).		X

3.1.c	Articles of Organization of Dominion Gas Holdings, LLC (Exhibit 3.1, Form S-4 filed April 4, 2014, File No. 333-195066).			X

3.2.a	Dominion Resources, Inc. Amended and Restated Bylaws, effective December 17, 2015 (Exhibit 3.1, Form 8-K filed December 17, 2015, File No. 1-8489).	X

3.2.b	Virginia Electric and Power Company Amended and Restated Bylaws, effective June 1, 2009 (Exhibit 3.1, Form 8-K filed June 3, 2009, File No. 1-2255).		X

3.2.c	Operating Agreement of Dominion Gas Holdings, LLC dated as of September 12, 2013 (Exhibit 3.2, Form S-4 filed April 4, 2014, File No. 333-195066).			X

4	Dominion Resources, Inc., Virginia Electric and Power Company and Dominion Gas Holdings, LLC agree to furnish to the Securities and Exchange Commission upon request any other instrument with respect to long-term debt as to which the total amount of securities authorized does not exceed 10% of either of their total consolidated assets.	X	X	X

4.1	Indenture, dated as of June 1, 2015, between Dominion Resources, Inc. and Deutsche Bank Trust Company Americas, as Trustee (Exhibit 4.1, Form 8-K filed June 15, 2015, File No. 1-8489); First Supplemental Indenture, dated as of June 1, 2015 (Exhibit 4.2, Form 8-K filed June 15, 2015, File No. 1-8489); Second Supplemental Indenture, dated as of September 1, 2015 (Exhibit 4.2, Form 8-K filed September 24, 2015, File No. 1-8489); Third Supplemental Indenture, dated as of February 1, 2016 (Exhibit 4.7, Form 10-K for the fiscal year ended December 31, 2015 filed February 26, 2016, File No. 1-8489).	X

4.2	Junior Subordinated Indenture II, dated June 1, 2006, between Dominion Resources, Inc. and The Bank of New York Mellon (successor to JPMorgan Chase Bank, N.A.), as Trustee (Exhibit 4.1, Form 10-Q for the quarter ended June 30, 2006 filed August 3, 2006, File No. 1-8489); First Supplemental Indenture dated as of June 1, 2006 (Exhibit 4.2, Form 10-Q for the quarter ended June 30, 2006 filed August 3, 2006, File No. 1-8489); Second Supplemental Indenture, dated as of September 1, 2006 (Exhibit 4.2, Form 10-Q for the quarter ended September 30, 2006 filed November 1, 2006, File No. 1-8489); Fourth Supplemental Indenture, dated as of June 1, 2013 (Exhibit 4.3, Form 8-K filed June 7, 2013, File No. 1-8489); Fifth Supplemental Indenture, dated as of June 1, 2013 (Exhibit 4.4, Form 8-K filed June 7, 2013, File No. 1-8489); Sixth Supplemental Indenture, dated as of June 1, 2014 (Exhibit 4.3, Form 8-K filed July 1, 2014, File No. 1-8489); Seventh Supplemental Indenture, dated as of September 1, 2014 (Exhibit 4.3, Form 8-K filed October 3, 2013, File No. 1-8489); Eighth Supplemental Indenture, dated March 7, 2016 (Exhibit 4.4, Form 8-K filed March 7, 2016, File No. 1-8489).	X


