10-Q

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 June 30, 2003

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 (State or other jurisdiction of incorporation or organization)	54-0418825 (I.R.S. Employer Identification No.)
701 East Cary Street RICHMOND, VIRGINIA (Address of principal executive offices)	23219 (Zip Code)
(804) 819-2000 (Registrant's telephone number)

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         

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Exchange Act). Yes       No   X   

At July 31, 2003, the latest practicable date for determination, 177,932 shares of common stock, without par value, of the registrant were outstanding.

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VIRGINIA ELECTRIC AND POWER COMPANY

INDEX

		Page   Number
PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements
	Consolidated Statements of Income - Three and Six Months Ended June 30, 2003 and 2002	3
	Consolidated Balance Sheets - June 30, 2003 and December 31, 2002	4
	Consolidated Statements of Cash Flows - Six Months Ended June 30, 2003 and 2002	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	37
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 4.	Submission of Matters to a Vote of Security Holders	38
Item 5.	Other Information	38
Item 6.	Exhibits and Reports on Form 8-K	38

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VIRGINIA ELECTRIC AND POWER COMPANY

PART I.  FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended June 30,		Six Months Ended June 30,
	2003	2002	2003		2002
	(millions)
Operating Revenue	$1,215	$1,221	$2,726	$2,373
Operating Expenses
Electric fuel and energy purchases, net	325	304	686	594
Purchased electric capacity	150	160	311	344
Other purchased energy commodities	74	-	142	-
Other operations and maintenance	254	257	460	457
Depreciation and amortization	114	125	229	256
Other taxes	45	34	92	69
Total operating expenses	962	880	1,920	1,720
Income from operations	253	341	806	653
Other income	25	11	39	18
Interest and related charges:
Interest expense	64	69	131	143
Distributions - preferred securities of subsidiary trust	7	3	15	5
Total interest and related charges	71	72	146	148
Income before income taxes	207	280	699	523
Income taxes	74	105	259	194
Income before cumulative effect of changes in accounting principle	133	175	440	329
Cumulative effect of changes in accounting principle (net of income taxes of $51)	-	-	84	-
Net Income	133	175	524	329
Preferred dividends	3	5	8	9
Balance available for common stock	$   130	$   170	$ 516	$ 320

_______________

The accompanying notes are an integral part of the Consolidated Financial Statements.

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VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED BALANCE SHEETS
(Unaudited)

	June 30, 2003	December 31, 2002*
ASSETS	(millions)
Current Assets
Cash and cash equivalents	$    40	$    132
Customer accounts receivable (net of allowance of $20 and $12)	1,942	1,758
Other accounts receivable	37	73
Receivables from affiliates	96	41
Inventories	420	446
Derivative and energy trading assets	1,766	1,261
Prepayments	18	47
Other	170	108
Total current assets	4,489	3,866
Investments
Nuclear decommissioning trust funds	928	838
Other	22	22
Total investments	950	860
Property, Plant and Equipment
Property, plant and equipment	18,446	17,797
Accumulated depreciation and amortization	(7,679)	(8,240)
Total property, plant and equipment, net	10,767	9,557
Deferred Charges and Other Assets
Regulatory assets	393	239
Derivative and energy trading assets	423	402
Other	220	239
Total deferred charges and other assets	1,036	880
Total assets	$17,242	$15,163

  _______________

The accompanying notes are an integral part of the Consolidated Financial Statements.

* The Consolidated Balance Sheet at December 31, 2002 has been derived from the audited Consolidated Financial Statements at that date.

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VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED BALANCE SHEETS
(Unaudited)

	June 30, 2003	December 31, 2002*
LIABILITIES AND SHAREHOLDER'S EQUITY	(millions)
Current Liabilities
Securities due within one year	$     400	$     360
Short-term debt	90	443
Accounts payable, trade	1,720	1,591
Payables to affiliates	87	56
Affiliated current borrowings	215	100
Accrued interest, payroll and taxes	303	207
Derivative and energy trading liabilities	1,764	1,206
Other	218	206
Total current liabilities	4,797	4,169
Long-Term Debt	3,955	3,794
Deferred Credits and Other Liabilities
Deferred income taxes and investment tax credits	2,008	1,763
Asset retirement obligations	718	-
Derivative and energy trading liabilities	255	279
Other	208	170
Total deferred credits and other liabilities	3,189	2,212
Total liabilities	11,941	10,175
Commitments and Contingencies (See Note 11)
Company Obligated Mandatorily Redeemable    Preferred Securities of Subsidiary Trust**	400	400
Preferred stock not subject to mandatory redemption	257	257
Common Shareholder's Equity
Common stock, no par, 300,000 shares authorized, 177,932 shares outstanding	2,888	2,888
Other paid-in capital	17	16
Accumulated other comprehensive income	41	8
Retained earnings	1,698	1,419
Total common shareholder's equity	4,644	4,331
Total liabilities and shareholder's equity	$17,242	$15,163

_______________

The accompanying notes are an integral part of the Consolidated Financial Statements.

* The Consolidated Balance Sheet at December 31, 2002 has been derived from the audited Consolidated Financial Statements at that date.

**Debt securities issued by Virginia Electric and Power Company constitute 100 percent of the trust's assets.

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VIRGINIA ELECTRIC AND POWER COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Six Months Ended June 30,
	2003	2002
	(millions)
Operating Activities
Net income	$524	$329
Adjustments to reconcile net income to net cash from operating activities:
Cumulative effect of changes in accounting principle, net of income      taxes	(84)	- -
Depreciation and amortization	260	289
Deferred income taxes and investment tax credits, net	172	3
Net unrealized (gains) losses on energy-related derivatives held for           trading purposes	(55)	9
Changes in:
Accounts receivable	(148)	(349)
Affiliated accounts receivable and payable	(24)	(10)
Inventories	26	(65)
Deferred fuel expenses, net	(143)	29
Prepayments	29	69
Accounts payable, trade	129	198
Accrued interest, payroll and taxes	96	16
Margin deposit assets and liabilities	(43)	(8)
Other, net	27	(80)
Net cash provided by operating activities	766	430
Investing Activities
Plant expenditures and other property additions	(458)	(316)
Nuclear fuel	(58)	(25)
Nuclear decommissioning contributions	(36)	(18)
Other	(4)	1
Net cash used in investing activities	(556)	(358)
Financing Activities
Repayment of short-term debt, net	(353)	(54)
Short-term borrowings from parent, net	115	-
Issuance of long-term debt	400	533
Repayment of long-term debt	(215)	(312)
Common stock dividend payments	(238)	(259)
Other	(11)	(19)
Net cash used in financing activities	(302)	(111)
Decrease in cash and cash equivalents	(92)	(39)
Cash and cash equivalents at beginning of period	132	84
Cash and cash equivalents at end of period	$    40	$   45
Supplemental Cash Flow Information
Noncash exchange of mortgage bonds for senior notes	$     -	$  117

_______________

The accompanying notes are an integral part of the Consolidated Financial Statements.

PAGE 7

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Nature of Operations

Virginia Electric and Power Company (Virginia Power or the Company), a Virginia public service company, is a wholly-owned subsidiary of Dominion Resources, Inc. (Dominion). The Company is a regulated public utility that generates, transmits and distributes electric energy within a 30,000 square-mile area in Virginia and northeastern North Carolina. It sells electricity to approximately 2.2 million retail customers, including governmental agencies, and to wholesale customers such as rural electric cooperatives, municipalities, power marketers and other utilities. The Virginia service area comprises about 65 percent of Virginia's total land area but accounts for over 80 percent of its population. The Company has trading relationships beyond the geographic limits of its retail service territory and buys and sells wholesale electricity, natural gas and other energy commodities. Within this document, the term "Company" refers to the entirety of Virginia Electric and Power Company, including its Virginia and North Carolina operations, and all of its subsidiaries.

The Company manages its daily operations through two operating segments, Energy and Delivery. In addition, the Company also presents its corporate and other operations as a segment. See Note 14.

Note 2. Significant Accounting Policies

As permitted by the rules and regulations of the Securities and Exchange Commission (SEC), the 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 accounting principles generally accepted in the United States of America (generally accepted accounting principles). These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes for the year ended December 31, 2002. On May 9, 2003, the Company filed a current report on Form 8-K that included its Consolidated Financial Statements and Notes for the year ended December 31, 2002, which were reformatted to reflect the transfer of electric transmission operations to the Energy segment from the Delivery segment effective January 1, 2003. References to the Consolidated Financial Statements and Notes for the year ended December 31, 2002 refer to those included in the May 9, 2003 current report on Form 8-K.

In the opinion of the Company's management, the accompanying unaudited Consolidated Financial Statements contain all adjustments, including normal recurring accruals, necessary to present fairly the Company's financial position as of June 30, 2003 and its results of operations for the three and six months and cash flows for the six months ended June 30, 2003 and 2002.

The accompanying unaudited Consolidated Financial Statements represent the accounts of the Company and its subsidiaries, with all significant intercompany transactions and accounts eliminated in consolidation.

The accompanying unaudited Consolidated Financial Statements reflect certain estimates and assumptions made by management in accordance with generally accepted accounting principles. 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 Company reports certain contracts and instruments at fair value in accordance with generally accepted accounting principles. Market pricing and indicative price information from external sources are used to measure fair value when available. In the absence of this information, the Company estimates fair value based on near-term and historical price information and statistical methods. For individual contracts, the use of differing assumptions could have a material effect on the contract's estimated fair value. See Note 2 to the Consolidated Financial Statements for the year ended December 31, 2002 for more discussion of the Company's estimation techniques.

The results of operations for the 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 and other factors.

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VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Certain amounts in the 2002 Consolidated Financial Statements have been reclassified to conform to the 2003 presentation.

Depreciation

In the second quarter of 2002, the Company extended the estimated useful lives of most of its fossil fuel stations and electric transmission and distribution property based on depreciation studies that indicated longer lives were appropriate. These changes in estimated useful lives reduced depreciation expense by approximately $8 million and $24 million for the three and six months ended June 30, 2003, respectively.

In 2001, the Company extended the estimated useful lives of its nuclear facilities by 20 years. The impact of the change is fully reflected in depreciation expense for 2003 and 2002. The Company filed applications with the Nuclear Regulatory Commission (NRC) for 20-year life-extensions for its nuclear facilities in 2001 and received a renewed license for these units in March 2003.

Note 3. Accounting Changes

Asset Retirement Obligations

Effective January 1, 2003, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations, which provides accounting requirements for the recognition and measurement of liabilities associated with the retirement of tangible long-lived assets. The Company has identified certain asset retirement obligations that are subject to the standard. These obligations are primarily associated with the decommissioning of its nuclear generation facilities.

Under SFAS No. 143, asset retirement obligations will be recognized at fair value as incurred and capitalized as part of the cost of the related tangible long-lived assets. Under the present value approach used to estimate the fair value of asset retirement obligations, accretion of the liabilities due to the passage of time will be recognized as an operating expense. In addition, the reporting of realized and unrealized earnings of external trusts available for funding decommissioning activities at the Company's nuclear plants will be recorded in other income and other comprehensive income, as appropriate. Through 2002, the Company recorded these trusts' earnings in other income with an offsetting charge to expense, also recorded in other income, for the accretion of the decommissioning liability.

The effect of adopting SFAS No. 143 for the three and six months ended June 30, 2003, as compared to an estimate of net income reflecting the continuation of former accounting policies, was to increase net income by $3 million and $148 million for those periods, respectively. The increases reflect lower expenses under SFAS No. 143 compared to expenses that would have been recorded under the former accounting policies. The $148 million increase is comprised of a $139 million after-tax gain, representing the cumulative effect of a change in accounting principle, described below, and an increase in income before the cumulative effect of a change in accounting principle of $9 million. Under the Company's accounting policy prior to the adoption of SFAS No. 143, $838 million had previously been accrued for future asset removal costs, primarily related to future nuclear decommissioning. Such amounts are included in the accumulated provision for depreciation and amortization as of December 31, 2002. With the ad option of SFAS No. 143, the Company calculated its asset retirement obligations to be $697 million. In recording the cumulative effect of the accounting change, the Company recognized its asset retirement obligations in noncurrent liabilities and reversed the previously recorded amount from the accumulated provision for depreciation and amortization.The cumulative effect of the accounting change also reflected a $175 million increase in property, plant and equipment for capitalized asset retirement costs and a $77 million increase in the accumulated provision for depreciation and amortization, representing the depreciation of such costs through December 31, 2002.

See Notes 2 and 8 to the Consolidated Financial Statements for the year ended December 31, 2002 for further discussion of the Company's former accounting and reporting policies for its costs of removal, including nuclear decommissioning, and earnings on its decommissioning trusts. See also Note 10 to these Consolidated Financial Statements for additional disclosures regarding asset retirement obligations.

