<PAGE 1>
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, 1996
or
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 1-2255
VIRGINIA ELECTRIC AND POWER COMPANY
(Exact name of registrant as specified in its charter)
VIRGINIA 54-0418825
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
One James River Plaza, Richmond, Virginia 23219 - 3932
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (804) 771-3000
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. Yes x No
At April 30, 1996, 171,484 shares of common stock, without par
value, of the registrant were outstanding.
<PAGE>
<PAGE 2>
VIRGINIA ELECTRIC AND POWER COMPANY
INDEX
Page
Number
PART I. Financial Information
Item 1. Consolidated Financial Statements
Consolidated Statements of Income -
Three Months Ended March 31, 1996
and 1995 3
Consolidated Balance Sheets -
March 31, 1996 and
December 31, 1995 4-5
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1996 and
1995 6
Notes to Consolidated Financial Statements 7-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10-15
PART II. Other Information
Item 1. Legal Proceedings 16
Item 4. Submission of Matters to a Vote of Security
Holders 16
Item 5. Other Information 17
Regulation 17
Sources of Power 17
Item 6. Exhibits and Reports on Form 8-K 18-20
<PAGE>
<PAGE 3>
VIRGINIA ELECTRIC AND POWER COMPANY
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<S>
Three Months Ended
March 31,
1996 1995
(Millions)
<C> <C>
Operating revenues $1,164.8 $1,076.3
Operating expenses:
Operation:
Fuel, net 263.1 254.0
Purchased power capacity, net 194.2 175.9
Other 127.3 136.5
Maintenance 59.6 66.9
Restructuring 5.4 3.5
Depreciation and amortization 124.4 116.3
Amortization of terminated construction
project costs 8.6 8.6
Taxes - Income 80.3 58.1
- Other 70.6 64.7
Total 933.5 884.5
Operating income 231.3 191.8
Other income 2.3 2.4
Income before interest charges 233.6 194.2
Interest charges:
Interest on long-term debt 74.1 74.7
Other 5.7 5.8
Allowance for borrowed funds used
during construction (0.8) (1.3)
Total 79.0 79.2
Distributions-preferred securities of
subsidiary trust, net 1.8
Net income 152.8 115.0
Preferred dividends 9.0 11.7
Balance available for Common Stock $ 143.8 $ 103.3
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
<PAGE 4>
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED BALANCE SHEETS
ASSETS
(UNAUDITED)
<TABLE>
<S>
March 31, December 31,
1996 1995
(Millions)
(*)
Utility plant (includes $304.0 plant
under construction in 1996 and $512.1 <C> <C>
in 1995) $14,262.9 $14,201.6
Less accumulated depreciation 4,880.0 4,760.9
9,382.9 9,440.7
Nuclear fuel, net 143.3 132.4
Net utility plant 9,526.2 9,573.1
Investments:
Nuclear decommissioning trust funds 373.6 351.4
Pollution control project funds 12.0 11.9
Other 21.9 21.0
Total investments 407.5 384.3
Current assets:
Cash and cash equivalents 22.1 29.8
Customer accounts receivable, net 384.3 362.6
Accrued unbilled revenues 154.8 179.5
Materials and supplies:
Plant and general 158.0 160.2
Fossil fuel 44.9 71.2
Other 141.0 133.5
Total current assets 905.1 936.8
Deferred debits and other assets:
Regulatory assets 808.5 816.4
Unamortized debt issuance costs 26.1 26.6
Other 98.5 90.5
Total deferred debits and other
assets 933.1 933.5
Total assets $11,771.9 $11,827.7
</TABLE>
________________
The accompanying notes are an integral part of the consolidated financial
statements.
(*) The consolidated balance sheet at December 31, 1995 has been taken from
the audited consolidated financial statements at that date.