Exhibit Number	Description	Dominion	Virginia Power	Dominion Gas

4.3	Form of Senior Indenture, dated June 1, 1998, between Virginia Electric and Power Company and The Bank of New York Mellon (as successor trustee to JP Morgan Chase Bank (formerly The Chase Manhattan Bank)), as Trustee (Exhibit 4(iii), Form S-3 Registration Statement filed February 27, 1998, File No. 333-47119); Form of Tenth Supplemental Indenture, dated December 1, 2003 (Exhibit 4.3, Form 8-K filed December 4, 2003, File No. 1-2255); Form of Twelfth Supplemental Indenture, dated January 1, 2006 (Exhibit 4.2, Form 8-K filed January 12, 2006, File No. 1-2255); Form of Thirteenth Supplemental Indenture, dated as of January 1, 2006 (Exhibit 4.3, Form 8-K filed January 12, 2006, File No. 1-2255); Form of Fourteenth Supplemental Indenture, dated May 1, 2007 (Exhibit 4.2, Form 8-K filed May 16, 2007, File No. 1-2255); Form of Fifteenth Supplemental Indenture, dated September 1, 2007 (Exhibit 4.2, Form 8-K filed September 10, 2007, File No. 1-2255); Form of Seventeenth Supplemental Indenture, dated November 1, 2007 (Exhibit 4.3, Form 8-K filed November 30, 2007, File No. 1-2255); Form of Eighteenth Supplemental Indenture, dated April 1, 2008 (Exhibit 4.2, Form 8-K filed April 15, 2008, File No. 1-2255); Form of Nineteenth Supplemental and Amending Indenture, dated November 1, 2008 (Exhibit 4.2, Form 8-K filed November 5, 2008, File No. 1-2255); Form of Twentieth Supplemental Indenture, dated June 1, 2009 (Exhibit 4.3, Form 8-K filed June 24, 2009, File No. 1-2255); Form of Twenty-First Supplemental Indenture, dated August 1, 2010 (Exhibit 4.3, Form 8-K filed September 1, 2010, File No. 1-2255); Twenty-Second Supplemental Indenture, dated as of January 1, 2012 (Exhibit 4.3, Form 8-K filed January 12, 2012, File No. 1-2255); Twenty-Third Supplemental Indenture, dated as of January 1, 2013 (Exhibit 4.3, Form 8-K filed January 8, 2013, File No. 1-2255); Twenty-Fourth Supplemental Indenture, dated as of January 1, 2013 (Exhibit 4.4, Form 8-K filed January 8, 2013, File No. 1-2255); Twenty-Fifth Supplemental Indenture, dated as of March 1, 2013 (Exhibit 4.3, Form 8-K filed March 14, 2013, File No. 1-2255); Twenty-Sixth Supplemental Indenture, dated as of August 1, 2013 (Exhibit 4.3, Form 8-K filed August 15, 2013, File No. 1-2255); Twenty-Seventh Supplemental Indenture, dated February 1, 2014 (Exhibit 4.3, Form 8-K filed February 7, 2014, File No. 1-2255); Twenty-Eighth Supplemental Indenture, dated February 1, 2014 (Exhibit 4.4, Form 8-K filed February 7, 2014, File No. 1-2255); Twenty-Ninth Supplemental Indenture, dated May 1, 2015 (Exhibit 4.3, Form 8-K filed May 13, 2015, File No. 1-02255); Thirtieth Supplemental Indenture, dated May 1, 2015 (Exhibit 4.4, Form 8-K filed May 13, 2015, File No. 1-02255); Thirty-First Supplemental Indenture, dated January 1, 2016 (Exhibit 4.3, Form 8-K filed January 14, 2016, File No. 000-55337).	X	X

10.1*	2016 Performance Grant Plan under 2016 Long-Term Incentive Program approved January 21, 2016 (Exhibit 10.47, Form 10-K for the fiscal year ended December 31, 2015 filed February 26, 2016, File No. 1-8489).	X	X	X

10.2*	Form of Restricted Stock Award Agreement under the 2016 Long-term Incentive Program approved January 21, 2016 (Exhibit 10.48, Form 10-K for the fiscal year ended December 31, 2015 filed February 26, 2016, File No. 1-8489).	X	X	X

12.1	Ratio of earnings to fixed charges for Dominion Resources, Inc. (filed herewith).	X

12.2	Ratio of earnings to fixed charges for Virginia Electric and Power Company (filed herewith).		X

12.3	Ratio of earnings to fixed charges for Dominion Gas Holdings, LLC (filed herewith).			X

31.a	Certification by Chief Executive Officer of Dominion Resources, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).	X

31.b	Certification by Chief Financial Officer of Dominion Resources, Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).	X

31.c	Certification by Chief Executive Officer of Virginia Electric and Power Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).		X

31.d	Certification by Chief Financial Officer of Virginia Electric and Power Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).		X

31.e	Certification by Chief Executive Officer of Dominion Gas Holdings, LLC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).			X


Exhibit Number	Description	Dominion	Virginia Power	Dominion Gas

31.f	Certification by Chief Financial Officer of Dominion Gas Holdings, LLC pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).			X

32.a	Certification to the Securities and Exchange Commission by Chief Executive Officer and Chief Financial Officer of Dominion Resources, Inc. as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).	X