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VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Energy Trading Contracts

In October 2002, the Emerging Issues Task Force (EITF) reached consensus on EITF Issue No. 02-3, Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities. EITF 02-3, in part, rescinded EITF Issue No. 98-10, Accounting for Contracts Involved in Energy Trading and Risk Management Activities. As a result, certain energy-related commodity contracts that are held in connection with the Company's energy trading activities are no longer subject to fair value accounting. The affected contracts are those energy-related contracts that are not considered to be derivatives under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. Under EITF 98-10 accounting, the fair value of energy contracts was measured at each reporting date, with changes in fair value, including unrealized amounts, reported in earnings. Energy-related contracts affected by the rescission of EITF 9 8-10 are now subject to accrual accounting and recognized as revenue or expense at the time of contract performance, settlement or termination.

The EITF 98-10 rescission was effective for non-derivative energy-related contracts initiated after October 25, 2002. For those non-derivative energy-related contracts initiated prior to October 25, 2002 in connection with the Company's energy trading activities, the Company reported the cumulative effect of this change in accounting principle as of January 1, 2003, resulting in an after-tax loss of $55 million.

The rescission of EITF 98-10, along with other provisions of EITF 02-3, also affects the classification of realized and unrealized gains and losses arising from derivative energy contracts no longer considered to be held for trading purposes, on the Consolidated Statements of Income. As permitted by EITF 98-10, for periods prior to January 1, 2003, the Company presented all changes in fair value of derivative and non-derivative energy-related contracts that are held in connection with the Company's energy trading activities, including amounts realized upon settlement, in revenue on a net basis. Under the provisions of EITF 02-3, for those energy-related derivative instruments determined to be held for trading purposes, all changes in fair value, including amounts realized upon settlement, continue to be presented in revenue on a net basis. A derivative contract is held for trading purposes if the intent of the transaction is to generate profits on short-term differences in price. For non-trading derivatives not designated as hedges, all unrealized changes in fair value are presented in other operations and maintenance expense on a net basis. For non-trading derivative contracts that involve physical delivery of commodities, gross sales contract settlements are presented in revenue, while gross purchase contract settlements are reported in expenses.

Note 4. Recently Issued Accounting Standards

Consolidation of Variable Interest Entities

As described more fully in Note 4 to the Consolidated Financial Statements for the year ended December 31, 2002, in January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation No. 46, Consolidation of Variable Interest Entities (FIN 46). FIN 46 addresses consolidation by business enterprises of entities that are not controllable through voting interests or in which the equity investors do not bear the residual economic risks and rewards. The initial adoption of the provisions of FIN 46 on July 1, 2003 by the Company will not impact its results of operations. A description of the Company's involvement with variable interest entities follows:

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VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Leases with Special Purpose Entities

As previously discussed in Note 21 to the Consolidated Financial Statements for the year ended December 31, 2002, the Company entered into agreements with another Dominion subsidiary (lessor) in order to finance and lease a new power generation facility. Under existing accounting guidance, neither the project assets nor related debt would be reported on the Company's Consolidated Balance Sheets upon inception of the lease. The project was completed on July 1, 2003, at which time the facility was put into service and the lease agreement became effective. Under FIN 46, the lessor is considered a variable interest entity and the Company has been determined to be the primary beneficiary and will therefore consolidate it in the preparation of its Consolidated Financial Statements. Based upon total project costs expected to be incurred for the project, consolidation of this variable interest entity, beginning July 1, 2003, will result in an additional $370 million in property, plant and equipment and related debt.

Company Obligated Mandatorily Redeemable Preferred Securities of Subsidiary Trusts

As described more fully in Note 16 to the Consolidated Financial Statements for the year ended December 31, 2002, the Company established Virginia Power Capital Trust II (trust) which sold trust preferred securities to third party investors. The Company received the proceeds from the sale of the trust preferred securities in exchange for junior subordinated notes issued by the Company to be held by the trust. Under existing accounting guidance, the Company consolidates the trust in the preparation of its Consolidated Financial Statements because it has a majority voting interest in the trust. Under FIN 46, the trust is considered a variable interest entity. Based on the trust structure as of July 1, 2003, the Company is not considered the primary beneficiary of the trust and thus will cease consolidating the trust beginning on July 1, 2003. Under these circumstances, the Company's Consolidated Balance Sheets will no longer reflect the trust preferred securities, but instead will report the junior subordinate d instruments held by the trust as long-term debt. The Company is currently evaluating changes to the trust structure that, if implemented, could possibly result in a determination that the Company is the primary beneficiary of the trust, thus requiring the Company to resume the consolidation of the trust in the preparation of its Consolidated Financial Statements. If the trust were to be consolidated subsequent to July 1, 2003, the trust preferred securities would be presented as liabilities as described under the Liabilities and Equity Classification section below.

Liabilities and Equity Classification

In May 2003, FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. The standard requires an issuer to classify and measure certain freestanding financial instruments with characteristics of both liabilities and equity as a liability if that financial instrument embodies an obligation requiring the issuer to redeem the financial instruments by transferring its assets. Under this standard, obligated mandatorily redeemable preferred securities would be reported as liabilities. However, as described under the Consolidation of Variable Interest Entities section above, consolidation of the underlying trust must be evaluated under FIN 46 before application of this Statement.

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VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Amendment of SFAS No. 133

On April 30, 2003, FASB issued SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments and for hedging activities under SFAS No. 133. The amendment reflects decisions made by FASB and the Derivatives Implementation Group (DIG) process in connection with issues raised about the application of SFAS No. 133. Generally, the provisions of SFAS No. 149 will be applied prospectively for contracts entered into or modified after June 30, 2003 and for hedging relationships designated after June 30, 2003. SFAS No. 149 provisions that resulted from the DIG process that became effective in quarters beginning before June 15, 2003 will continue to be applied based upon their original effective dates. The Company is presently evaluating the potential impact of SFAS No. 149 on its results of operations and financial position.

Other SFAS No. 133 Guidance

In connection with the January 2003 EITF meeting, FASB was requested to reconsider an interpretation of SFAS No. 133. The interpretation, which is contained in the DIG's C11 guidance, relates to contracts with pricing terms that include broad market indices. In particular, that guidance discusses whether a contract's pricing terms that contain broad market indices (e.g., consumer price index) could qualify as a normal purchase or sale and therefore not be subject to fair value accounting. The Company has certain power purchase and sale contracts subject to this guidance. On June 25, 2003, the FASB issued Statement 133 Implementation Issue No. C20, Interpretation of the Meaning of 'Not Clearly and Closely Related' in Paragraph 10(b) regarding Contracts with a Price Adjustment Feature, to clarify the guidance applicable to these circumstances. Under C20, criteria are established to determine if the price adjustment is not clearly and closely related to the underlying asset being purchased or sold under the contract, including whether the price adjustment is extraneous or disproportionate to the fair value of the underlying asset or direct component thereof. Under C20, the assessment should include both qualitative and quantitative considerations and should be performed only at inception of the contract. The provisions of C20 should be applied prospectively for all new and existing contracts beginning the first fiscal quarter after July 10, 2003. The Company has several power contracts that are subject to this guidance but has not completed its assessment of whether those contracts meet the provisions of C20. Assuming such contracts qualify as normal purchase or sale contracts under the new guidance, the Company will record these power contracts at estimated fair value, determined at the time of implementing C20, and will report the change as the cumulative effect of a change in accounting principle.

EITF 01-8

In May 2003, the EITF reached a consensus on Issue No. 01-8, Determining Whether an Arrangement Contains a Lease (EITF 01-8). Under the provisions of EITF 01-8, arrangements conveying the right to control the use of specific property, plant or equipment must be evaluated to determine whether they contain a lease. The Company enters into contracts for the long-term purchase and sale of electric generation capacity and energy that, depending on the facts and circumstances, could be subject to EITF 01-8. The new rules will be applied prospectively to contracts entered into or modified after July 1, 2003.

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VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Note 5. Operating Revenue

	Three Months Ended June 30,		Six Months Ended June 30,
	(millions)
	2003	2002	2003	2002
Regulated electric sales	$1,111	$1,168	$2,359	$2,277
Non-regulated electric sales	25	29	56	86
Non-regulated gas sales	3	(3)	198	(38)
Other	76	27	113	48
Total operating revenue	$1,215	$1,221	$2,726	$2,373

Regulated electric sales consist primarily of state-regulated retail electric sales and federally-regulated wholesale electric sales and electric transmission services subject to cost-of-service rate regulation.

Non-regulated electric sales consist primarily of sales of electricity at market-based rates and net revenue from electric trading activities.

Non-regulated gas sales consist primarily of sales of natural gas at market-based rates, brokered gas and net revenue from gas trading activities.

Other revenue consists primarily of miscellaneous service revenue from rate-regulated electric distribution, sales of coal and brokered oil and other miscellaneous revenue.

The composition of revenue from non-regulated electric sales, non-regulated gas sales and other revenue has changed since being described in Note 5 to the Consolidated Financial Statements for the year ended December 31, 2002. The changes were effective January 1, 2003 and related to the impact of adopting EITF 02-3 on the reporting of revenue and expenses for energy trading activities, as described in Note 3 and as follows:

For derivative contracts previously presented in revenue on a net basis: For non-trading derivatives not designated as hedges, all unrealized changes in fair value are presented in other operations and maintenance expense on a net basis. For non-trading derivative contracts that involve physical delivery of commodities, gross sales contract settlements are presented in revenue for non-regulated electric sales, non-regulated gas sales and other revenue, as applicable, while gross purchase contract settlements are reported in expenses.

For non-derivative contracts previously presented in revenue on a net basis: Non-derivative energy-related contracts, previously subject to fair value accounting under EITF 98-10, are now subject to accrual accounting. Revenue for non-regulated electric sales, non-regulated gas sales and other revenue now include settlements of sales contracts at the time of contract performance, settlement or termination, on an accrual basis. These contracts will no longer be reported at fair value in the Company's Consolidated Financial Statements.

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VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Note 6.     Liability for 2001 Severance Costs

The Company recognized costs and the related liability associated with employee severances in 2001. The change in this liability during the six months ended June 30, 2003 is presented below:

	Severance Liability
	(millions)
Balance at December 31, 2002	$4
Amounts Paid	(2)
Balance at June 30, 2003	$2

For additional information, see Note 6 to the Consolidated Financial Statements for the year ended December 31, 2002.

Note 7. Comprehensive Income

The following table presents total comprehensive income:

	Three Months Ended              June 30,		Six Months Ended             June 30,
	2003	2002	2003	2002
	(millions)
Net income	$133	$175	$524	$329
Other comprehensive income(1)	51	7	33	6
Total comprehensive income	$184	$182	$557	$335

________________

(1) Other comprehensive income for the three and six months ended June 30, 2003 and 2002 related to the effective portion of the changes in fair value of derivatives designated as hedging instruments in cash flow hedges (as described in Note 8) and to unrealized gains and losses, in the current year, on investments held in decommissioning trusts (see Note 3 for a discussion of accounting for unrealized gains and losses on trust investments).

Note 8. Derivatives and Hedge Accounting

The Company recognized no hedge ineffectiveness during the three and six months ended June 30, 2003 and 2002. The Company recognized net other comprehensive income associated with the effective portion of the change in fair value of cash flow hedging derivatives, net of taxes and amounts reclassified to earnings, for the three and six months ended June 30, 2003 and 2002 as follows:

	Three Months Ended June 30,		Six Months Ended June 30,
	2003	2002		2003	2002
	(millions)
Other comprehensive income - cash flow hedges	$4	$7		$9	$6

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VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

The following table presents selected information related to cash flow hedges included in Accumulated Other Comprehensive Income (AOCI) in the Consolidated Balance Sheet at June 30, 2003:

	Accumulated Other Comprehensive Income (Loss) After-Tax	Portion Expected to be Reclassified to Earnings During the Next 12 Months	Maximum Term
	(millions)
Interest Rate	$(1)	$(1)	43 months
Foreign Currency	19	5	53 months
Total	$18	$ 4

The actual amounts that will be reclassified to earnings during the next 12 months will vary from the expected amounts presented above as a result of changes in interest rates and foreign exchange rates. The effect of amounts being reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., anticipated purchases) in earnings, thereby achieving the realization of prices contemplated by the underlying risk management strategies.

Note 9. Significant Financing Transactions

Joint Credit Facilities

Dominion, Consolidated Natural Gas (CNG) and the Company are parties to two joint credit facilities that allow aggregate borrowings of up to $2 billion. In May 2003, Dominion, CNG and the Company entered into a joint credit facility that allows aggregate borrowings of up to $1.25 billion. This credit facility replaced the $1.25 billion 364-day credit facility that matured during the second quarter of 2003. In May 2002, Dominion, CNG and the Company entered into a $750 million 3-year revolving credit facility that terminates in May 2005. The credit facilities will be used for working capital; as support for the combined commercial paper programs of Dominion, CNG and the Company; and other general corporate purposes.

The 3-year facility can also be used to support up to $200 million of letters of credit. At June 30, 2003, total outstanding letters of credit supported by the 3-year facility were $199 million, which were issued on behalf of CNG and other Dominion subsidiaries.

Long-Term Debt

In February 2003, the Company issued $400 million aggregate principal amount of its 2003 Series A 4.75 percent senior notes due March 1, 2013 and repaid $10 million of maturing medium-term notes.

In April 2003, the Company repaid $200 million of 1993 Series B, 6.625 percent mortgage bonds.