<PAGE>
<PAGE 5>
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS'EQUITY
(UNAUDITED)
<TABLE>
<S>
March 31, December 31,
1996 1995
(Millions)
(*)
<C> <C>
Long-term debt $ 3,590.4 $ 3,889.4
Company obligated mandatorily redeemable
preferred securities of subsidiary trust(**) 135.0 135.0
Preferred stock subject to
mandatory redemption 180.0 180.0
Preferred stock not subject to
mandatory redemption 509.0 509.0
Common stockholder's equity:
Common Stock 2,737.4 2,737.4
Other paid-in capital 16.9 16.9
Earnings reinvested in business 1,321.1 1,272.5
Total common stockholder's
equity 4,075.4 4,026.8
Current liabilities:
Securities due within one year 524.5 259.6
Short-term debt 25.0 169.0
Accounts payable, trade 320.1 310.7
Interest accrued 92.6 101.8
Other 341.8 274.6
Total current liabilities 1,304.0 1,115.7
Deferred credits and other liabilities:
Accumulated deferred income taxes 1,513.9 1,498.8
Deferred investment tax credits 268.0 272.2
Deferred fuel expenses 46.2 57.7
Other 150.0 143.1
Total deferred credits and
other liabilities 1,978.1 1,971.8
Total liabilities and shareholders' equity $11,771.9 $11,827.7
</TABLE>
________________
The accompanying notes are an integral part of the consolidated financial
statements.
(*) The consolidated balance sheet at December 31, 1995 has been taken from
the audited consolidated financial statements at that date.
(**) As described in Note (c) to CONSOLIDATED FINANCIAL STATEMENTS, the 8.05%
Junior Subordinated Notes totaling $139.2 million principal amount constitute
100% of the Trust's assets.
<PAGE>
<PAGE 6>
VIRGINIA ELECTRIC AND POWER COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<S>
Three Months Ended March 31,
1996 1995
(Millions)
Cash flow from operating activities: <C> <C>
Net income $ 152.8 $ 115.0
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 154.7 140.9
Allowance for other funds used during
construction (1.1) (1.8)
Deferred income taxes 16.7 14.1
Deferred investment tax credits, net (4.2) (4.2)
Noncash return on terminated construction
project costs - pretax (1.8) (2.3)
Deferred fuel expenses (11.5) (0.8)
Deferred capacity expenses 5.5 (0.8)
Restructuring 5.4 3.5
Changes in:
Accounts receivable (17.4) (13.0)
Accrued unbilled revenues 24.8 29.6
Materials and supplies 28.6 40.1
Accounts payable, trade 7.9 (36.4)
Accrued expenses 58.2 69.9
Other (9.0) 12.6
Net cash flow from operating activities 409.6 366.4
Cash flow from (to) financing activities:
Issuance of long-term debt 24.5 200.0
Issuance (repayment) of short-term debt (144.0) 13.4
Repayment of long-term debt and preferred
stock (58.9) (185.0)
Common Stock dividend payments (95.3) (100.3)
Preferred stock dividend payments (8.9) (11.5)
Other (0.6) (4.3)
Net cash flow (to) financing activities (283.2) (87.7)
Cash flow from (used in) investing activities:
Utility plant expenditures (excluding
AFC-other funds) (75.9) (130.6)
Nuclear fuel (excluding AFC-other funds) (31.5) (4.5)
Nuclear decommissioning contributions (9.0) (6.2)
Sale of accounts receivable (60.0)
Purchase of subsidiary assets (13.7)
Other (4.0) (5.0)
Net cash flow (used in) investing activities (134.1) (206.3)
Increase (decrease) in cash and cash
equivalents (7.7) 72.4
Cash and cash equivalents at beginning
of period 29.8 28.8
Cash and cash equivalents at end of period $ 22.1 $ 101.2
Cash Paid During The Period For:
Interest (reduced for the net cost of
borrowed funds capitalized as AFC) $ 88.8 $ 119.6
Income taxes 4.0 0.2
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>
<PAGE 7>
VIRGINIA ELECTRIC AND POWER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(a) Virginia Electric and Power Company is a regulated public
utility engaged in the generation, transmission, distribution and
sale of electric energy within a 30,000 square mile area in
Virginia and northeastern North Carolina. It sells electricity
to retail customers (including governmental agencies) and to
wholesale customers such as rural electric cooperatives and
municipalities. The Virginia service area comprises about 65
percent of Virginia's total land area, but accounts for over 80
percent of its population. As used herein, the terms "Virginia
Power" and the "Company" shall refer to the entirety of Virginia
Electric and Power Company, including, without limitation, its
Virginia and North Carolina operations, and all of its
subsidiaries.
In the opinion of the management of Virginia Electric and
Power Company the accompanying unaudited consolidated financial
statements contain all adjustments, consisting of only normal
recurring accruals, necessary to present fairly the financial
position as of March 31, 1996, the results of operations for the
three-month periods ended March 31, 1996 and 1995, and the cash
flows for the three-month periods ended March 31, 1996 and 1995.
