Good morning and welcome to Dominion's First Quarter Earnings Conference Call. We have with us today Tom Farrell, Chairman, President, and Chief Executive Officer, and Tom Chewning, Chief Financial Officer, as well as other members of management. Please be aware that each of your lines is in a listen-only mode. At the conclusion of the prepared remarks, we will open the floor for questions. At that time, instructions will be given for the procedure to follow if you would like to ask a question. I would now like to pass the call over to Laura Kottkamp, Director of Investor Relations. Laura?

Thanks, Lincy. Good morning and welcome to our first quarter conference call. During this call, we will refer to certain schedules included in this morning's earnings release and pages from our first quarter 2008 earnings release kit. Schedules in the earnings release kit are intended to answer the more detailed discreet questions pertaining to operating statistics and accountings. Investor Relations will be available after the call for any clarification of these schedules. While we encourage you to call with questions in the time permitted after our prepared remarks, we ask that you use the time to address questions of a strategic nature or those related to second quarter 2008 guidance. If you have not done so, I encourage you to visit our website, register for e-mail alerts, and view our first quarter 2008 earnings documents. Our website address is www.dom.com/investors. Now for the usual cautionary language. The earnings release and other matters that will be discussed on the call today may contain forward-looking statements and estimates that are subject to various risks and uncertainties. Please refer to our SEC filings, including our most recent Annual Report on Form 10-K and quarterly report on Form 10-Q for a discussion of factors that may cause results to differ from management's projections, forecasts, estimates, and expectations. Also in this call, we will discuss some measures about our company's performance that differ from those recognized by GAAP. Those measures include operating earnings before interest and tax, commonly referred to as EBIT. Dominion uses operating earnings as the primary performance measurement of its earnings outlook and results for public communications with analysts and investors. Dominion also uses operating earnings internally for budgeting, for reporting to the Board of Directors, for the company's incentive compensation plans, and for its targeted dividend payouts. Dominion management believes operating earnings provide a more meaningful representation of the company's fundamental earnings power. As a remainder, our 2008 results exclude any earnings from Peoples Natural Gas and Hope Gas. Reconciliations of such measures to the most directly comparable GAAP financial measures we are able to calculate and report are contained in our earnings release kit. I will now turn the call over to our CFO, Tom Chewning. Tom?

Thank you, Laura, and good morning everyone. Following an overview of first quarter earnings and second quarter operating earnings guidance, each of our business unit CEOs will provide a review of first quarter performance, as well as what they foresee for the second quarter. After the conclusion of these reviews, our CEO, Tom Farrell, will offer updates on strategic projects and regulatory proceedings, including the Virginia City coal and biomass plant. Following Tom's remarks, we will be happy to answer your questions. Dominion had a very positive first quarter of 2008. Recorded GAAP earnings were $1.18 per share and operating earnings were $1 per share. Please see schedules two and three of our earnings release kit for a reconciliation of operating earnings to GAAP earnings. Adjusting operating earnings for the impacts of unfavorable weather and a favorable tax benefit, operating earnings would have been $0.97 per share, $0.03 above the upper-end of quarterly guidance range. You can find this reconciliation on Dominion's Investor Relations website under our supplemental schedules. You can find complete reconciliation of operating earnings compared to quarterly guidance on pages 32 through 36 of this morning's earnings release kit. While we are obviously pleased with our performance for the first three months of the year under our realigned business model, we feel it would be premature at this time to revise upward our $3.05 to $3.15 operating earnings per share guidance for the full-year 2008 or our 2009 outlook of $3.25 to $3.40 per share. Dominion expects second quarter 2008's operating earnings in the range of $0.47 to $0.52 per share. This compares to operating earnings of $0.44 per share in the second quarter of 2007. Drivers expected to compare favorably to 2007 include full recovery of Virginia fuel expenses, higher volumes, and higher realized prices for our remaining E&P operations, lower interest expense, and lower share count. Expected offsets include the absence of earnings from our divested US E&P operations, return to normal weather in our electric utility service area, higher maintenance and depreciation expenses in our electric utility businesses, and the exclusion of earnings from Peoples Natural Gas and Hope Gas. Complete details of the company's second quarter 2008 guidance can be found on pages 39 through 43 of Dominion's first quarter 2008 earnings release kit published this morning on Dominion's website. That concludes my review of the quarter and my overview of the second quarter. I will now turn the call over to Jay Johnson. Jay?