Other Debt-Related Matters

See Note 4 for a discussion of the impact of FIN 46 on reported debt amounts, effective July 1, 2003, related to assets leased from another Dominion subsidiary and preferred securities issued by a subsidiary trust.

PAGE 15

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Note 10. Asset Retirement Obligations

The following table describes the changes to the Company's asset retirement obligations during the six months ended June 30, 2003:

	Amount
	(millions)
Asset retirement obligations at January 1, 2003	-
Asset retirement obligations recognized in transition	$697
Asset retirement obligations incurred during the period	4
Asset retirement obligations settled during the period	(1)
Accretion expense	19
Revisions in estimated cash flows	-
Asset retirement obligations at June 30, 2003(1)	$719
_______________________________________________________________
(1) Amount includes $1 million reported in other current liabilities.

The Company has established external trusts dedicated to funding the future decommissioning of its nuclear plants. At June 30, 2003, the aggregate fair value of these trusts, consisting primarily of debt and equity securities, totaled $928 million.

Had the provisions of SFAS No. 143 been applied for the following periods in 2003 and 2002, the Company's net income would have been as follows:

	Three Months Ended June 30, 2003		Six Months Ended June 30, 2003
	2003	2002	2003	2002
	(millions)
Net income, as reported	$133	$175	$524	$329
Pro forma net income	$133	$178	$385	$335

Had the provisions of SFAS No. 143 been applied for the following periods, the asset retirement obligations would have been as follows:

	2000	2001	2002
	(millions)
Pro forma asset retirement obligations at January 1	$588	$620	$661
Pro forma asset retirement obligations at December 31	$620	$661	$697

As permitted by SFAS No. 71, Accounting for the Effects of Certain Types of Regulation, the Company accrues for future costs of removal for its cost-of-service rate regulated transmission and distribution assets, even if no legal obligation to perform such activities exists. At June 30, 2003 and December 31, 2002, the Company's accumulated depreciation and amortization included $390 million and $375 million, respectively, representing the estimated future cost of such removal activities.

See Note 3 for further discussion of the adoption of SFAS No. 143.

PAGE 16

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Note 11. Commitments and Contingencies

Other than the matters discussed below, there have been no significant developments regarding commitments and contingencies disclosed in Note 21 to the Consolidated Financial Statements for the year ended December 31, 2002, nor have any significant new matters arisen during the six months ended June 30, 2003.

Environmental Matters

As previously reported in Note 21 to the Consolidated Financial Statements for the year ended December 31, 2002, the Company received a Notice of Violation in 2000 from the United States Environmental Protection Agency related to some specified construction projects at the Mt. Storm Power Station in West Virginia. Thereafter, New York State filed a suit against the Company alleging similar violations, and the suit was stayed. The Company reached an agreement in principle with the federal government and the state of New York to resolve the matter, and the states of Virginia, West Virginia, Connecticut and New Jersey joined the United States and the state of New York in seeking to reach a final agreement with the Company. A settlement agreement in the form of a proposed Consent Decree was agreed to on April 21, 2003, by the U.S. Department of Justice and the U.S. Environmental Protection Agency for the United States of America, by the states of Virginia, West Virginia, Connecticut, New Jersey and New York and by the Company. In accordance with the settlement, the United States filed an action in the Eastern District of Virginia against the Company and the Consent Decree was lodged with that court to settle that action. Virginia and West Virginia also filed complaints in intervention in the Virginia federal district court. The New York State federal district court action has been transferred to the Virginia federal district court, and it is anticipated that, in addition to New York, Connecticut and New Jersey will join as plaintiffs in that proceeding. The EPA public comment period has now closed. It is anticipated that in the near future the Virginia federal district court will be asked to enter the Consent Decree finalizing the settlement and resolving the underlying actions, but retaining jurisdiction pursuant to the terms of the Consent Decree. The settlement is consistent with the previously reported agreement in principle and includes payment of a $5 million civil penalty, an obligation to fund $14 million f or environmental projects and a commitment to improve air quality under the Consent Decree estimated to involve expenditures of $1.2 billion. The Company has already incurred certain capital expenditures for environmental improvements at its coal-fired stations in Virginia and West Virginia and has committed to additional measures in its current financial plans and capital budget to satisfy the requirements of the Consent Decree. As of June 30, 2003, the Company had accrued $19 million for the civil penalty and the funding of the environmental projects, substantially all of which was recorded in 2000.

Surety Bonds

At June 30, 2003, the Company had issued $67 million of surety bonds, of which $57 million is associated with the financial assurance requirements imposed by the NRC with respect to the decommissioning of the Company's nuclear units. Under the terms of the surety bonds, the Company is obligated to indemnify the respective surety bond company for any amounts paid.

PAGE 17

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Note 12. Related Party Transactions

The Company, through an unregulated subsidiary, exchanges certain quantities of natural gas with affiliates at market prices in the ordinary course of business. The affiliated commodity transactions are presented below:

	Three Months Ended June 30,		Six Months Ended June 30,
	2003	2002	2003	2002
	(millions)
Purchases of natural gas, gas transportation and storage  services from affiliates
	$176	$41	$ 299	$ 68
Sales of natural gas to affiliates	195	67	338	106

Through the same unregulated subsidiary, the Company is involved in facilitating Dominion's enterprise risk management strategy. In connection with this strategy, the Company enters into certain commodity derivative contracts with other Dominion affiliates. These contracts, which are principally comprised of commodity swaps, are used by Dominion affiliates to manage commodity price risks associated with purchases and sales of natural gas. As part of Dominion's enterprise risk management strategy, the Company generally manages such risk exposures by entering into offsetting derivative instruments with non-affiliates. The Company reports both affiliated and non-affiliated derivative instruments at fair value, with related changes included in earnings. At June 30, 2003 and December 31, 2002, the Company's Consolidated Balance Sheets included derivative assets with Dominion affiliates of $120 million and $84 million and derivative liabilities with Dominion affiliates of $87 million and $90 mil lion, respectively. The Company's income from operations includes the recognition of the following derivative gains and losses on affiliated transactions:

		Three Months Ended June 30,		Six Months Ended June 30,
		2003	2002	2003	2002
	(millions)
Net realized gains (losses) on commodity derivative contracts		$(20)	$10	$(25)	$31

Dominion Resources Services, Inc. (Dominion Services) provides certain administrative and technical services to the Company. The cost of services provided by Dominion Services to the Company in the second quarter of 2003 and 2002 was approximately $75 million and $67 million, respectively, and in the first six months of 2003 and 2002 was approximately $147 million and $131 million, respectively. The Company provides certain services to affiliates, including charges for facilities and equipment usage. The cost of services provided by the Company to Dominion Services and other Dominion affiliates was approximately $8 million and $10 million for the three months ended June 30, 2003 and 2002, respectively, and, for the six months ended June 30, 2003 and 2002, was approximately $14 million and $15 million, respectively.

The Company and its subsidiaries have made certain borrowings from Dominion pursuant to a short-term demand note. At June 30, 2003 and December 31, 2002, net outstanding borrowings under this note totaled $215 million and $100 million, respectively. Interest charges related to this note in the second quarter and the first six months of 2003 were not material.

The Company's accounts 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.

For information about the Company's agreement with Dominion Equipment II, Inc. to develop, construct, finance and lease a new power generation facility at the Company's Possum Point station in Prince William County, Virginia, see Note 21 to the Consolidated Financial Statements for the year ended December 31, 2002. Also, see Note 4 for a discussion of the impact of FIN 46 on this lease arrangement.

PAGE 18

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

An unregulated subsidiary of the Company, at its sole discretion, has provided at June 30, 2003 and December 31, 2002, approximately $17 million and $31 million, respectively, of cash collateral to third parties on behalf of several of its natural gas supply customers. For this and other financial support services, the unregulated subsidiary receives fees and has a security interest in the customers' assets. The arrangements terminate at various dates beginning in 2005 through 2007, subject to periodic renewal thereafter unless terminated by either party.

In connection with Dominion's plans to transfer certain power marketing activities that occur outside of the Company's service territory, the Company assigned a sales contract with an unrelated party to another Dominion subsidiary in 2003, involving the delivery of approximately 6 million megawatt-hours of wholesale electric energy in 2003, declining to approximately .5 million megawatt-hours annually for 2004 through 2006 and declining to 4,000 megawatt-hours in 2008.

For additional information on transactions with related parties, see Note 24 to the Consolidated Financial Statements for the year ended December 31, 2002.

Note 13.     Concentration of Credit Risk

The Company calculates its gross credit exposure for each counterparty as the unrealized fair value of derivative and energy trading contracts plus any outstanding receivables (net of payables, where netting agreements exist), prior to the application of collateral. However, to the extent a counterparty has fully prepaid transactions by transferring cash or posting letters of credit, the Company has excluded such amounts from its gross credit exposure. In the calculation of net credit exposure, the Company's gross exposure is reduced by collateral made available by counterparties, including letters of credit and cash received by the Company and held as margin deposits, made available by counterparties as a result of exceeding agreed-upon credit limits. Presented below is a summary of the Company's gross and net credit exposure as of June 30, 2003. The amounts presented exclude accounts receivable for regulated electric retail distribution and regulated electric transmission services, amounts receivable from affiliated companies and the Company's provision for credit losses. See Note 23 to the Consolidated Financial Statements for the year ended December 31, 2002 for a discussion of the nature of the Company's credit risk exposures.

	At June 30, 2003
	Credit Exposure Before Credit Collateral	Credit Collateral	Net Credit Exposure
	(millions)
Investment grade(1)	$298	$27	$271
Non-investment grade(2)	45	20	25
No external ratings:
Internally rated-investment grade(3)	250	--	250
Internally rated-non-investment grade(4)	39	--	39
Total	$632	$47	$585

_______________________

(1) This category includes counterparties with minimum credit ratings of Baa3 assigned by Moody's Investor Service (Moody's) and BBB- assigned by Standard & Poor's Ratings Group, a division of The McGraw-Hill Companies, Inc. (Standard & Poor's). The five largest counterparty exposures, combined, for this category represented approximately 15 percent of the total gross credit exposure.

(2) This category includes counterparties with credit ratings that are below investment grade. The five largest counterparty exposures, combined, for this category represented approximately 4 percent of the total gross credit exposure.

(3) This category includes counterparties that have not been rated by Moody's or Standard & Poor's but are considered investment grade based on the Company's evaluation of the counterparty's creditworthiness. The five largest counterparty exposures, combined, for this category represented approximately 31 percent of the total gross credit exposure.

(4) This category includes counterparties that have not been rated by Moody's or Standard & Poor's and are considered non-investment grade based on the Company's evaluation of the counterparty's creditworthiness. The five largest counterparty exposures, combined, for this category represented approximately 4 percent of the total gross credit exposure.

PAGE 19

VIRGINIA ELECTRIC AND POWER COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)

Note 14. Operating Segments

The Company manages its operations through the following segments:

Energy manages the Company's portfolio of generating facilities and power purchase contracts. It also manages the Company's energy trading, marketing, hedging and arbitrage activities. Energy also manages the electric transmission operations formerly managed by Delivery. Amounts for 2002 have been restated to reflect the management of electric transmission by Energy effective January 1, 2003.

Delivery manages the Company's electric distribution as well as metering services and customer service. The segment continues to be subject to the requirements of SFAS No. 71. Amounts for 2002 have been restated to reflect the management of electric transmission by Energy effective January 1, 2003.

Corporate and Other includes certain expenses which are not allocated to the Energy and Delivery segments, including those related to the following: 1) corporate operations and assets; 2) severance costs related to 2003 workforce reduction; and 3) the 2003 cumulative effect of changes in accounting principle (see Note 3).

See Note 26 to the Consolidated Financial Statements for the year ended December 31, 2002 for more information about the Company's segments.

	Energy	Delivery	Corporate and Other	Consolidated Total
Three Months Ended June 30, 2003	(millions)
Operating revenue	$959	$253	$   3	$1,215
Net income	72	61	-	133
Three Months Ended June 30, 2002
Operating revenue	$963	$255	$3	$1,221
Net income	123	52	-	175
Six Months Ended June 30, 2003
Operating revenue	$2,188	$532	$   6	$2,726
Net income	316	129	79	524
Six Months Ended June 30, 2002
Operating revenue	$1,877	$490	$6	$2,373
Net income	225	104	-	329

PAGE 20

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) discusses the results of operations and general financial condition of Virginia Power. MD&A should be read in conjunction with the Consolidated Financial Statements. "The Company" is used throughout MD&A and, depending on the context of its use, may represent any of the following: the legal entity, Virginia Electric and Power Company, one of Virginia Power's consolidated subsidiaries or the entirety of Virginia Power and its consolidated subsidiaries. The Company is a wholly-owned subsidiary of Dominion.

On May 9, 2003, the Company filed a current report on Form 8-K that included its Consolidated Financial Statements and Notes for the year ended December 31, 2002, as well as certain portions of MD&A, which were reformatted to reflect the transfer of electric transmission operations to the Energy segment from the Delivery segment effective January 1, 2003. References to the Consolidated Financial Statements and Notes for the year ended December 31, 2002 refer to those included in the May 9, 2003 current report on Form 8-K.

Risk Factors and Cautionary Statements That May Affect Future Results

This report contains statements concerning the Company's 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 words such as "anticipate," "estimate," "forecast," "expect," "believe," "should," "could," "plan," "may" or other similar words.