Certain amounts in the 1995 consolidated financial statements
have been reclassified to conform to the 1996 presentation.
The results of operations for the interim period are not
necessarily indicative of the results to be expected for the full
year.
The consolidated financial statements include the accounts
of the Company and its subsidiaries, with all significant
intercompany transactions and accounts being eliminated on
consolidation.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
These financial statements should be read in conjunction
with the financial statements, and notes thereto, included in the
Company's Annual Report on Form 10-K for the year ended December
31, 1995.
<PAGE>
<PAGE 8>
VIRGINIA ELECTRIC AND POWER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(b) Contingencies
Nuclear Insurance
The Price-Anderson Act limits the public liability of an
owner of a nuclear power plant to $8.9 billion for a single
nuclear incident. The Company is a member of certain insurance
programs that provide coverage for property damage to members'
nuclear generating plants, replacement power and liability in the
event of a nuclear incident. The Company may be subject to
retrospective premiums in the event of major incidents at nuclear
units owned by covered utilities (including the Company). For
additional information, see Note C to CONSOLIDATED FINANCIAL
STATEMENTS included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1995.
(c) Company Obligated Mandatorily Redeemable Preferred
Securities of Subsidiary Trust
In 1995, the Company established Virginia Power Capital Trust
I (VP Capital Trust). VP Capital Trust sold 5,400,000 shares of
Preferred Securities for $135.0 million, representing preferred
beneficial interests and 97% beneficial ownership in the assets
held by VP Capital Trust.
Virginia Power issued $139.2 million of its 1995 Series A,
8.05% Junior Subordinated Notes (the Notes) in exchange for the
$135.0 million realized from the sale of the Preferred Securities
and $4.2 million of common securities of VP Capital Trust. The
common securities represent the remaining 3% beneficial ownership
interest in the assets held by VP Capital Trust. The Notes
constitute 100% of VP Capital Trust's assets.
(d) Preferred Stock
As of March 31, 1996, there were 1,800,000 and 5,090,140
issued and outstanding shares of preferred stock subject to
mandatory redemption and preferred stock not subject to mandatory
redemption, respectively. There are a total of 10,000,000
authorized shares of the Company's preferred stock.
<PAGE>
<PAGE 9>
VIRGINIA ELECTRIC AND POWER COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(e) Restructuring Charges
In March 1995, the Company announced the implementation phase
of its Vision 2000 program. For additional information, see Note
P to CONSOLIDATED FINANCIAL STATEMENTS included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995.
Restructuring charges of $5.4 million and $3.5 million in the
first quarter of 1996 and 1995, respectively, included severance
costs, purchase power contract cancellation and negotiated
settlement costs and other costs incurred directly as a result of
the Vision 2000 initiatives. The Vision 2000 review of
operations is expected to continue through 1996 and additional
costs will be incurred. At this time, Company management cannot
estimate the additional restructuring costs yet to be incurred.
In May 1995, the Company established comprehensive involuntary
severance packages for employees who lose their positions as a
result of these initiatives. Through March 31, 1996, management
had terminated 979 employees. The recognition of severance costs
resulted in a charge to operations of $3.2 million in the first
quarter. At March 31, 1996, severance payments totaling $19.4
million have been made. The Company estimates that these staffing
reductions will result in annual savings, net of outsourcing
costs, in the range of $50 million to $60 million. These savings
will be reflected in lower construction expenditures as well as
lower operation and maintenance expenses.
<PAGE>
<PAGE 10>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
Internal generation of cash during the first quarter of 1996
provided 284% of funds required for the Company's capital
requirements compared to 188% during the first quarter of 1995.
With the completion of the Clover Power Station, the Company
is in a period in which internal cash generation should exceed
construction expenditures.
As detailed in the Consolidated Statements of Cash Flows, cash
flow from operating activities for the three-month period ended
March 31, 1996 increased $43.2 million as compared to the three-month period
ended March 31, 1995 primarily as a result ofincreased sales due to the
colder weather experienced in the first
quarter of 1996.