Thank you, Tom. Our regulated electric transmission and distribution businesses delivered strong operational performance throughout the quarter. We continue to see steady improvement in reliability. Average minutes off per customer for the previous 12 months stands at 123.7 minutes. This represents a 10% improvement form just three years ago. We also experienced continuous improvement in our safety performances compared to Q1 of 2007. OSHA recordable incident rates dropped from 2.7 to 1.8 and vehicle accidents were reduced from 22 to 12 year-over-year. Dominion Virginia Power's weather normalized financial performance in the first quarter was toward the upper-end of the EBIT guidance range. Heating degree days in our service area were 10% below normal, which adversely impacted revenues. We also experienced twice the number... twice the normal number of significant wind events for this time of the year, which drove up O&M expenses. Strong Dominion retail performance attributable to higher gas margins helped offset these weather and windstorm challenges. In our second quarter guidance, we are assuming a return to normal weather and normal storm activity. O&M expenses will be higher than last year due to the execution of targeted investments in reliability and energy conservation demand side management pilot programs. As mentioned on the January 30 earnings conference call, these increases are included in our 2008 annual guidance. I'll now turn the call over to Paul Koonce. Paul?

Thanks, Jay. Like Dominion Virginia Power, Dominion Energy’s safety performance continues to improve. During the first quarter, we experienced non-fewer loss time and restricted duty accidents as compared to the first quarter of 2007. And before we turn to operations, I'm pleased to report that Dominion Transmission was once again ranked by the industry's [inaudible] survey as number one in customer service for all pipelines serving mid-Atlantic and North East markets. This is a distinction that Dominion Transmission has enjoyed since 2005. Operationally, transmission, distribution, and E&P all realized higher volumes and throughput gains. Despite concerns over an economic downturn, Dominion East Ohio experienced 3.7% Q1 throughput increase versus last year, driven largely by increased industrial demand. Dominion Transmission's gathered volumes were 7% higher quarter-over-quarter, a reflection of the Appalachian Basin production activity, and Dominion E&P, excluding royalty interest production, recorded 20% more gas equivalent than in Q1 2007. Also during the quarter, we continued to invest in our businesses and worked with our customers and regulators to ensure future growth in both volumes and earnings. At Dominion East Ohio, we installed over 80,000 automated meters and are on pace to install over 230,000 automated meters by year-end. Dominion Transmission executed tenure agreements for our Hub III project to move over 200,000 MMBtu per day from our Interconnect with the Rockies Express pipeline. When combined with our Hub I project already on solid firm, this brings our total takeaway capacity from the Rockies Express pipelines to over 400,000 MMBtu per day, the most of any pipeline. And just last week, we concluded our Appalachian Gateway open season and with very good results. Appalachian Gateway, when completed in late 2011, will increase our gathering capability by 50%, increase our extraction and fractionation capability by 30%, and add almost a half BCF per day of firm transportation. First quarter earnings were above the midpoint of our guidance due to higher by-product margins at Dominion Transmission and better-than-expected industrial and non-traditional sales at Dominion East Ohio, as well as weather help on our traditional sales volumes, and most notably higher E&P production. Somewhat offsetting these gains were higher expected system fuel costs at Dominion Transmission. While we did not meet our margin expectations at Producer Services, we remain poised to capture market opportunities, should they arise during the course of the year. Driving our second quarter earnings are continued higher production and favorable price changes at E&P, as well as strong by-product margins. These favorable factors will be partially offset by higher DD&A. With that, I would like to turn the call over to Mark.

Thank you, Paul. Dominion Generation's strong performance from both our utility and merchant fleets produced first quarter EBIT of $569 million. These results were $20 million above the high-end of our range and $280 million above first quarter '07. The major drivers of these results were a return to full recovery of fuel in Virginia, higher energy and capacity margins for our merchant fleet, and stronger wholesale and other margins in our Virginia Power territory. Helping drive this performance was a nuclear fleet capacity factor of over 99%, that included two record runs, one by Millstone Unit 2, which completed a 504-day breaker-to-breaker run, and the second, Millstone Unit 2, which completed a 524-day breaker-to-breaker run. Our fossil fleet also performed well with Brayton Point achieving a 92% equipment availability rating this quarter, its best in two years, and our Virginia Power coal fleet having the lowest first quarter equivalent forced outage rate in five years. Generation safety performance during the first quarter was also excellent. Our fossil fleet's OSHA recordable incident rate was 0.94, which is the best first quarter on record, and our nuclear fleet achieved a rate of 0.09 with only one OSHA recordable. Looking to second quarter guidance, we project an EBIT range of $325 million to $385 million, the midpoint of which is an increase of approximately $155 million over the second quarter of 2007. We expect this quarter's results to be driven by the return to full recovery of fuel in Virginia and continued growth in margins at our largely hedged merchant portfolio, partially offset by a very heavy plannned outage season for our nuclear and major fossil units. I will now turn the call over to Tom Farrell. Tom?