The Company makes forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ are often presented with the forward-looking statements themselves. In addition, other factors could cause actual results to differ materially from those indicated in any forward-looking statement. These factors include weather conditions; governmental regulations; cost of environmental compliance; inherent risk in the operation of nuclear facilities; fluctuations in energy-related commodities prices and the effect these could have on the Company's earnings, liquidity position, and the underlying value of its assets; trading counterparty credit risk; capital market conditions, including price risk due to marketable securities held as investments in trusts and benefit plans; changes in rating agency requirements or ratings; changes in accounting standards; the risks of operating businesses in regulated industries that are becoming deregulated; transfer of control over the Company's transmission facilities to a regional transmission entity; collective bargaining agreements and labor negotiations; and political and economic conditions (including inflation and deflation). Some more specific risks are discussed below.

The Company bases its forward-looking statements on management's beliefs and assumptions using information available at the time the statements are made. The Company cautions the reader not to place undue reliance on its forward-looking statements because the assumptions, beliefs, expectations and projections about future events may and often do materially differ from actual results. The Company undertakes no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

The Company's operations are weather sensitive. The Company's results of operations can be affected by changes in the weather. Weather conditions directly influence the demand for electricity and affect the price of energy commodities. In addition, severe weather, including hurricanes, winter storms and droughts, can be destructive, causing outages, property damage and requiring the Company to incur additional expenses.

The Company is subject to complex governmental regulation which could adversely affect its operations. The Company's operations are subject to extensive regulation and require numerous permits, approvals and certificates from various federal, state and local governmental agencies. The Company must also comply with environmental legislation and other regulations. Management believes the necessary approvals have been obtained for the Company's existing operations and that its business is conducted in accordance with applicable laws. However, new laws or regulations or the revision or reinterpretation of existing laws or regulations may require the Company to incur additional expenses.

PAGE 21

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Costs of environmental compliance, liabilities and litigation could exceed the Company's estimates. Compliance with federal, state and local environmental laws and regulations may result in increased capital, operating and other costs, including remediation and containment and monitoring obligations. In addition, the Company may be a responsible party for environmental clean up at a site identified by a regulatory body. Management cannot predict with certainty the amount and timing of all future expenditures related to environmental matters because of the difficulty of estimating clean up costs and compliance, and the possibility that changes will be made to the current environmental laws and regulations. There is also uncertainty in quantifying liabilities under environmental laws that impose joint and several liability on all potentially responsible parties.

Capped electric rates in Virginia may be insufficient to allow full recovery of stranded and other costs. Under the Virginia Utility Restructuring Act, the Company's base rates (excluding, generally, fuel costs and certain other allowable adjustments) remain unchanged until July 2007 unless modified or terminated consistent with that Act. The capped rates and wires charges that, where applicable, are being assessed to customers opting for alternative suppliers allow the Company to recover certain generation-related costs and fuel costs; however, the Company remains exposed to numerous risks of cost-recovery shortfalls. These include exposure to potentially stranded costs, future environmental compliance requirements, changes in tax laws, inflation and increased capital costs. See Management's Discussion and Analysis of Financial Condition and Results of Operations-Future Issues and Outlook in the Company's Annual Report on Form 10-K for the year ended December 31, 2002 and Not e 21 to the Consolidated Financial Statements for the year ended December 31, 2002.

The electric generation business is subject to competition. The generation portion of the Company's operations in Virginia is open to competition and is no longer subject to cost-based rate regulation. As a result, there is increased pressure to lower costs, including the cost of purchased electricity. Because the Company's generation business has not previously operated in a competitive environment, the extent and timing of entry by additional competitors into the electric market in Virginia is unknown. Therefore, it is difficult to predict the extent to which the Company will be able to operate profitably within this new environment.

There are inherent risks in the operation of nuclear facilities. The Company operates nuclear facilities that are subject to inherent risks. These include the threat of terrorist attack and ability to dispose of spent nuclear fuel, the disposal of which is subject to complex federal and state regulatory constraints. These risks also include the cost of and the Company's ability to maintain adequate reserves for decommissioning, costs of plant maintenance and exposure to potential liabilities arising out of the operation of these facilities. The Company maintains decommissioning trusts and external insurance coverage to minimize the financial exposure to these risks. However, it is possible that costs arising from claims could exceed the amount of any insurance coverage.

The use of derivative instruments could result in financial losses. The Company uses derivative instruments including futures, forwards, options and swaps, to manage its commodity and financial market risks. In addition, the Company purchases and sells commodity-based contracts in the natural gas, electricity and oil markets for trading purposes. In the future, the Company could recognize financial losses on these contracts as a result of volatility in the market values of the underlying commodities or if a counterparty fails to perform under a contract. In the absence of actively quoted market prices and pricing information from external sources, the valuation of these contracts involves management's judgment or use of estimates. As a result, changes in the underlying assumptions or use of alternative valuation methods could affect the value of the reported fair value of these contracts. For additional information concerning the Company's derivatives and commodity-based trading contracts, see Management's Discussion and Analysis of Financial Condition and Results of Operations-Market Rate Sensitive Instruments and Risk Management in the Company's Annual Report on Form 10-K for the year ended December 31, 2002 and Notes 2 and 9 to the Consolidated Financial Statements for the year ended December 31, 2002.

PAGE 22

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

The Company is exposed to market risks beyond its control in its energy clearinghouse operations. The Company's energy clearinghouse and risk management operations are subject to multiple market risks including market liquidity, counterparty credit strength and price volatility. Many industry participants have experienced severe business downturns resulting in some being forced to exit or curtail their participation in the energy trading markets. This has led to a reduction in the number of trading partners and lower industry trading revenues. Declining credit worthiness of some of the Company's trading counterparties may limit the level of its trading activities with these parties and increase the risk that these counterparties may not perform under a contract.

An inability to access financial markets could affect the execution of the Company's business plan.The Company relies on access to both short-term money markets and longer-term capital markets as a significant source of liquidity for capital requirements not satisfied by the cash flows of its operations. Management believes that the Company and its subsidiaries will maintain sufficient access to these financial markets based upon current credit ratings. However, certain disruptions outside of the Company's control may increase its cost of borrowing or restrict its ability to access one or more financial markets. Such disruptions could include an economic downturn, the bankruptcy of an unrelated energy company or changes to the Company's credit ratings. Restrictions on the Company's ability to access financial markets may affect its ability to execute its business plan as scheduled.

Changing rating agency requirements could negatively affect the Company's growth and business strategy. As of August 1, 2003, the Company's senior secured debt is rated A-, stable outlook, by Standard & Poor's and A2, stable outlook, by Moody's. Both agencies have recently implemented more stringent applications of the financial requirements for various ratings levels. In order to maintain its current credit ratings in light of these or future new requirements, the Company may find it necessary to take steps or change its business plans in ways that may adversely affect its growth and earnings. A reduction in the Company's credit ratings by either Standard & Poor's or Moody's could increase its borrowing costs and adversely affect operating results.

Potential changes in accounting practices may adversely affect the Company's financial results. The Company cannot predict the impact future changes in accounting standards or practices may have on public companies in general or the energy industry or in its operations specifically. New accounting standards could be issued by the FASB or the SEC which could impact the way the Company is required to record revenues, expenses, assets and liabilities. These changes in accounting standards could adversely affect the Company's reported earnings or could increase reported liabilities.

Operating Segments

In general, management's discussion of the Company's results of operations focuses on the contributions of its operating segments. However, the discussion of the Company's financial condition under Liquidity and Capital Resources is for the entire Company. The Company's two operating segments are Energy and Delivery. In addition, the Company presents its corporate and other operations, including certain expenses, which are not allocated to the Energy and Delivery segments, as a segment. For more information on the Company's operating segments, see Note 14 to the Consolidated Financial Statements.

Critical Accounting Policies

As of June 30, 2003, other than the adoption of SFAS No. 143, there have been no significant changes with regard to critical accounting policies as disclosed in MD&A in the Company's Annual Report on Form 10-K for the year ended December 31, 2002. The policies disclosed included the accounting for risk management and energy trading contracts at fair value and accounting for regulated operations. See Note 3 and Adoption of EITF 02-3 below for new accounting requirements associated with the accounting for energy trading contracts.

In addition, see Note 4 to the Consolidated Financial Statements for a discussion of other new accounting standards that will be adopted after June 30, 2003 and their impact on the Company.

PAGE 23

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Asset Retirement Obligations

Effective January 1, 2003, the Company adopted SFAS No. 143, which provides accounting requirements for the recognition and measurement of liabilities associated with the retirement of tangible long-lived assets. At June 30,
2003, the Company's asset retirement obligations totaled $719 million, the majority of which relates to the decommissioning of its nuclear units.

Asset retirement obligations are recognized at fair value as incurred and capitalized as part of the cost of the related tangible long-lived assets. In the absence of quoted market prices, the Company estimates the fair value of asset retirement obligations using present value techniques, involving discounted cash flow analysis. Measurement using such techniques is dependent upon many subjective factors, including the selection of discount and cost escalation rates, identification of planned retirement activities and related cost estimates and assertions of probability regarding the timing, nature and costs of such activities. Inputs and assumptions are based on the best information available at the time the estimates are made. However, estimates of future cash flows are highly uncertain by nature and may vary significantly from actual results.

Results Of Operations

The Company's discussion of its results of operations includes a summary of contributions by the operating segments to net income, an overview of consolidated 2003 results of operations, as compared to 2002, and a more detailed discussion of the results of operations of the operating segments. The 2002 segment results have been restated to reflect the transfer of the electric transmission operations from the Delivery segment to the Energy segment. All variances are stated as actual results for the three and six months ended June 30, 2003, as compared to the actual results for the same periods of 2002.

	Net Income		Operating Revenue		Operating Expenses
	(millions)
Three Months Ended June 30,	2003	2002	2003	2002	2003	2002
Energy	$ 72	$ 123	$ 959	$ 963	$815	$728
Delivery	61	52	253	255	143	148
Corporate and Other	-	-	3	3	4	4
Total	$133	$175	$1,215	$1,221	$962	$880
Six Months Ended June 30,	2003	2002	2003	2002	2003	2002
Energy	$316	$225	$2,188	$1,877	$1,623	$1,433
Delivery	129	104	532	490	284	279
Corporate and Other	79	-	6	6	13	8
Total	$524	$329	$2,726	$2,373	$1,920	$1,720

The following table provides data on electricity supplied by Energy and delivered by Delivery:

Three Months Ended June 30,	2003	2002
Electricity supplied (million mwhrs)	17.1	18.0
Electricity delivered to utility customers (million mwhrs)	17.1	18.0

Six Months Ended June 30,	2003	2002
Electricity supplied (million mwhrs)	37.1	35.6
Electricity delivered to utility customers (million mwhrs)	36.9	35.6

PAGE 24

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Consolidated Overview

Second Quarter 2003

Net income decreased $42 million to $133 million for the three months ended June 30, 2003, as compared to the same period in 2002. Regulated electric sales decreased, reflecting milder weather conditions, partially offset by customer growth. This decrease in regulated electric sales revenue was partially offset by higher other revenue.

Total operating expenses increased, compared to the second quarter of 2002, reflecting higher electric fuel and energy purchases and higher other taxes. In addition, as a result of implementing EITF 02-3, $74 million of other purchased energy commodities are reported as expenses in 2003. These increases were partially offset by decreases in purchased electric capacity and depreciation expenses, as compared to the second quarter of 2002. There was no significant change in the Company's effective income tax rate.

Six Months Ended June 30, 2003

Net income increased $195 million to $524 million for the six months ended June 30, 2003, as compared to the same period in 2002. The increase includes a net $84 million after-tax gain for changes in accounting principles, reflecting the adoption of SFAS No. 143 and EITF 02-3. Regulated electric sales increased for the first six months of 2003, as a result of comparably colder weather during the first quarter, customer growth and higher fuel rate recoveries. The Company's non-regulated electric revenue decreased, and non-regulated gas revenue and other revenue increased for the first six months of 2003.

Total operating expenses increased, compared to the first six months of 2002, primarily due to higher electric fuel and energy purchases and higher other taxes. In addition, as a result of implementing EITF 02-3, $142 million of other purchased energy commodities are reported as expenses in 2003. These increases were partially offset by decreases in purchased electric capacity and depreciation expenses, as compared to the first six months of 2002. There was no significant change in the Company's effective income tax rate.

Adoption of EITF 02-3

Effective January 1, 2003, the Company adopted EITF Issue 02-3. It rescinds EITF 98-10. Energy manages the Company's energy trading, hedging, arbitrage and power marketing activities through the Dominion Energy Clearinghouse (Clearinghouse). The implementation of EITF 02-3 primarily affects the timing of recognition in earnings for certain Clearinghouse energy-related contracts, as well as the presentation of gains and losses associated with energy-related contracts in the Consolidated Statement of Income. See Note 3 to the Consolidated Financial Statements.