Cash from (to) financing activities was as follows:
<TABLE>
<S>
Three Months Ended March 31,
1996 1995
(Millions)
<C> <C>
Mortgage bonds $ 200.0
Issuance (repayment) of
short-term debt $(144.0) 13.4
Issuance of pollution
control securities 24.5
Repayment of long-term debt
and preferred stock (58.9) (185.0)
Dividends (104.2) (111.8)
Other (0.6) (4.3)
Total $(283.2) $ (87.7)
</TABLE>
Financing activities for the first three months of 1996
resulted in a net cash outflow of $283.2 million.
During the first quarter of 1996, $34.4 million of Medium-Term Notes
matured. In addition, the Company issued $24.5 million of variable rate
pollution control securities to refund $24.5 million of securities assumed in
its acquisition of the North Branch Power Station.
<PAGE>
<PAGE 11>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
As of March 31, 1996, $25 million was outstanding under the
Company's commercial paper program, which is a decrease of $144
million from the December 31, 1995 outstanding balance. The
reduction in commercial paper outstanding resulted from improved
cash flow from operations due to increased sales from colder
weather experienced in the first quarter of 1996.
Cash from (used in) investing activities was as follows:
<TABLE>
<S>
Three Months Ended March 31,
1996 1995
(Millions)
<C> <C>
Utility plant expenditures $ (75.9) $(130.6)
Nuclear fuel (31.5) (4.5)
Nuclear decommissioning
contributions (9.0) (6.2)
Sale of accounts receivable (60.0)
Purchase of subsidiary assets (13.7)
Other (4.0) (5.0)
Total $(134.1) $(206.3)
</TABLE>
Investing activities for the first three months of 1996
resulted in a net cash outflow of $134.1 million primarily due to
$75.9 million of construction expenditures and $31.5 million of
nuclear fuel expenditures. Of the construction expenditures,
approximately $13.4 million was spent on power production
projects, and $54.0 million on transmission and distribution
projects.
Results of Operations
Balance available for Common Stock increased by $40.5
million for the three-month period ended March 31, 1996, as
compared to the same period in 1995, primarily as a result of the
colder weather experienced in the first quarter of 1996.
<PAGE>
<PAGE 12>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Operating Revenues
Operating revenues changed primarily due to the following:
<TABLE>
<S>
Three Months Ended March 31,
1996 vs. 1995
(Millions)
<C>
Customer growth $ 10.1
Weather 85.3
Change in base revenues (5.3)
Fuel cost recovery (23.8)
Other, net (8.0)
Total retail 58.3
Sales for resale 23.6
Other operating revenues 6.6
Total $88.5
Customer kilowatt-hour sales changed as follows:
Three Months Ended March 31,
1996 vs. 1995
Residential 16.0%
Commercial 8.9
Industrial (0.4)
Public authorities 5.4
Total retail sales 9.8
Resale 52.8
Total sales 14.7
</TABLE>
<PAGE>
<PAGE 13>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Heating and cooling degree days during the first quarter were as
follows:
1996 1995 Normal
Heating degree days 2,334 1,923 2,050
Percentage change
compared to prior year 21.4 (12.9)
Cooling degree days 0 0 7
The increase in kilowatt-hour retail sales for the three-month period
ended March 31, 1996 reflects the colder weather experienced in the first
quarter of 1996 compared to 1995.
The increase in sales for resale for the three-month period
ended March 31, 1996, as compared to the same period in 1995, was
primarily due to colder weather experienced by other utilities in
surrounding regions during the first three months of 1996 and
increased marketing efforts by the Company.
Purchased Power Capacity, Net
Purchased power capacity, net increased for the three-month
period ended March 31, 1996, as compared to the same period in
1995, primarily as a result of additional non-utility generation
being available and a decrease in the under recovery of capacity
expenses through rates due to higher sales.
Restructuring
As part of the Vision 2000 program (see Note (e) to
CONSOLIDATED FINANCIAL STATEMENTS), the Company recorded $5.4
million and $3.5 million of restructuring charges in the first
quarter of 1996 and 1995, respectively. Restructuring charges
included severance costs, purchase power contract cancellation
and negotiated settlement costs and other costs. The Company
estimates that these staffing reductions and the staffing
reductions reported during 1995 will result in annual savings,
net of outsourcing costs, in the range of $50 million to $60
million. The Company will incur additional restructuring charges
in 1996; however, the amount of restructuring charges yet to be
incurred is not known at this time. <PAGE>
<PAGE 14>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Furthermore, because the Company's review of its operations has
not been completed, the amount of savings ultimately to be
realized cannot be estimated at this time. When realized, the
savings will be reflected in lower construction expenditures as
well as lower operation and maintenance expenses.