Thanks, Mark, and good morning. Eight months ago, we emphasized that our strategy was to focus on operational excellence, while advancing a growth plan to address Virginia's increasing energy needs. I am pleased to note that over these last three quarters, we continued to execute successfully on that plan. Jay, Paul, and Mark had mentioned a number of outstanding operational highlights across all of the business units that helped us achieve stellar first quarter earnings. I am going to discuss strategic developments and regulatory hearings that are important to our continuing earnings performance and future growth. In Ohio, we are awaiting resolution of the Dominion East Ohio regulatory proceeding. We combined our request for approval of an automated meter installation and pipeline replacement rider with our base rate case. As a result, the staff report has been delayed, but we expect it to be submitted within the next week. We believe we will have a fair rate structure in place before the end of August that supports the investments in bare steel pipe, service lines, and automated meters needed to better serve our customers and maintain system reliability. The sales process for Peoples and Hope is proceeding on schedule with final bids due by the end of this month. Participation in this auction among potential buyers has been very strong. Recently, Dominion's E&P program has attracted attention, notably for its Marcellus acreage located across the Appalachian Mountains. We now believe we have a minimum of 600,000 to a maximum of 800,000 prospective acres under our control. We are assessing the value of this acreage and determining the best means to capitalize on the potential of these assets. Presently, no reserves are booked from these formations. There are a number of ways in which we can create value, by selling drilling…

Yes, sir, thank you. [Operator Instructions]. Our first question comes from Dan Eggers with Credit Suisse. Please go ahead, sir.

Hi, good morning.

Good morning, Dan.

I choose not to be sneaky about this, but the comments on Central Appalachian E&P outlook, you guys are going to come back to that later, is that correct, you don't want to get into the strategy right now?

Dan, good morning. We are reviewing all of our options and we've been thinking about that. We are evaluating the value of them. And when we have tied down exactly what we are planning on doing, we will announce that. It won't be in the distant future. It will be relatively soon. But, the point I want everybody to understand is that we are not going to recreate old Dominion E&P through Marcellus Shale play. They are very valuable assets, they have been selling for very high values. So, we are going to take a look at whether we sell part of them, promote part of them, hold part of them, it will be some combination of that, but we are not going to recreate the wheel and try to learn how to drill in the Marcellus Shale by ourselves. There are others that have expertise in this kind of geology, which we do not, we happen to have a very, very large position on existing leases. The leases I described are 600,000 to 800,000 acres of leases we already have. We aren't going out and buying up leases. This is part of our existing portfolio. So, we are reviewing it, we are going to do it carefully and we will have some to say about it soon.

Okay. Thank you for clarifying that. I was wondering either Mark or Tom, if you guys could talk a little bit about your thoughts on the NEPOOL market at this point in time or any updated thoughts on NEPOOL market, asset, capacity option, is there any success and make into reevaluate capacity rules around demand response or any updated thinking on your hedge strategy there with running gas prices?

Dan, this is Mark. We still have the same view as we had last quarter when we talk about on NEPOOL market. We are very concerned about the treatment of demand side programs being almost 8% of the projected capacity needs. The NEPOOL... and based on early indications and this next option, there could be even more demand side offered, a fairly significant amount. So, as we said last time, we believe that somehow a portion of that demand side is not going to show up and that will be reflected in higher energy margins. So, in terms of our hedging for energy, we are going to be very cautious in 2010 or 2011 in the North East in terms of closing out our hedge positions since we have a better understanding about this future markets look like.

Okay. Thank you. And then I guess one last one, oil, gas prices were up quite a bit, L&G deliveries to US haven't been that fantastic. I was wondering why, if you could just give us a little color on what you guys are seeing from a volume perspective through Cove Point? Is there any level of interest or growing level of interest around expanding Curve Point?

Dan, good morning. This is Paul Koonce. Yes, you are spot on. There has not been a lot of L&G cargos coming to the United States. And specifically with respect to Cove Point, a lot of that supply was to originate out of the Snowy [ph] field. And I think you've read publicly about [inaudible] production problems as it relates to Snowy. So, we continue to watch with them, just a reminder, we are fully subscribed. So, we are not really throughput motivated, but we would like to see more volumes coming into to the region just for gas requirements generally. If you look down in the 2014, 2015 timeframe, there is a lot of work being done on Atlantic Basin liquefaction, as well as Middle Eastern liquefaction, and we think there will be opportunities to expand Cover Point further, but that sort of Atlantic Basin's spot demand situation needs to improve a little bit.