The adoption of EITF 02-3 had the following initial and ongoing impact on the accounting for and presentation of Clearinghouse energy-related contracts in the Consolidated Financial Statements, effective January 1, 2003:

• Cumulative effect of adopting EITF 02-3: For non-derivative energy-related contracts initiated prior to October 25, 2002 in connection with the Company's energy trading activities and previously designated as trading under EITF 98-10, the Company recognized an after-tax loss of $55 million as the cumulative effect of a change in accounting principle effective January 1, 2003, which is reflected in the Corporate and Other segment.
• Derivative Contracts: Energy-related derivative contracts continue to be subject to fair value accounting. Under fair value accounting, unrealized changes in fair value are recorded in earnings each reporting period, as well as amounts realized as settlements occur. For those derivatives determined to be held for trading purposes, all changes in fair value, including amounts realized upon settlement, are presented in revenue on a net basis. For non-trading derivatives not designated as hedges, all unrealized changes in fair value are presented in other operations and maintenance expense on a net basis. For non-trading derivative contracts that involve physical delivery of commodities, gross sales contract settlements are presented in revenue, while gross purchase contract settlements are reported in expenses.

PAGE 25

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

• Non-Derivative Contracts: Non-derivative energy-related contracts, previously subject to fair value accounting under EITF 98-10, are now subject to accrual accounting. Under accrual accounting, the Company recognizes revenue or expense on a gross basis at the time of contract performance, settlement or termination. These contracts will no longer be reported at fair value in the Company's Consolidated Financial Statements.

The recognition and presentation requirements of EITF 02-3 described above were applied prospectively in 2003, and the Consolidated Statement of Income for the three and six months ended June 30, 2002 were not restated.

Adoption of SFAS 143

The principal impact of the Company's implementation of SFAS No. 143 is a change in the method of accounting for nuclear decommissioning. As a result of the change, the Company's income before income taxes increased for the three and six months ended June 30, 2003, as compared to the same period in 2002, by approximately $3 million and $7 million, respectively. When comparing SFAS No. 143 to the method of accounting used for nuclear decommissioning in 2002, the components of cost are presented differently in the income statement. For the comparative periods, depreciation expense decreased $8 million and $16 million for the three and six months ended June 30, 2003, respectively. Under SFAS No. 143, the Company also recorded $10 million and $19 million in three and six months ended June 30, 2003, respectively, representing accretion of its asset retirement obligations, in other operations and maintenance expense. Under its former accounting policy in 2002, the Company recorded $5 million and $10 million for th e three and six-month periods in other income for accretion expense related to its accumulated provision for nuclear decommissioning. For more information, see Note 3 to the Consolidated Financial Statements.

Energy Segment

Second Quarter 2003 Results

Energy's net income contribution decreased $51 million to $72 million for the three months ended June 30, 2003, as compared to the same period in 2002. The decrease in net income primarily reflects an $87 million increase in operating expenses and a $33 million decrease in income tax expense. The decrease also reflects a $4 million decrease in operating revenue and a $7 million increase in other income.

Regulated electric sales revenue decreased $60 million. Comparably milder weather during the second quarter of 2003 effectively decreased regulated electric sales $48 million, partially offset by the contribution of customer growth of $9 million. A reallocation of base rate revenue between the Delivery and Energy segments, effective January 1, 2003, decreased Energy's regulated electric sales revenue by approximately $20 million. Other factors decreased regulated electric sales by $1 million. There were 42 percent fewer cooling degree days in the second quarter of 2003, as compared to 2002. There were approximately 37,000 new electric customers added over the last twelve months.

Non-regulated electric sales revenue, net of applicable trading purchases, decreased $4 million as compared to the second quarter of 2002. This decrease included the effects of unfavorable price changes on the fair value of derivative contracts held and not yet settled and lower margins. Clearinghouse non-regulated gas sales revenue, net of applicable trading purchases, increased by $6 million, as compared to the second quarter of 2002. This increase reflects the effect of favorable price changes on unsettled derivative contracts and higher margins. In addition, the changes in both Clearinghouse non-regulated electric and gas revenue reflect the impact of adopting EITF 02-3. The impact included discontinuing fair value accounting for non-derivative contracts and the reclassification of purchases under derivative contracts no longer considered to be held for trading purposes.

Other revenue increased $54 million over the same period in 2002, primarily reflecting the impact of adopting EITF 02-3. This increase included $49 million associated with oil trading revenues, net of applicable purchases and revenues from sales of coal. Purchases of coal are reported in other purchased energy commodities expense in 2003 but were reported on a net basis with the related revenue in other revenue in 2002.

PAGE 26

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Operating expenses increased $87 million to $815 million in the second quarter of 2003. Electric fuel and energy purchases, net increased $21 million which included an increase of $5 million for purchases not subject to recovery through fuel rates. Electric fuel and energy purchases, net also increased due to the adoption of EITF 02-3, reflecting purchases under certain derivative contracts that are no longer considered held for trading purposes. Purchased electric capacity decreased $10 million, primarily due to scheduled rate reductions on certain supply contracts. Other purchased energy commodities increased $74 million, reflecting the reclassification of purchases under certain gas and coal contracts that are no longer considered held for trading purposes after the implementation of EITF 02-3.

Other operations and maintenance expense increased $7 million. The increase reflects a $17 million increase in outage and maintenance costs primarily at the nuclear power stations, partially offset by a $6 million decrease in general and administrative expenses. Other operations and maintenance expense also reflected decreases due to the adoption of EITF 02-3, now reflecting changes in the fair value of certain derivative energy contracts no longer considered held for trading purposes. Also, as previously discussed, other operations and maintenance expense increased $10 million for the accretion of the nuclear decommissioning asset retirement obligation beginning in 2003.

Depreciation expense decreased $10 million, primarily reflecting a decrease related to a change in the presentation of expenses associated with asset retirement obligations. As previously discussed, a significant component of such expenses is now reflected in other operations and maintenance beginning in 2003. Depreciation expense also reflects the extension of estimated useful lives of most fossil fuel stations and electric transmission property during the second quarter of 2002, substantially offset by the impact of new property additions. See Note 2 to the Consolidated Financial Statements.

Other taxes increased $5 million, primarily due to the impact in 2002 of a favorable resolution of sales and use tax issues. Similar benefits were not recognized in the second quarter of 2003.

See Adoption of SFAS 143 above for a discussion of the increase in other income.

Six Months Ended June 30, 2003 Results

Energy's net income contribution increased $91 million to $316 million for the six months ended June 30, 2003, as compared to the same period in 2002. The increase in net income primarily reflects a $311 million increase in operating revenue and an $18 million increase in other income, partially offset by a $190 million increase in operating expenses and a $52 million increase in income tax expense.

Colder weather during the first quarter and customer growth contributed approximately $28 million and $19 million, respectively, to the $32 million increase in regulated electric sales. Fuel rate recoveries, which are generally offset by related increases in electric fuel expense and do not materially affect net income, increased $46 million for the first six months of 2003. A reallocation of base rate revenue between the Delivery and Energy segments, effective January 1, 2003, decreased Energy's regulated electric sales revenue by $38 million. Other factors decreased regulated electric sales revenue by $23 million.

Non-regulated electric sales decreased $30 million in the six months ended June 30, 2003, as compared to 2002. Clearinghouse electric revenue, net of applicable trading purchases, decreased by $34 million as compared to 2002. This decrease included the effects of unfavorable price changes on the fair value of derivative contracts held and not yet settled, lower margins and the impact of adopting EITF 02-3. The impact included discontinuing fair value accounting for non-derivative contracts and the reclassification of purchases under derivative contracts no longer considered to be held for trading purposes. Revenue from wholesale marketing of utility generation increased $4 million and was principally driven by higher electric volumes.

PAGE 27

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Clearinghouse non-regulated gas revenue, net of applicable trading purchases, increased by $236 million, as compared to the first six months of 2002. This increase reflects the effect of favorable price changes on unsettled derivative contracts, higher margins and the impact of adopting EITF 02-3. The impact included discontinuing fair value accounting for non-derivative contracts and the reclassification of purchases under derivative contracts no longer considered to be held for trading purposes. Non-regulated gas revenue also reflects $32 million of realized and unrealized losses related to contracts held by one of the Company's unregulated subsidiaries involved in Clearinghouse operations as part of Dominion's consolidated price risk management strategy associated with anticipated sales of Dominion's 2003 natural gas production.

Other revenue increased $73 million over the same period in 2002, primarily reflecting the impact of adopting EITF 02-3. This increase included $64 million associated with oil trading revenue, net of applicable purchases, and revenue from sales of coal. Purchases of coal are reported in other purchased energy commodities expense in 2003 but were reported on a net basis with the related revenue in other revenue in 2002.

Operating expenses increased $190 million to $1.6 billion in the first six months of 2003. Electric fuel and energy purchases, net increased $92 million which included an increase of $46 million due to higher fuel rate recoveries, $17 million for purchases not subject to fuel rate recoveries and $3 million for expenses associated with increased wholesale marketing of utility generation. Electric fuel and energy purchases, net also increased $26 million due to the adoption of EITF 02-3, reflecting purchases under certain derivative contracts that are no longer considered held for trading purposes. Purchased electric capacity decreased $33 million, primarily due to scheduled rate reductions on certain supply contracts. Other purchased energy commodities increased $142 million, reflecting the reclassification of purchases under certain gas and coal contracts that are no longer considered held for trading purposes after the implementation of EITF 02-3.

Other operations and maintenance expense decreased $5 million reflecting a $77 million decrease due to the adoption of EITF 02-3, which now reflects changes in the fair value of certain derivative energy contracts no longer considered held for trading purposes. Increases in other operations and maintenance expense included a $24 million increase in general and administrative expenses and a $29 million increase in outage and maintenance costs primarily at the nuclear power stations. Also, as previously discussed, other operations and maintenance expense increased $19 million for the accretion of the nuclear decommissioning asset retirement obligation beginning in 2003.

Depreciation expense decreased $22 million, primarily reflecting a $16 million decrease related to a change in the presentation of expenses associated with asset retirement obligations. A significant component of such expenses is now reflected in other operations and maintenance beginning in 2003. The remaining decrease reflects the extension of estimated useful lives of most fossil fuel stations and electric transmission property during the second quarter of 2002, partially offset by the impact of new property additions. See Note 2 to the Consolidated Financial Statements.

Other taxes increased $16 million, primarily due to the impact in 2002 of a favorable resolution of sales and use tax issues and the recognition of business and occupation tax credits. Similar benefits were not recognized in the first six months of 2003.

Other income increased approximately $18 million, reflecting net realized gains of $6 million from the Company's decommissioning trusts and $10 million as a result of accretion expense related to the Company's provision for decommissioning being reported in other income in 2002. Accretion expense under SFAS No. 143 is reported in other operations and maintenance expense beginning in 2003.

PAGE 28

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Selected Information-Energy Trading Activities

See Selected Information-Energy Trading Activities in the reformatted portion of MD&A included in the current report on Form 8-K filed on May 9, 2003 for a detailed discussion of the energy trading, hedging and arbitrage
activities of the Clearinghouse and related accounting policies. For additional discussion of trading activities, see Market Rate Sensitive Instruments and Risk Management.

A summary of the changes in the unrealized gains and losses recognized for the Company's energy-related derivative instruments held for trading purposes during the six months ended June 30, 2003 follows:

	Amount
	(millions)
Net unrealized gain at December 31, 2002	$111
Reclassification of contracts - adoption of EITF 02-3:
Non-derivative energy contracts	(90)
Derivative energy contracts, not held for trading purposes	(18)
	(108)
Contracts realized or otherwise settled during the period	30
Net unrealized gain at inception of contracts initiated during the period	-
Changes in valuation techniques	-
Other changes in fair value	24
Net unrealized gain at June 30, 2003	$57

The balance of net unrealized gains and losses recognized for the Company's energy-related derivative instruments held for trading purposes at June 30, 2003 is summarized in the following table based on the approach used to determine fair value and the contract settlement or delivery dates:

	Maturity Based on Contract Settlement or Delivery Date(s)
Source of Fair Value:	Less than    1 year	1-2 years	2-3 years	3-5 years	In Excess of 5 Years	Total
	(millions)
Actively quoted(1)	$7	$15	$8	-	-	$30
Other external sources(2)	-	12	8	$6	$ 1	27
Models and other valuation techniques(3)	-	-	-	-	-	-
Total	$7	$27	$16	$6	$ 1	$57

(1) Exchange-traded and over-the-counter contracts.

(2) Values based on prices from over-the-counter broker activity and industry services and, where applicable, conventional option pricing models.

(3) Values based on the Company's estimate of future commodity prices when information from external sources is not available and use of internally-developed models, reflecting option pricing theory, discounted cash flow concepts, etc.

PAGE 29

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Delivery Segment

Second Quarter 2003 Results

Delivery's net income contribution increased $9 million to $61 million for the second quarter ended June 30, 2003, as compared to the same period in 2002. The increase in net income primarily reflects a $7 million increase in other income offset by a $2 million decrease in operating revenue and a $5 million decrease in operating expenses. Regulated electric sales increased $3 million over the comparable period. Comparably milder weather during the second quarter of 2003 decreased regulated electric sales $20 million. Customer growth of $4 million partially offset this decrease. In addition, a reallocation of the base rate revenues between Energy and Delivery, effective January 1, 2003, increased Delivery's regulated electric sales revenue by approximately $20 million. There were 42 percent fewer cooling degree days in the second quarter of 2003, as compared to 2002. There were approximately 37,000 new electric customers added over the last twelve months. Other revenue decreased by $5 million over the same pe riod in 2002 primarily due to the change in allocation of late payment fees and lower miscellaneous service revenues. Other income increased $7 million primarily due to interest income on a favorable resolution of tax audit issues.