Operation - Other and Maintenance
Operation - other and maintenance expenses decreased for the
three-month period ended March 31, 1996, as compared to the same
period in 1995, primarily as a result of decreased production
plant outage costs due to fewer outages and restructuring savings
due to implemented Vision 2000 initiatives, partially offset by
an increase in transmission and distribution service restoration
costs resulting from winter storm damage.
Income Taxes
Income taxes increased for the three-month period ended March
31, 1996, as compared to the same period in 1995 primarily as a
result of increased income subject to tax.
Contingencies
For information on contingencies, see Note (b) to
CONSOLIDATED FINANCIAL STATEMENTS.
Future Issues
Accounting Standards
In March 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (SFAS) No.
121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of, which was adopted by the
Company effective January 1, 1996. Based on the Company's
current operating environment, SFAS 121 did not have any impact
on the Company's consolidated financial statements.
<PAGE>
<PAGE 15>
VIRGINIA ELECTRIC AND POWER COMPANY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
Competition
As part of the Company's Vision 2000 initiatives, the
Company supported a number of legislative proposals during the
1996 session of the Virginia General Assembly aimed at achieving
greater flexibility for the Virginia State Corporation Commission
(the Virginia Commission) and the Company in adapting to a more
competitive environment. All the proposals supported by the
Company were passed in amended form by both houses of the General
Assembly and have been subsequently signed into law by the
Governor.
On April 24, 1996 the Federal Energy Regulatory Commission
(FERC) issued final rules on open access transmission service,
stranded costs, standards of conduct and open access same-time
information systems (OASIS). Under the final rules utilities must
file open access transmission tariffs on or around July 1, 1996.
They must also take service under their own tariffs for wholesale
sales and purchases. The rule provides for stranded cost recovery
from departing customers. Utilities must participate in an OASIS
by November 1, 1996, and comply with standards of conduct that
require separation of transmission operations/reliability
functions from wholesale merchant/marketing functions. These
rules will become effective 60 days after publication in the
Federal Register. FERC also issued a notice of proposed
rulemaking (NOPR) proposing replacement of open access tariffs
with a capacity reservation tariff by December 31, 1997.
Other
Except for the historical information contained herein, the
matters discussed in this report are forward-looking statements
which involve risks and uncertainties, including but not limited
to regulatory, economic, competitive, governmental and
technological factors affecting the Company's operations, rates,
markets, products, services and prices, and other factors
discussed herein and in the Company's other filings with the
Securities and Exchange Commission.
<PAGE>
<PAGE 16>
VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings
In reference to the lawsuit filed against Virginia Power by
Doswell Limited Partnership (Doswell), on March 1, 1996 the
Virginia Supreme Court affirmed the decision of the Circuit Court
of the City of Richmond in favor of the Company. On March 29,
1996 Doswell filed a Petition for Rehearing with the Supreme
Court of Virginia and on April 19, 1996 the Supreme Court of
Virginia denied the Petition for Rehearing.
In reference to the proceeding before the Virginia
Commission into the holding company structure and the
relationship between Dominion Resources (DRI) and Virginia Power,
the Commission Staff filed its final comments to the responses of
Virginia Power and DRI on March 15, 1996. The Staff comments
addressed a broad range of corporate structure issues, affiliate
service arrangements, and finance and diversification issues
which have been the subject of scrutiny by the Commission Staff
and its consultants since the proceeding was initiated in 1994.
In summary, the comments acknowledged that the two companies had
adopted changes in policy and structure which addressed the
majority of the concerns enumerated by the Staff and its
consultants in their Final Report filed in April 1995, and
recommended continued monitoring of compliance with the
Commission's February 1995 Consent Order. The Staff recommended
that the proceeding be continued until July 1997.
In reference to the civil action instituted in the United
States District Court for the Eastern District of Virginia,
Norfolk Division, against the City of Norfolk and Virginia Power
by a landowner who alleges that his property has been
contaminated by toxic pollutants on an adjacent property formerly
owned by the Company, a trial date of August 5, 1996 has been
set.