32.b	Certification to the Securities and Exchange Commission by Chief Executive Officer and Chief Financial Officer of Virginia Electric and Power Company as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).		X

32.c	Certification to the Securities and Exchange Commission by Chief Executive Officer and Chief Financial Officer of Dominion Gas Holdings, LLC as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).			X

99	Condensed consolidated earnings statements (filed herewith).	X	X	X

101	The following financial statements from Dominion Resources, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed on May 5, 2016, formatted in XBRL: (i) Consolidated Statements of Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statement of Equity, (iv) Consolidated Statements of Comprehensive Income, (v) Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements. The following financial statements from Virginia Electric and Power Company’s and Dominion Gas Holdings, LLC’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, filed on May 5, 2016, formatted in XBRL: (i) Consolidated Statements of Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, and (v) the Notes to Consolidated Financial Statements.	X	X	X

*	Indicates management contract or compensatory plan or arrangement

TABLE OF CONTENTS

Part I. Financial Informationprint Item 1. Financial Statementsprint Note 1. Nature Of Operationsprint Note 2. Significant Accounting Policiesprint Note 3. Acquisitions and Dispositionsprint Note 4. Operating Revenueprint Note 5. Income Taxesprint Note 6. Earnings Per Shareprint Note 7. Accumulated Other Comprehensive Incomeprint Note 8. Fair Value Measurementsprint Note 9. Derivatives and Hedge Accounting Activitiesprint Note 10. Investmentsprint Note 11. Regulatory Assets and Liabilitiesprint Note 12. Regulatory Mattersprint Note 13. Variable Interest Entitiesprint Note 14. Significant Financing Transactionsprint Note 15. Commitments and Contingenciesprint Note 16. Credit Riskprint Note 17. Related-party Transactionsprint Note 18. Employee Benefit Plansprint Note 19. Operating Segmentsprint Item 2. Management S Discussion and Analysisprint Item 4. Controls and Proceduresprint Part II. Other Informationprint Item 1. Legal Proceedingsprint Item 1A. Risk Factorsprint Item 2. Unregistered Sales Of Equity Securities and Use Of Proceedsprint Item 6. Exhibitsprint

DIRECTORS	AGE	BIO	OTHER DIRECTOR MEMBERSHIPS
William H Runge	73	MEMBERS • Mr. Onorato (Chair) • Mr. Bruckmann • Mr. Engquist • Mr. Runge QUALIFICATIONS • The Board of Directors has determined that Mr. Onorato is qualified as an audit committee financial expert within the meaning of applicable SEC regulations and has all the requisite accounting and financial expertise within the meaning of the listing standards of the NYSE. • All members of the Audit Committee are independent within the meaning of the standards for independence set forth in the Company’s corporate governance guidelines, which are consistent with applicable SEC rules and NYSE corporate governance standards.
Karen A Smith Bogart	67	INDEPENDENT DIRECTOR since May 2011 AGE 67 BOARD COMMITTEES • Compensation • Nominating & Corporate Governance (Chair) QUALIFICATIONS Dr. Bogart brings broad executive experience, including in the consumer products sector and in Asia, with domestic and multi-national public and private companies in various industries, together with service on another public company board of directors.
Joseph A Onorato	76	AUDIT COMMITTEE FINANCIAL EXPERT INDEPENDENT DIRECTOR since February 2008 AGE 76 BOARD COMMITTEES • Audit (Chair) • Compensation REASON FOR NOMINATION Mr. Onorato brings significant executive and financial experience with public, global manufacturing companies, including service as both a Chief Financial Officer and as a Treasurer, together with service on another public company board of directors.
John M Engquist	71	In deciding that a combined Chairman and Chief Executive Officer position is the appropriate leadership structure for the Company at this time, the Governance Committee and Board of Directors also recognized the benefit of independent leadership to enhance the effectiveness of the Board’s oversight role. Accordingly, in February 2023, our Governance Committee and Board of Directors adopted amended and restated Corporate Governance Guidelines that, among other things, established the role of Lead Independent Director. Mr. Engquist was subsequently appointed by the Board to serve as the Company’s first Lead Independent Director and was re-appointed to this role in February 2025.
Jerry W Burris	61	INDEPENDENT DIRECTOR since February 2022 AGE 61 BOARD COMMITTEES • Compensation • Nominating & Corporate Governance QUALIFICATIONS Mr. Burris brings significant executive leadership experience in management of global manufacturing operations and related processes, such as supply chain management, quality control and product development, together with service on another public company board of directors.	nVent Electric plc
Bruce C Bruckmann	71	MEMBERS • Mr. Onorato (Chair) • Mr. Bruckmann • Mr. Engquist • Mr. Runge QUALIFICATIONS • The Board of Directors has determined that Mr. Onorato is qualified as an audit committee financial expert within the meaning of applicable SEC regulations and has all the requisite accounting and financial expertise within the meaning of the listing standards of the NYSE. • All members of the Audit Committee are independent within the meaning of the standards for independence set forth in the Company’s corporate governance guidelines, which are consistent with applicable SEC rules and NYSE corporate governance standards.
Bernard P Thiers	69	DIRECTOR since February 2024 AGE 69 QUALIFICATIONS Mr. Thiers, as a former executive officer of the Company, brings nearly 40 years of management and executive experience in the flooring industry generally and in the Company’s Flooring Rest of the World segment specifically.

Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)		Total ($)
Jeffrey S. Lorberbaum Chief Executive Officer		2024		1,429,764		—		1,699,963		1,629,419		19,037		4,778,183
		2023		1,388,121		—		1,069,537		1,951,478		19,281		4,428,417
		2022		1,347,690		—		2,055,992		836,915		19,357		4,259,954
W. Christopher Wellborn President and Chief Operating Officer		2024		1,247,422		—		1,483,186		1,421,614		16,227		4,168,448
		2023		1,211,089		—		3,769,907		1,691,873		16,136		6,689,005
		2022		1,164,509		—		1,776,485		723,160		15,838		3,679,992
James F. Brunk Chief Financial Officer		2024		741,164		—		760,328		695,603		17,854		2,214,949
		2023		683,100		—		458,300		713,215		17,128		1,871,742
		2022		621,000		—		646,094		321,368		16,005		1,604,467
Paul F. De Cock President — Flooring North America		2024		824,797		—		837,453		1,059,561		21,541		2,743,352
		2023		774,457		—		491,623		716,065		21,973		2,004,118
		2022		751,900		—		922,855		338,355		22,180		2,035,290
Mauro Vandini President — Global Ceramic		2024		876,704		—		1,931,874		883,440		254,657		3,946,676

Customer name	Ticker
Ameren Corporation	AEE
American Axle & Manufacturing Holdings, Inc.	AXL
Cabot Corporation	CBT
CMS Energy Corporation	CMS
Consolidated Edison, Inc.	ED
Dover Corporation	DOV
DTE Energy Company	DTE
Duke Energy Corporation	DUK
Edison International	EIX
Entergy Corporation	ETR
EQT Corporation	EQT
Exelon Corporation	EXC
FirstEnergy Corp.	FE
Ford Motor Company	F
MDU Resources Group, Inc.	MDU
ONEOK, Inc.	OKE
Pinnacle West Capital Corporation	PNW
PPL Corporation	PPL
PROGRESS ENERGY INC	PREX
Public Service Enterprise Group Incorporated	PEG
The Southern Company	SO
The Williams Companies, Inc.	WMB

Supplier name	Ticker
Exxon Mobil Corporation	XOM
Chevron Corporation	CVX
Canaan Inc.	CAN
Honeywell International Inc.	HON
3M Company	MMM
General Electric Company	GE
Duke Energy Corporation	DUK
The Southern Company	SO
Air Products and Chemicals, Inc.	APD
ABB Ltd	ABB
Eaton Corporation plc	ETN

Owner	Position	Direct Shares	Indirect Shares
WELLBORN CHISTOPHER	-	210,731	0
WELLBORN CHISTOPHER	-	194,286	0
De Cock Paul F	-	54,677	0
De Cock Paul F	-	49,648	0
LORBERBAUM JEFFREY S	-	42,340	194
Brunk James	-	22,863	185
Smith-Bogart Karen A	-	18,628	0
Brunk James	-	14,803	185
Patton Rodney David	-	14,208	0
Patton Rodney David	-	13,054	0
RUNGE WILLIAM HENRY III	-	12,792	0
Coni Claudio	-	1,803	0
HELEN SUZANNE L	-	0	141,646
HELEN SUZANNE L	-	0	141,646

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