Operating expenses decreased $5 million primarily due to decreases in other operation and maintenance expense offset by increases in other taxes. Other operations and maintenance expense decreased $10 million, reflecting primarily a decrease in general and administrative expenses. Other taxes increased $6 million, primarily due to the impact in 2002 of a favorable resolution of sales and use tax issues. Similar benefits were not recognized in the second quarter of 2003.

Six Months Ended June 30, 2003 Results

Delivery's net income contribution increased $25 million to $129 million for the six months ended June 30, 2003, as compared to the same period in 2002. The increase in net income primarily reflects a $42 million increase in operating revenue, partially offset by a $5 million increase in operating expenses and a $16 million increase in income tax expense. Colder weather in the first quarter of 2003 and customer growth contributed approximately $12 million and $8 million, respectively, to the $50 million increase in regulated electric sales, partially offset by $8 million due to other factors. A change in the allocation of the base rate revenues from Energy to Delivery, effective January 1, 2003, increased Delivery's revenues by approximately $38 million. Other revenue decreased by $8 million over the same period in 2002 primarily due to the change in allocation of late payment fees and lower miscellaneous service revenues. Other income increased by $3 million, reflecting $7 million of interest income on the favorable resolution of tax audit issues, offset by other insignificant items.

The increase in operating expenses is primarily due to increases in other taxes and other operations and maintenance expense, offset by a decrease in depreciation expense. Other taxes increased $7 million, primarily due to the impact in 2002 of a favorable resolution of sales and use tax issues. Similar benefits were not recognized in the first six months of 2003. A $5 million increase in service restoration costs due to ice storms and severe weather in the first quarter of 2003 was substantially offset by lower general and administrative expenses, materials and supplies and expenditures for contractors. See Note 2 to the Consolidated Financial Statements for a discussion of the change in estimated useful lives of the Company's distribution property in 2002.

PAGE 30

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Corporate and Other

Second Quarter and Six Months Ended June 30, 2003 Results

The Corporate and Other segment had no material impacts on net income for the three months ended June 30, 2003, as compared to the same period in 2002.

The change in the corporate segment's contribution to reported earnings, for the first six months of 2003, as compared to the same period last year, is primarily attributable to the following:

• $8 million ($5 million after tax) related to severance costs for workforce reduction, including $3 million attributable to the Energy segment and $5 million attributable to the Delivery segment;
• $139 million after-tax gain, representing the cumulative effect of a change in accounting principle from adoption of SFAS No. 143, including $140 million after-tax gain attributable to the Energy segment and $1 million after-tax loss attributable to the Delivery segment; and
• $55 million after-tax charge, representing the cumulative effect of a change in accounting principle from adoption of EITF 02-3, all of which was related to Energy's operations.

For more information on the cumulative effect of the changes in accounting principles, see Note 3 to the Consolidated Financial Statements.

Liquidity and Capital Resources

The Company depends on both internal and external sources of liquidity to provide working capital and to fund capital requirements. Short-term cash requirements not met by cash flow from operations are generally satisfied with proceeds from short-term borrowings. Long-term cash needs are met through sales of securities and additional long-term debt financings.

Internal Sources of Liquidity

As presented on the Company's Consolidated Statements of Cash Flows, net cash flow provided by operating activities totaled approximately $766 million and $430 million during the six months ended June 30, 2003 and 2002, respectively. The Company's management believes that its operations provide a stable source of cash flow sufficient to contribute to planned levels of capital expenditures and to maintain current dividends payable to Dominion. As noted above, the Company uses a combination of short-term borrowings and sales of securities to fund capital requirements not covered by the timing or amounts of operating cash flows.

The Company's operations are subject to risks and uncertainties that may negatively impact cash flows from operations. See the discussion of such factors in Internal Sources of Liquidity in the MD&A of the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

External Sources of Liquidity

In the External Sources of Liquidity section of the MD&A in the Company's Annual Report on Form 10-K for the year ended December 31, 2002, the Company discussed its use of capital markets as well as the impact of credit ratings on the accessibility and costs of using these markets. In addition, the Company discussed various covenants present in the enabling agreements underlying the Company's debt. As of June 30, 2003, there have been no downgrades of the Company's credit ratings. In addition, there have been no changes to or events of default under the Company's debt covenants.

PAGE 31

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Long-term Debt

In February 2003, the Company issued $400 million aggregate principal amount of its 2003 Series A 4.75 percent senior notes due March 1, 2013. The Company used the cash proceeds for general corporate purposes, including the repayment of other debt.

In February 2003, the Company repaid $10 million of maturing medium-term notes.

In April 2003, the Company repaid $200 million of 1993 Series B, 6.625 percent mortgage bonds.

Joint Credit Facilities

Dominion, CNG and the Company are parties to two joint credit facilities that allow aggregate borrowings of up to $2 billion. In May 2003, Dominion, CNG and the Company entered into a joint credit facility that allows aggregate borrowings of up to $1.25 billion. This credit facility replaced the $1.25 billion 364-day credit facility that matured during the second quarter of 2003. In May 2002, Dominion, CNG and the Company entered into a $750 million 3-year revolving credit facility that terminates in May 2005. The credit facilities will be used for working capital; as support for the combined commercial paper programs of Dominion, CNG and the Company; and other general corporate purposes.

The 3-year facility can also be used to support up to $200 million of letters of credit. At June 30, 2003, total outstanding letters of credit supported by the 3-year facility were $199 million, which were issued on behalf of CNG and other Dominion subsidiaries.

Short-term Debt

At June 30, 2003, net borrowings under the commercial paper program were $90 million, a decrease of $353 million from December 31, 2002. Commercial paper borrowings are used primarily to fund working capital requirements and may vary significantly during the course of the year depending upon the timing and amount of cash requirements not satisfied by cash provided from operations.

Borrowings from Parent

The Company and its subsidiaries have made certain borrowings from Dominion pursuant to a short-term demand note. At June 30, 2003 and December 31, 2002, net outstanding borrowings under this note totaled $215 million and $100 million, respectively. Interest charges related to this note for the three and six months ended June 30, 2003 were not material.

Amounts Available under Shelf Registrations

At June 30, 2003, the Company had $1.325 billion of available capacity under currently effective shelf registrations with the SEC that would permit the Company to issue debt and preferred securities to meet future capital requirements.

Investing Activities

During the six months ended June 30, 2003, investing activities resulted in a net cash outflow of $556 million. These activities included plant construction and other property expenditures of $458 million and nuclear fuel expenditures of $58 million. The plant expenditures related to generation-related projects totaled approximately $262 million and included costs related to environmental upgrades, nuclear reactor head replacement expenditures and other capital improvements. The plant expenditures related to transmission and distribution projects totaled approximately $179 million, reflecting routine capital improvements and expenditures associated with new connections. Other general and information technology projects totaled approximately $17 million. Investing activities also include $36 million of contributions to the Company's nuclear decommissioning trusts.

PAGE 32

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Contractual Obligations

As of June 30, 2003, other than scheduled maturities of new debt issued during the first six months of 2003, there have been no significant changes to the contractual obligations disclosed in MD&A in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

Future Issues

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 Consolidated Financial Statements. This section should be read in conjunction with Future Issues and Outlook in MD&A in the Company's Annual Report on Form 10-K for the year ended December 31, 2002.

Proposed Pilot Programs

In March 2003, the Company filed an application with the Virginia State Corporation Commission (Virginia Commission) for approval of three proposed new electric retail access pilot programs. The pilots will make available to competitive service providers up to 500 megawatts of load, with expected participation of more than 65,000 customers from a variety of customer classes. If approved by the Virginia Commission, the proposed pilots will run begin January 1, 2004. To encourage participation by competitive suppliers and customers, the Company has proposed a significant reduction in the wires charges applicable to the pilot programs in 2004 and 2005.

In June 2003, as the result of meetings with interested parties and the Virginia Commission Staff, the Company filed revisions to certain provisions of the pilot programs. The revisions include, among other items, a proposal to reduce the wires charges under the pilot through the remainder of the capped rate period, as well as a request for the opportunity to modify the pilot programs as necessary to more successfully transition to the period after capped rates have expired or have been terminated. The Company also offered to consider an increase in the wires charge reduction with a corresponding decrease in the size (megawatts) of the pilots as a means to stimulate activity in the pilot programs.

In July 2003, the Virginia Commission's Staff recommended approval of the pilot programs, with certain modifications.

Rate Matters

In July 2003, the Company filed its 2004 fuel factor application with the Virginia Commission. If approved, the application would result in a fuel factor of 2.331cents per kWh for 2004. The application requests a total fuel factor increase of $441 million, which includes a projected $308 million under-recovery balance as of December 31, 2003. The under-recovery balance is attributed to nuclear plant outages for reactor vessel head replacements, increased fuel prices and an unusually cold winter. The Company also suggested for consideration, a cost recovery mechanism that would amortize the under-recovery balance over two years. Representatives of some of the Company's largest industrial customers have asked the Virginia Commission to deny the application. A hearing on the fuel factor request has been set for October 2003.

In July 2003, the Company filed an application with the Virginia Commission to revise its projected market prices for generation and resulting wires charges for 2004. The Company also proposed minor changes to its competitive service provider tariff. The Company has not proposed any changes to the methodology used to derive market prices, as previously approved by the Virginia Commission in 2003.

PAGE 33

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

Monitoring the Recovery of Stranded Costs

In July 2003, the Virginia Commission submitted its report on the activities of the stranded cost work group. The report addressed definitions for "stranded costs" and "just and reasonable net stranded costs," discussed methodologies for monitoring the over-recovery or under-recovery of stranded costs, and discussed administrative and legislative recommendations. The Virginia Commission's Staff analyzed the recommendations of the work group participants and provided recommendations for consideration by the Commission on Electric Utility Restructuring.

Regional Transmission Organization (RTO)

In June 2003, the Company submitted an application to the Virginia Commission, as required by the Virginia Restructuring Act, requesting authorization to become a transmission owning member of PJM Interconnection, LLC (PJM) and transfer operational control of the Company's transmission facilities to PJM on November 1, 2004. The application stated that the integration of the Company's transmission facilities into PJM will provide increased access to competitively priced wholesale power which will provide savings to the Company's retail customers and ensure reliable service to the Company's retail customers. In addition, the proposed transfer is expected to facilitate the development of competitive wholesale and retail electricity markets. The application contained a cost-benefit study of the Company's integration into PJM, as required by the Virginia Restructuring Act, that supported the expected savings to customers. It is uncertain when the Virginia Commission will act on the application. The Company intend s to file an application to join PJM with the North Carolina Public Utilities Commission and FERC.

FERC Standard Market Design Proposal

In April 2003, FERC issued a discussion document addressing several issues raised by state regulatory commissions and market participants in FERC's proposed Standard Market Design (SMD). The document proposes certain changes to SMD and to hold technical conferences to work with the states and market participants to develop reasonable timetables for moving forward on the formation of RTOs. FERC also stated that it would not use the SMD rulemaking to overturn prior RTO orders where there is overlap. It is uncertain what impact, if any, these matters may have on the Company's efforts to join PJM.

Environmental Matters

As previously reported in Note 21 to the Consolidated Financial Statements for the year ended December 31, 2002, the Company received a Notice of Violation in 2000 from the United States Environmental Protection Agency related to some specified construction projects at the Mt. Storm Power Station in West Virginia. Thereafter, New York State filed a suit against the Company alleging similar violations, and the suit was stayed. The Company reached an agreement in principle with the federal government and the state of New York to resolve the matter, and the states of Virginia, West Virginia, Connecticut and New Jersey joined the United States and the state of New York in seeking to reach a final agreement with the Company. A settlement agreement in the form of a proposed Consent Decree was agreed to on April 21, 2003, by the U.S. Department of Justice and the U.S. Environmental Protection Agency for the United States of America, by the states of Virginia, West Virginia, Connecticut, New Jersey and New York and by the Company. In accordance with the settlement, the United States filed an action in the Eastern District of Virginia against the Company and the Consent Decree was lodged with that court to settle that action. Virginia and West Virginia also filed complaints in intervention in the Virginia federal district court. The New York State federal district court action has been transferred to the Virginia federal district court, and it is anticipated that, in addition to New York, Connecticut and New Jersey will join as plaintiffs in that proceeding. The EPA public comment period has now closed. It is anticipated that in the near future the Virginia federal district court will be asked to enter the Consent Decree finalizing the settlement and resolving the underlying actions, but retaining jurisdiction pursuant to the terms of the Consent Decree. The settlement is consistent with the previously reported agreement in principle and includes payment of a $5 million civil penalty, an obligation to fund $14 million f or environmental projects and a commitment to improve air quality under the Consent Decree estimated to involve

PAGE 34

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)

expenditures of $1.2 billion. The Company has already incurred certain capital expenditures for environmental improvements at its coal-fired stations in Virginia and West Virginia and has committed to additional measures in its current financial plans and capital budget to satisfy the requirements of the Consent Decree. As of June 30, 2003, the Company had accrued $19 million for the civil penalty and the funding of the environmental projects, substantially all of which was recorded in 2000.