Item 4. Submission of Matters to a Vote of Security Holders
By consent in lieu of an Annual Meeting, Dominion Resources,
Inc., the sole holder of all the voting Common Stock of the
Company, on April 19, 1996, elected the following persons to
serve as Directors of the Company for the term indicated:
Class I-Term Expires in 1999
Harvey L. Lindsay, Jr.
William T. Roos
William G. Thomas
<PAGE>
<PAGE 17>
VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION
(Continued)
Item 5. Other Information
Regulation
General
In reference to the Virginia Commission proceeding to review
and consider its policy regarding restructuring of, and
competition in, the electric utility industry, the Commission has
extended the deadline for its Staff to address a comprehensive
list of issues and to report its findings and recommendations
until July 16, 1996. Interested parties will then have until
September 16, 1996 to file written comments or request oral
argument in response to the Staff report.
In reference to the North Carolina Utilities Commission
informal information gathering proceeding into the question of
whether retail competition should be allowed in North Carolina,
the North Carolina Commission issued an Order on April 3, 1996
directing parties to the proceeding to submit additional comments
on a number of issues relating to competition and industry
restructuring, including reliability, obligation to serve,
stranded costs and ancillary costs.
On April 24, 1996 FERC issued final rules on open access
transmission service, stranded costs, standards of conduct and
open access same-time information systems (OASIS). For
additional information, see Future Issues - Competition under
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Sources of Power
On March 28, 1996 Clover Power Station Unit 2 achieved
commercial operation, with a summer capability of 416 Mw
(includes the 50 percent undivided ownership interest of Old
Dominion Electric Cooperative(ODEC)). Concurrent with the
commercial operation of Unit 2, a sales agreement between the
Company and ODEC, whereby the Company provided 100 Mw of firm
capacity and energy to ODEC, ended. In early March,1996 a 75 mile
500 Kv transmission line from the Clover Power Station to the
Carson Substation in Dinwiddie County, Virginia was completed and
energized.
<PAGE>
<PAGE 18>
VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION
(Continued)
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3(i) - Restated Articles of Incorporation, as amended, as in
effect on September 12, 1994 (Exhibit 3(i), Form 8-K dated
October 19, 1994, File No. 1-2255, incorporated by
reference).
3(ii) - Bylaws, as amended, as in effect on December 31,
1994 (Exhibit 3(ii), Form 10-K for the fiscal year ended
December 31, 1994, File No. 1-2255, incorporated by
reference).
4(i) - Indenture of Mortgage of the Company, dated November
1, 1935, as supplemented and modified by fifty-eight
Supplemental Indentures, Exhibit 4(ii), Form 10-K for the
fiscal year ended December 31, 1985, File No. 1-2255,
incorporated by reference; Fifty-Ninth Supplemental
Indenture, Exhibit 4(ii), Form 10-Q for the quarter ended
March 31, 1986, File No. 1-2255, incorporated by reference;
Sixtieth Supplemental Indenture, Exhibit 4(ii), Form 10-Q
for the quarter ended September 30, 1986, File No. 1-2255,
incorporated by reference; Sixty-First Supplemental
Indenture, Exhibit 4(ii), Form 10-Q for the quarter ended
June 30, 1987, File No. 1-2255, incorporated by reference;
Sixty-Second Supplemental Indenture, Exhibit 4(ii), Form 8-K,
dated November 3, 1987, File No. 1-2255, incorporated by
reference; Sixty-Third Supplemental Indenture, Exhibit 4(i),
Form 8-K, dated June 8, 1988, File No. 1-2255, incorporated
by reference; Sixty-Fourth Supplemental Indenture, Exhibit
4(i), Form 8-K, dated February 8, 1989, File No. 1-2255,
incorporated by reference; Sixty-Fifth Supplemental
Indenture, Exhibit 4(i), Form 8-K, dated June 22, 1989, File
No. 1-2255, incorporated by reference; Sixty-Sixth
Supplemental Indenture, Exhibit 4(i), Form 8-K, dated