Let me add one thought to that. You all will have noticed that announced facilities in the Delaware... up to Delaware River have been denied by a spring court case and if the Governor, New York has said he doesn't want one built in Long Island sound. So, it becomes... it is very difficult to put in place a Greenfield L&G importation facility. Cove Point has reactivated, expanded once, the second expansion will be complete in the fourth quarter. It's in the middle of the mid-Atlantic and it is a prime location to get an expansion if the market develops. But, we are not going to go into a build-out another L&G facility that's in merchant status. We will... before we proceed with any further expansions, we will get long-term contracts for the capacity.

Great. Thank you, guys.

Thank you for your questions. Our next question comes from Jonathan Arnold with Merrill Lynch. Please go ahead.

Good morning.

Good morning, Jon.

Can I ask a question on the... following up on the Virginia City comments on the air board process and just how it relates to your fixed price contract on the EPC that you have with I think so... there was a... I remember there was a... I think there was some... from the original filings there were some cutoff date where that fixed price was held to, how long will they wait for this approval to come? How should we think about that, anything you can give us to help on that?

Jonathan, this is Mark. On the pricing of the contract, we had hoped to start construction in April and obviously we are going to be a month or two behind that. In terms of the contract, the first year piece of this contract is largely weighted toward equipment purchases and not labor. The first part of the contract labor costs really revolved around stack contractors. And as we get closer to a start date, we will be talking on schedules and how that might play into an ultimate online date. But, right now, it will be premature for us to say anything in terms of any changes to the existing contract because there may not be any. As we get an air board decision and determine what the appropriate scheduling is for these contractors.

So, is the contract actually executed or does that depend on getting final permits?

[inaudible] contract, they have limited notice to proceed on currently and they are doing that. In terms of actual construction on site, we can only do minimal construction before air permit based on law. And that's what we are doing today. But, those portions of the contract that are under... that are covered under the shawl... a portion of it are also included. The contract is executed.

One related issue, I believe there's been kind of a challenge filed to the constitutionality of the Virginia Legislation requiring you to use Virginia coal in this project. What is... procedurally, where is that? Is it something that while it’s pending, would hold up construction? Any comments on that issue?

Jonathan, the... one of the intervenors filed a notice of appeal of the State Corporation Commission's decision to the Supreme Court of Virginia, which is what I think you are referring to. And that will be presumably one of their arguments, I think that will be... it’s a very problematic argument for them to make in the first place. But, in particular since the commission found that the statute, we don't have to use Virginia coal as a matter of fact, that's an explicit finding in the Commission's ruling. So, they are free to file the appeal and it will not stop the construction from proceeding.

Great. Thank you. Could I just ask one non-Virginia City question, just around your... the way you've hedged your New England portfolio, the base load component, are there any implications of the breakdown and forward heat rates in the market that we should… versus the movements in gas that would cause any of those hedges to be less affected than you had hoped or just something around hedge strategy?

Jonathan, for what we've produced in the hedge table, it’s I think is on page 48, the heat rate issue is not really a factor for us. We've locked in our base load units up there and we have very little margin that comes out of our gas units in North East. It's all essentially driven by the base load units at Brayton Point and Millstone and they are already locked in.

You've looked those in with energy sales as opposed to gas sales.

That's right.

Okay, thank you.

Thank you for questions Mr. Arnold. [Operator Instruction]. Our next question comes from Paul Fremont with Jefferies. Sir, please go ahead.

Thank you. I guess given all the questions that we have heard surrounding the decline in market heat rates in PJM and also speculation or people trying to figure out where the PJM option is going to come out, can we get your comments on both in terms of, do you think that the decline in market heat rates is aberration and would you endorse a possible weaker outcome in terms of option prices in PJM?

To the first question on option prices, I think with the FERC decision to not to approve the new coal price, that will certainly depress the option price and in addition with Ducane leaving and the termination at their supply or at least most of their supply leaves with them, unless they have firm transmission back in, I think that will also depress the price. So, our view is that the price will clear lower than the last option. In terms of the heat rate, it is true, in the first couple of months of the year, the spot rates were narrow than normal in PJM, but that recovered in March. And if you look at going forward, there seems to have normalized. We have very little exposure to that because state line, as you can see from a hedge table, is already hedged and not by gas. And so our only exposure there would be with Bears [ph] and again, it looks like from what we have and what's in our guidance that it's a temporary aberration and looks to be normalizing.

Thank you.

Okay. Thank you for your question, sir. The next question comes from John Kiani with Deutsche Bank. Please go ahead.

Good morning.

Good morning, John.