Restructuring of Contract with Non-Utility Generating Facility

In July 2003, the Company reached an agreement, pending regulatory approvals, to pay approximately $150 million for the termination of a long-term power purchase contract and the purchase of the related generating facility used by a non-utility generator to provide electricity to the Company. The Company expects the transaction to be completed in the fourth quarter of 2003, resulting in an after-tax charge in the range of $65 million to $85 million relating to the purchase and termination of the long-term power purchase contract. The transaction is part of an ongoing program which seeks to achieve competitive cost structures at the Company's power generating business.

Accounting Matters

Recently Issued Accounting Standards

See Note 4 to the Consolidated Financial Statements for a description of the following new accounting standards which were issued during 2003, and generally become effective after June 30, 2003:

• FASB Interpretation No. 46, Consolidation of Variable Interest Entities;
• SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities;
• SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity ;
• SFAS 133 Implementation Issue No. C20, Interpretation of the Meaning of 'Not Clearly and Closely Related' in Paragraph 10(b) regarding Contracts with a Price Adjustment Feature; and
• EITF Issue No. 01-8, Determining Whether an Arrangement Contains a Lease.

PAGE 35

VIRGINIA ELECTRIC AND POWER COMPANY

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, Management's Discussion and Analysis of Financial Condition and Results of Operations of this Form 10-Q. The reader's attention is directed to those paragraphs for discussion of various risks and uncertainties that may affect the future of the Company.

Market Rate Sensitive Instruments and Risk Management

The Company's financial instruments, commodity contracts and related derivative instruments are exposed to potential losses due to adverse changes in interest rates, equity security prices, foreign currency exchange rates and commodity prices, as described below. Interest rate risk generally is related to the Company's outstanding debt. The Company is exposed to foreign exchange risk associated with purchases of certain nuclear fuel processing services denominated in foreign currencies. Commodity price risk is present in the Company's electric operations and energy marketing and trading operations due to the exposure to market shifts for prices received and paid for natural gas, electricity and other commodities. The Company uses derivative instruments to manage price risk exposures for these operations. In addition, the Company is exposed to equity price risk through various portfolios of equity securities.

The Company's 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 percent unfavorable change in commodity prices, interest rates and foreign currency exchange rates.

Commodity Price Risk-Trading Activities

As part of its strategy to market energy and to manage related risks, the Company manages a portfolio of commodity-based financial derivative instruments held for trading purposes. These contracts are sensitive to changes in the prices of natural gas, electricity and certain other commodities. The Company uses established policies and procedures to manage the risks associated with these price fluctuations and uses various derivative instruments, such as futures, forwards, swaps and options, to mitigate risk by creating offsetting market positions. In addition, the Company seeks to use its generation capacity, when not needed to serve customers in its service territory, to satisfy commitments to sell energy.

A hypothetical 10 percent unfavorable change in commodity prices would have resulted in a decrease of approximately $35 million in the fair value of its commodity-based financial derivative contracts held for trading purposes as of June 30, 2003. A hypothetical 10 percent unfavorable change in commodity prices, as determined at December 31, 2002, would have resulted in a decrease of approximately $26 million in the fair value of its commodity-based financial derivative contracts held for trading purposes.

Interest Rate Risk

The Company manages its interest rate risk exposure predominantly by maintaining a balance of fixed and variable rate debt. The Company also enters into interest rate sensitive derivatives, including interest rate swaps and interest rate lock agreements. For financial instruments outstanding at both June 30, 2003 and December 31, 2002, the impact on annual earnings of a hypothetical 10 percent increase in interest rates would not be significant.

Foreign Exchange Risk

The Company manages its foreign exchange risk exposure associated with anticipated future purchases of nuclear fuel processing services denominated in foreign currencies by utilizing currency forward contracts. As a result of holding these contracts as hedges, the Company's exposure to foreign currency risk is minimal. A hypothetical 10 percent unfavorable change in relevant foreign exchange rates would have resulted in a decrease of approximately $15 million and $17 million in the fair value of currency forward contracts held by the Company at June 30, 2003 and December 31, 2002, respectively.

PAGE 36

VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
(Continued)

Investment Price Risk

The Company is subject to investment price risk due to marketable securities held as investments in nuclear decommissioning trust funds. In accordance with current accounting standards, these marketable securities are reported on the Consolidated Balance Sheets at fair value. The Company recognized net realized and unrealized gains on decommissioning trust investments of $54 million for the first six months of 2003 and net realized and unrealized losses of $56 million for the year ended December 31, 2002.

Dominion also sponsors employee pension and other postretirement benefit plans, in which the Company's employees participate, that hold investments in trusts to fund benefit payments. To the extent that the values of investments held in these trusts decline, the effect will be reflected in the Company's recognition of the periodic cost of such employee benefit plans and the determination of the amount of cash to be contributed to the employee benefit plans.

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VIRGINIA ELECTRIC AND POWER COMPANY

ITEM 4. CONTROLS AND PROCEDURES

Senior management, including the Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation process, the Chief Executive Officers and Chief Financial Officer have concluded that the Company's disclosure controls and procedures are effective and that there have been no changes in the Company's internal control over financial reporting that occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. Since that evaluation process was completed, there have been no significant changes in internal controls or in other factors that could significantly affect these controls.

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VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, the Company and its subsidiaries 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 Company and its subsidiaries, or permits issued by various local, state and federal agencies for the construction or operation of facilities. From time to time, there also may be administrative proceedings on these matters pending. In addition, in the normal course of business, the Company and its subsidiaries are involved in various legal proceedings. Management believes that the ultimate resolution of these proceedings will not have a material adverse effect on the Company's financial position, liquidity or results of operations. See Future Issues in Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) for discussion on various regulatory proceedings to which the Company and its subsidiaries are a party.

In connection with the Notice of Violation received in 2000 from the Environmental Protection Agency related to some specified construction projects at the Mt. Storm Power Station in West Virginia, a settlement agreement in the form of a proposed Consent Decree was agreed to on April 21, 2003 by the U.S. government, the Company and the five states involved. See Environmental Matters in the MD&A of this Form 10-Q for further information relating to this development.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On April 25, 2003, by consent in lieu of a meeting, Dominion Resources, Inc., the sole holder of all the voting common stock of the Company, elected the following persons to serve as Directors: Thos. E. Capps, Thomas F. Farrell, II, and Thomas N. Chewning.

ITEM 5. OTHER INFORMATION

Virginia Regulatory Matters

As previously reported, the Virginia Commission adopted rules in August 2002 regarding consolidated billing by competitive service providers. In June 2003, the Company implemented system changes that were required in order to accommodate the consolidated billing. To date, no supplier has expressed any interest in this billing option.

In July 2003, the Company filed its 2004 fuel factor application with the Virginia Commission. See Rate matters in MD&A of this Form 10-Q for further information on this matter.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:
	3.1	Restated Articles of Incorporation, as amended, as in effect on May 6, 1999, as amended December 6, 2002 (Exhibit 3.1, Form 10-K for the year ended December 31, 2002, File No. 1-2255, incorporated by reference).
	3.2	Bylaws, as amended, as in effect on April 28, 2000 (Exhibit 3, Form 10- Q for the period ended March 31, 2000, File No. 1-2255, incorporated by reference).
	10.1	Form of Employment Continuity Agreement for certain officers of Dominion, amended and restated July 15, 2003 (filed herewith).

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VIRGINIA ELECTRIC AND POWER COMPANY
PART II. - OTHER INFORMATION

(a) Exhibits (continued):
	10.2	Dominion Resources, Inc. Executives' Deferred Compensation Plan, effective January 1, 1994 and as amended and restated July 15, 2003 (filed herewith).
	12.1	Ratio of earnings to fixed charges (filed herewith).
	12.2	Ratio of earnings to fixed charges and preferred dividends (filed herewith).
	31.1	Certification by Registrant's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	31.2	Certification by Registrant's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	31.3	Certification by Registrant's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	31.4	Certification by Registrant's Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	31.5	Certification by Registrant's Senior Vice President and Chief Financial Officer (Principal Financial Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
	32	Certification to the Securities and Exchange Commission by Registrant's Chief Executive Officers and Principal Financial Officer, as required by Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).
	99	Condensed consolidated earnings statements (unaudited) (filed herewith).

(b) Reports on Form 8-K:
	1.	The Company filed a report on Form 8-K on May 9, 2003 relating to the segment realignment of its electric transmission operations.

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
August 11, 2003	/s/ Steven A. Rogers
	Steven A. Rogers Vice President (Principal Accounting Officer)

EX-10.1

Exhibit 10.1

Revised 7/15/2003

FORM OF
EMPLOYMENT CONTINUITY AGREEMENT

THIS AGREEMENT dated as of _____________ (the "Agreement Date") is made by and between Dominion Resources, Inc. ("DRI" or the "Company"), a Virginia corporation, and __________ (the "Executive").

ARTICLE I
PURPOSES

The Board of Directors of DRI (the "Board") has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued services of the Executive, despite the possibility or occurrence of a Change in Control of the Company. The Board believes that this objective may be achieved by giving key management employees assurances of financial security in case of a pending or threatened change in control, so that they will not be distracted by personal risks and will continue to devote their full time and best efforts to the performance of their duties. The Board also wants to provide the Executive with compensation and benefits arrangements upon a Change in Control which are competitive with those of similarly situated corporations.

ARTICLE II
CERTAIN DEFINITIONS

When used in this Agreement, the terms specified below shall have the following meanings:

2.1       "Agreement Term" means:

(a)  Except as provided in Section 2.1(b), the Period commencing on the Agreement Date and ending on the third anniversary of the Agreement Date. Commencing on the third anniversary of the Agreement Date and each subsequent anniversary of the Agreement Date, the Agreement Term shall be automatically extended for an additional one-year term, unless at least 30 days prior to the last day of any such extended Agreement Term, the Company shall give notice to the Executive that the Agreement Term shall not be extended. The Agreement Term shall include the Employment Period.

(b)  If a Potential Change in Control (as defined below) occurs, the Agreement Term shall be automatically extended to the later of (i) the period described in Section 2.1(a) or (ii) 30 days after the date the Change in Control is completed or a public announcement is made that the transaction will not occur (the "Change in Control Extension"). Commencing on the day immediately after the expiration of the Change in Control Extension, and each subsequent anniversary of such day, the Agreement Term shall be automatically extended for an additional one-year term, unless at least 30 days prior to the last day of the Change in Control Extension or of any such extended Agreement Term, the Company shall give notice to the Executive that the Agreement Term shall not be extended. A Potential Change in Control shall be deemed to have occurred if (i) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control of the Company, (ii) the Company or any person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control of the Company; or (iii) the Board adopts a resolution to the effect that a Potential Change in Control of the Company has occurred for purposes of this Agreement.

2.2       "Accrued Obligation" See Section 5.4(a).

2.3       "Annual Base Salary" See Section 3.2(a).

2.4       "Annual Bonus" See Section 3.2(b).

2.5       "Bonus Plan" See Section 3.2(b).

2.6       "Cause" See Section 4.3.

2.7       "Change in Control" means:

(a) any person, including a "group" as defined in Section 13(d)(3) of the Act becomes the owner or beneficial owner of DRI securities having 20% or more of the combined voting power of the then outstanding DRI securities that may be cast for the election of DRI's directors (other than as a result of an issuance of securities initiated by DRI, or open market purchases approved by the DRI Board, as long as the majority of the DRI Board approving the purchases is also the majority at the time the purchases are made); or

(b) as the direct or indirect result of, or in connection with, a cash tender or exchange offer, a merger or other business combination, a sale of assets, a contested election, or any combination of these transactions, the persons who were directors of DRI before such transactions cease to constitute a majority of the DRI Board, or any successor's board, within two years of the last of such transactions.

2.8      "Code" means the Internal Revenue Code of 1986, as amended

2.9      "Company Certificate" See Section 6.1.

2.10    "Disability" See Section 4.1.

2.11     "Disability Effective Date" See Section 4.1

2.12     "Effective Date" means the first date during the Agreement Term on which a Change in Control occurs. Anything in this Agreement to the contrary notwithstanding, if a Change in Control occurs and the Executive's employment with the Company had terminated prior to the date on which the Change in Control occurs, and if it is reasonably demonstrated by the Executive that such termination of employment (a) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control, or (b) otherwise arose in connection with or in anticipation of a Change in Control, then for all purposes of this Agreement, the "Effective Date" shall mean the date immediately prior to the date of such termination of employment.

2.13      "Employment Period" means the period commencing on the Effective Date and ending on the third anniversary of such date.

2.14      "Excise Taxes" See Section 6.1(a).

2.15      "Gross-up Payment" See Section 6.1(a).

2.16      "Performance Period" See Section 3.2(b).

2.17      "Plans" See Section 3.2(c).

2.18      "Potential Parachute Payments" See Section 6.1(a).