February 27, 1990, File No. 1-2255, incorporated by
reference; Sixty-Seventh Supplemental Indenture, Exhibit
4(i), Form 8-K, dated April 2, 1991, File No. 1-2255,
incorporated by reference; Sixty-Eighth Supplemental
Indenture, Exhibit 4(I), Sixth-Ninth Supplemental Indenture,
Exhibit 4(ii) and Seventieth Supplemental Indenture, Exhibit
4(iii), Form 8-K, dated February 25, 1992, File No. 1-2255,
incorporated by reference; Seventy-First Supplemental
Indenture, Exhibit 4(i) and Seventy-Second Supplemental
<PAGE>
<PAGE 19>
VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION
(Continued)
Indenture, Exhibit 4 (ii), Form 8-K, dated July 7, 1992,
File No. 1-2255, incorporated by reference; Seventy-Third
Supplemental Indenture, Exhibit 4(i), Form 8-K, dated August
6, 1992, File No. 1-2255, incorporated by reference;
Seventy-Fourth Supplemental Indenture, Exhibit 4(i), Form 8-K, dated
February 10, 1993, File No. 1-2255, incorporated by
reference; Seventy-Fifth Supplemental Indenture, Exhibit
4(i), Form 8-K, dated April 6, 1993, File No. 1-2255,
incorporated by reference; Seventy-Sixth Supplemental
Indenture, Exhibit 4(i), Form 8-K, dated April 21, 1993,
File No. 1-2255, incorporated by reference. Seventy-Seventh
Supplemental Indenture, Exhibit 4(i), Form 8-K, dated June
8, 1993, File No. 1-2255, incorporated by reference;
Seventy-Eighth Supplemental Indenture, Exhibit 4(i), Form 8-K, dated
August 10, 1993, File No. 1-2255, incorporated by
reference; Seventy-Ninth Supplemental Indenture, Exhibit
4(i), Form 8-K, dated August 10, 1993, File No. 1-2255,
incorporated by reference, Eightieth Supplemental Indenture,
Exhibit 4(i), Form 8-K dated October 12, 1993, File No. 1-2255,
incorporated by reference, Eighty-First Supplemental
Indenture, Exhibit 4(iii), Form 10-K for the fiscal year
ended December 31, 1993, File No. 1-2255, incorporated by
reference; Eighty-Second Supplemental Indenture, Exhibit
4(i), Form 8-K, dated January 18, 1994, File No. 1-2255,
incorporated by reference, Eighty-Third Supplemental
Indenture, Exhibit 4(i), Form 8-K, dated October 19, 1994,
File No. 1-2255, incorporated by reference and Eighty-Fourth
Supplemental Indenture, Exhibit 4(i), Form 8-K dated March
22, 1995, File No. 1-2255, incorporated by reference.
4(ii) - Indenture, dated as of June 1, 1986, from Virginia
Electric and Power Company to Chemical Bank pursuant to
which Medium-Term Notes, Series B were issued (Exhibit 4(v),
Form 10-K for the fiscal year ended December 31, 1993, File
No. 1-2255, incorporated by reference).
4(iii) - Indenture, dated as of April 1, 1988, from Virginia
Electric and Power Company to Chemical Bank, Trustee,
pursuant to which Medium-Term Notes, Series C (Multi-Currency)
were issued as supplemented and modified by a First
Supplemental Indenture, dated as of August 1, 1989,
pursuant to which Medium-Term Notes, Series D(Multi-Currency),
Series E and Series F were issued (Exhibit 4(vi),
Form 10-K for the fiscal year ended December 31, 1993, File
No. 1-2255, incorporated by reference).
<PAGE>
<PAGE 20>
VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION
(Continued)
4(iv) - Indenture, dated as of August 1, 1995, from Virginia
Electric and Power Company to Chemical Bank, Trustee, as
supplemented and modified by a First Supplemental Indenture,
dated as of August 1, 1995, pursuant to which the Series A
8.05% Junior Subordinated notes were issued to fund the
purchase of Virginia Power Capital Trust 1 Common Stock and
Preferred Securities proceeds (Exhibits 4(a) and 4(b),
respectively, Form S-3 Registration Statement No. 33-61265
as filed on July 24, 1995 and amended on August 21, 1995 and
August 22, 1995, incorporated by reference).
27 - Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K;
None
<PAGE>
<PAGE 21>
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.
VIRGINIA ELECTRIC AND POWER COMPANY
Registrant
May 9, 1996
/S/ E. M. ROACH, JR.
______________________________
E. M. Roach, Jr.
Senior Vice President-Finance,
Regulation and General Counsel
(Chief Financial Officer)
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