Quake, plant outage cut Dominion earnings

Dominion's third-quarter earnings dropped 29 percent due to lower power prices, an earthquake that forced shutdowns at nuclear reactors in Virginia, and an unplanned outage at Millstone Power Station in Waterford.

Reported earnings declined to 69 cents per share, or $392 million, down from 98 cents per share, or $575 million, for the same period last year.

Dominion is the Virginia-based parent company of Dominion Nuclear Connecticut, which owns Millstone.

The company also reported its operating earnings declined by nearly 8 percent, which it considers a more accurate indicator of "fundamental earnings power." For the three months ended Sept. 30, operating earnings dropped to 95 cents a share, or $541 million, compared with $1.03 a share, or $603 million, for the same period in 2010.

The Aug. 23 earthquake, which did not damage the two North Anna reactors in Virginia, forced a shutdown that still has not been lifted by the Nuclear Regulatory Commission. But Chairman, President and Chief Executive Officer Thomas F. Farrell II said in a conference call Friday that he anticipates a restart "within weeks."

At Millstone, the Unit 2 reactor, the older of two operating reactors there, incurred a 14-day outage in which a leak in service-water piping had to be repaired, Farrell said.

Hurricane Irene also caused major outages on Virginia electric transmission and distribution systems, but "outstanding" efforts by employees and neighboring utilities helped restore power, Farrell said.

Combined, the lower margins in power pricing at the nuclear, coal and natural gas power plants, lower weather-related sales in Virginia's regulated electric service territory, and lower contributions from natural gas producer services contributed to the lower earnings, the company said.

Higher electric transmission revenues and increases due to the company buying back shares helped offset those difficulties.

Farrell also said earnings guidance would be adjusted from its previous forecast of $3 to $3.30 per share to a range of $3.05 to $3.20 a share.

Despite the third-quarter setbacks, Dominion expects to deliver 5 to 6 percent annual earnings growth beginning next year, Farrell said, based in part on a wide variety of infrastructure improvements that include completion of the 585-megawatt Virginia City Hybrid Energy Center next summer.

He also reported strong interest in the Cove Point Liquefaction Project, which is in development.

p.daddona@theday.com

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