Can you talk a little about your financing plans and just overall financing strategy perhaps for the next 2 to 3 years or at least through '09 for the CapEx plan?

I will have Scott Hetzer do that.

Thank you.

John, good morning. This is Scott Hetzer. For the remainder of this year, we have a few debt issues planned. Two at Dominion and one at Virginia Power really to replace maturities and to fund a portion of the negative free cash flow. We also have about $200 million of equity modeled in for this year that comes from direct issuance, due to reinvestment, etcetera. For 2008 and 2009, we have modeled in about $800 million of equity in each year and as we have said before we would expect to come to the market in smaller more frequent issues after we've received the appropriate approvals for various growth projects. And then the balance of course will be funded with debt. The maturities for 2009 and 2010 are very minimal.

John, also, we are referring to '09 and '10 are larger years, $800 million scheduling in both, if our existing projects in Virginia particularly proceed as we had expected them to or do expect them to proceed. We won't be going to market without approved projects, in Virginia, through the State Corporation Commission and through FERC, through open seasons and their approval. So, that number is really relative to financing 50-50 the growth projects that we have and so $200 million in '08, which is from a direct investment, $200 million in each of those two years would also be from Dominion Direct, our reinvestment program and then $600 million from the market and smaller increments. Also I would like to point out that on the Virginia projects beginning with our 2009 year, we will be asking for approval for current recovery of projected capital cost on these projects. We are going in… we said in the script, later this year on the North Anna, three projects. We've also, as you know, gone in already and had approval for the coal plant in Southwest Virginia. Does that give you a good idea? I think we have about a $1 billion worth of maturities this year and a very low amount in 2009 and 2010.

Yes. Tom and Scott, that's very helpful. It makes sense. So, obviously your financing plan is contingent on the appropriate approvals and you are going to execute that going forward based on the hopeful approvals of those projects.

That's correct.

And one other question, I know you all were able to execute a contract buyout at some attractive terms last year and it sounded like that was going to be the last one, but I wasn't sure there are a few that are obviously still out there, any interest or potential for additional buyouts or was that probably it for now?

We have two other contracts in Midwest that expire 2012 or 2013 timeframe, one at Kincaid, which is about [inaudible] and the other is at Kewaunee, which is a nuclear plant at Wisconsin. We think there is opportunity with both those contracts. It might [inaudible] take us to the current counter-party as well ourself to discuss that, and so we will continue to do that and let you know if anything materializes.

Okay. That's helpful. So, it sounds like if the terms are there then there is potential for that.

Yes.

Okay. Thank you.

Thank you, John.

Thank you for questions sir. Our next question comes from Paul Patterson with Glenrock Associates. Please go ahead, sir.

Good morning. Can you hear me?

Yes, Paul.

I wanted to ask you guys just on the outlook for reserve margins, in your service territory, you guys have allowed transmission lines, the general transmission lines, power plants, renewables and what have been. Looking out to let’s say 2012, what kind of reserve margin are you guys expecting, assuming that you get approval for pretty much for what you are asking for, which you guys are going to be doing pretty well with the reconstructive environment there?

Are you referencing Virginia?

Yes.

Our resource in Virginia, we are going to beat into the capacity market for 2012 next week and we are about a 1000-megawatt short, so we will be a net importer still in 2012 for Virginia.

Okay. And with... and that assumes how much of the construction that you guys have going on right now or that you guys are projecting?

That assumes that the Ladysmith units, all the operates that we have talked about, there are schedules between now and 2012 and the first combined cycle which we call Bear Garden will be online.

So, that assumes pretty much our four construction plans that has been disclosed between now and 2012 being online.

Okay, that's helpful. And then just with [inaudible] do you guys have sort of a general sense as to what this acreage could provide in terms of reserves?

Yes, but because we are looking at how to value and how other people value, I’d rather keep that to ourselves right at the moment.

Okay.

But, thank you for asking the question.

Just trying to… just looking out for your guys.

I appreciate it.

Thanks a lot.

Thank you for your question sir. Thank you ladies and gentlemen. We have reached the end of our allotted time. Mr. Chewning do you have any closing remarks sir?.

Yes, I have to do. Lincy, thank you. Just a reminder that our Form 10-Q will be filed with the SEC later today and our second quarter earnings release is scheduled for July 31 of this year. We would like to thank everyone for joining us this morning and wish you a very pleasant spring. Good day.

Just a reminder that our Form 10-Q will be filed with the SEC later today and our second quarter earnings release is scheduled for July 31 of this year. We would like to thank everyone for joining us this morning and we wish you a very pleasant spring day. Good day. Thank you this does conclude this morning's teleconference. You may disconnect your line and enjoy your day. Thank you.