2.19      "Severance Incentive" means the greater of (i) the target annual incentive under an Incentive Plan applicable to the Executive for the Performance Period in which the Termination Date occurs, or (ii) the highest actual annual incentives paid (or payable, to the extent not previously paid) to the Executive under the Incentive Plan during the three calendar years preceding the calendar year in which the Termination Date occurs.

2.20      "Termination Date" means the date of termination of the Executive's employment; provided, however, that if the Executive's employment is terminated by reason of Disability, then the Termination Date shall be the Disability Effective Date (as defined in Section 4.1(a)).

2.21      "Welfare Plans" See Section 3.2(d).

ARTICLE III
TERMS OF EMPLOYMENT

3.1       Position and Duties.

(a)  The Company hereby agrees to continue the Executive in its employ during the Employment Period and, subject to Article IV of this Agreement, the Executive agrees to remain in the employ of the Company subject to the terms and conditions hereof.

(b)  During the Employment Period, the Executive (i) will devote his or her or her knowledge, skill and best efforts on a full-time basis to performing his or her or her duties and obligations to the Company (with the exception of absences on account of illness or vacation in accordance with the Company's policies and civic and charitable commitments not involving a conflict with the Company's business), and (ii) will comply with the directions and orders of the Board of Directors, the Chief Executive Officer or other superior officer of the Company with respect to the performance of his or her duties.

3.2     Compensation.

(a) Base Salary. During the Employment Period, the Executive shall receive an annual base salary ("Annual Base Salary"), which shall be paid at a monthly rate at least equal to twelve times the highest monthly base salary paid or payable, including any base salary which has been earned but deferred, to the Executive by the Company in respect of the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last salary increase awarded to the Executive prior to the Effective Date and, thereafter, at least annually, and shall be increased at any time and from time to time as shall be substantially consistent with increases in base salary awarded to other peer executives of the Company. Annual Base Salary shall not be reduced after any such increase unless such reduction is part of a policy, program or arrangement applicable to peer executives of the Company a nd of any successor entity, and the term Annual Base Salary as used in this Agreement shall refer to Annual Base Salary as so adjusted.

(b) Annual Bonus. In addition to Annual Base Salary, the Company shall make or cause to be made to the Executive an incentive award (the "Annual Bonus") for each Performance Period which ends during the Employment Period. "Performance Period" means each period of time designated in accordance with any annual incentive award arrangement ("Bonus Plan") which is based upon performance. The Executive's target and maximum Annual Bonus with respect to any Performance Period shall not be less than the largest target and maximum annual incentive award payable with respect to the Executive under the Company's annual incentive program as in effect at any time in the three-year period immediately preceding the Effective Date.

(c) Incentive, Savings and Retirement Plans. During the Employment Period, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs ("Plans") applicable generally to other peer executives of the Company, but in no event shall such Plans provide the Executive with incentives or savings and retirement benefits which, in each case, are less favorable, in the aggregate than the greater of (i) those provided by the Company for the Executive under such Plans as in effect at any time during the 90-day period immediately preceding the Effective Date, or (ii) those provided generally at any time after the Effective Date to other peer executives of the Company. The Plans shall include both tax-qualified retirement plans and nonqualified retirement plans.

(d) Welfare Benefit Plans. During the Employment Period, the Executive and/or the Executive's family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs ("Welfare Plans") provided by the Company (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance benefits), but in no event shall such Welfare Plans provide the Executive with benefits which are less favorable, in the aggregate than the greater of (i) those provided by the Company for the Executive under such Welfare Plans as were in effect at any time during the 90-day period immediately preceding the Effective Date, or (ii) those provided generally at any time after the Effective Date to other peer executives of the Company.

(e) Other Employee Benefits. During the Employment Period, the Executive shall be entitled to other employee benefits and perquisites in accordance with the most favorable plans, practices, programs and policies of the Company, as in effect with respect to the Executive at any time during the 90-day period immediately preceding the Effective Date, or if more favorable, as in effect generally with respect to other peer executives of the Company. These other employee benefits and perquisites include, but are not limited to, vacation, use of a company car, parking benefits and financial planning.

(f) Stock Incentives. At the Effective Date, the Executive shall become fully vested in any and all stock incentive awards granted to the Executive under the Dominion Resources, Inc. Incentive Compensation Plan or any other plan or arrangement ("Incentive Plans") which have not become exercisable as the Effective Date. All forfeiture conditions that as of the Effective Date are applicable to any deferred stock unit, restricted stock or restricted share units awarded to the Executive by the Company pursuant to any Incentive Plan or otherwise shall lapse immediately at the Effective Date.

(g) Subsidiaries. To the extent that immediately prior to the Effective Date, the Executive has been on the payroll of, and participated in the incentive or employee benefit plans of, a subsidiary of DRI, the references to the Company contained in Sections 3.2(a) through 3.2(f) and the other Sections of this Agreement referring to benefits to which the Executive may be entitled shall be read to refer to such subsidiary.

ARTICLE IV
TERMINATION OF EMPLOYMENT

4.1  Disability. During the Agreement Term, the Company may terminate the Executive's employment upon the Executive's Disability. The Executive's employment shall terminate effective on the 30th day (the "Disability Effective Date") after the Executive's receipt of written notice of termination from the Company unless, before the Disability Effective Date, the Executive shall have resumed the full-time performance of the Executive's duties. "Disability" means a condition, resulting from bodily injury or disease, that renders, and for a six consecutive month period has rendered, the Executive unable to perform substantially the duties pertaining to his or her employment with the Company. A return to work of less than 14 consecutive days will not be considered an interruption in the Executive's six consecutive months of disability. Disability will be determined by the Company on the basis of medical evidence satisfactory to the Company.

4.2  Death. The Executive's employment shall terminate automatically upon the Executive's death during the Agreement.
Term.

4.3  Cause. The Company may terminate the Executive's employment during the Employment Period for Cause. For purposes       
of this Agreement, "Cause" means (a) fraud or material misappropriation with respect to the business or assets of the Company,
(b) persistent refusal or willful failure of the Executive to perform substantially his or her duties and responsibilities to the Company, which continues after the Executive receives notice of such refusal or failure, (c) conviction of a felony or crime involving moral turpitude, or (d) the use of drugs or alcohol that interferes materially with the Executive's performance  of his or her duties.

4.4  Constructive Termination. The Executive may terminate the Executive's employment for Constructive Termination at any time during the Employment Period. "Constructive Termination" means any material breach of this Agreement by the Company during the Employment Period, including:

(a) the failure to maintain the Executive in the office or position, or in a substantially equivalent office or position, held by the Executive immediately prior to the Effective Date;

(b) a material adverse alteration in the nature or scope of the Executive's position, duties, functions, responsibilities or authority as compared to the nature or scope immediately prior to the Effective Date;

(c) a reduction of the Executive's Annual Base Salary in violation of Section 3.2(a) or a reduction in the Executive's Annual Bonus in violation of Section 3.2(b);

(d) a failure by the Company to provide the Executive with increase in Annual Base Salary or participation in Bonus Plans or Incentive Plans comparable to peer executives of the Company;

(e) the failure of any successor to the Company to assume this Agreement;

(f) a relocation of more than 50 miles of (i) the Executive's workplace, or (ii) the principal offices of the Company (if such offices are the Executive's workplace), in each case without the consent of the Executive; or

(g) any failure by the Company to comply with Section 3.2(f).

An act or omission shall not constitute Constructive Termination unless (1) the Executive gives written notice to the Company indicating that the Executive intends to terminate employment under this Section 4.4; (2) the Executive's voluntary termination occurs within 60 days after the Executive knows or reasonably should know of an event described in subsection (a)-(g) above, or within 60 days after the last in a series of such events, and (3) the Company has failed to remedy the event described in subsection (a)-(g) above as the case may be, within 30 days after receiving the Executive's written notice. If the Company remedies the event described in subsection (a)-(g), as the case may be, within 30 days after receiving the Executive's written notice, the Executive may not terminate employment under this Section 4.4 on account of the event specified in the Executive's notice.

ARTICLE V
OBLIGATIONS OF THE COMPANY UPON TERMINATION

5.1 If by the Executive for Constructive Termination or by the Company Other Than for Cause or Disability. If, during the Employment Period, the Company shall terminate the Executive's employment other than for Cause or Disability, or if the Executive shall terminate employment for Constructive Termination, the Company's obligations to the Executive shall be as follows:

(a) The Company shall, within thirty business days of such termination of employment, pay the Executive a cash payment equal to the sum of the following amounts:

(i) to the extent not previously paid, the Annual Base Salary and any accrued paid time off through the Termination Date;

(ii) an amount equal to the product of (i) the Annual Bonus (as defined in Section 3.2(b)) for the Performance Period in which the Termination Date occurs multiplied by (ii) a fraction, the numerator of which is the number of days actually worked during such Performance Period, and the denominator of which is 365; or, if greater, the amount of any Annual Incentive paid or payable to the Executive with respect to the Performance Period for the year in which the Termination Date occurs; and

(iii) all amounts previously deferred by the Executive under any nonqualified deferred compensation plan sponsored by the Company, together with any accrued earnings thereon, and not yet paid by the Company.

(b) The Company shall, within thirty business days of such termination of employment, pay the Executive a cash payment equal to three (3) times the sum of the Executive's Annual Base Salary and the Severance Incentive.

(c) On the Termination Date, the Executive shall become fully vested in any and all stock incentive awards granted to the Executive under any Plan which have not become exercisable as of the Termination Date and all stock options (including options vested as of the Termination Date) shall remain exercisable until the applicable option expiration date. All forfeiture conditions that as of the Termination Date are applicable to any deferred stock unit, restricted stock or restricted share units awarded to the Executive by the Company pursuant to the LTIP, a successor plan or otherwise shall lapse immediately.

(d) Except as provided in subsections (e) and (f), during the Employment Period (or until such later date as any Welfare Plan of the Company may specify), the Company shall continue to provide to the Executive and the Executive's family welfare benefits (including, without limitation, disability, individual life and group life insurance benefits, but excluding medical or other health plans) which are at least as favorable as those provided under the most favorable Welfare Plans of the Company applicable (i) with respect to the Executive and his or her family during the 90-day period immediately preceding the Termination Date, or (ii) with respect to other peer executives and their families during the Employment Period. In determining benefits under such Welfare Plans, the Executive's annual compensation attributable to base salary and incentives for any plan year or calendar year, as applicable, shall be deemed to be not less than the Executive's Annual Base Salary and Annual Incentive. The cost of the welfare benefits provided under this Section 5.1(d) shall not exceed the cost of such benefits to the Executive immediately before the Termination Date or, if less, the Effective Date. Notwithstanding the foregoing, if the Executive obtains comparable coverage under any Welfare Plans sponsored by another employer, then the amount of coverage required to be provided by the Company hereunder shall be reduced by the amount of coverage provided by such other employer's Welfare Plans.

(e) If the Executive elects to convert any group term life insurance to an individual policy, the Company shall pay all premiums for 12 months and the Executive shall cease to participate in the Company's group term life insurance.

(f) The Executive's eligibility for any retiree medical coverage shall be determined under the relevant plan, with additional age or service credited provided in the Executive's employment agreement, if any. The Executive's rights under this Section shall be in addition to and not in lieu of any post-termination continuation coverage or conversion rights the Executive may have pursuant to applicable law, including, without limitation, continuation coverage required by Section 4980B of the Code ("COBRA Continuation Coverage"). If the Executive is not eligible for retiree medical coverage and elects to receive COBRA Continuation Coverage, the Company shall pay all of the required premiums for the Executive and/or the Executive's family for 12 months after the Termination Date. For purposes of determining eligibility for and the time of commencement of retiree benefits under any Welfare Plans of the Company, the Executive's credited service shall be the Executive's credited service at the Termination Date plus five years and the Executive's age shall be deemed to be the Executive's age at the Termination Date plus five years. If the Executive is eligible for additional credited service or deemed age under an employment agreement or other contract with the Company, the additional service and age provided by this Section 5.1(f) shall be in addition to any service and/or age credit provided under an employment agreement or contract.

(g) The Executive shall be fully vested in the Company's Executive Supplemental Retirement Plan and Benefit Restoration Plan or any successor or replacement plans (the "Supplemental Plans"). For purposes of the Supplemental Plans, the Executive's credited service shall be the Executive's credited service at the Termination Date plus five years and the Executive's age shall be deemed to be the Executive's age at the Termination Date plus five years. The amount payable under Section 5.1(b) of this Agreement shall be taken into account for purposes of determining the amount of benefits to which the Executive is entitled under the Supplemental Plans as though the amount was earned equally over the Employment Period. If the Executive is eligible for additional credited service or deemed age under an employment agreement or other contract with the Company, the additional service and age provided by this Section 5.1(g) shall be in addition to any service and/or age credit provided under an employment agre ement or contract.

            (h)  The Company shall, at its sole expense, as incurred, pay on behalf of Executive up to $25,000 in fees and costs charged by nationally recognized outplacement firm selected by the Executive to provide outplacement service for one year after the Termination Date.

            (i)  For the period stated below, the Company shall continue to pay all premiums on the Executive's whole life insurance policy (the "Policy") issued under the Executive Life Insurance Program. The payments under Section 5.1(i) are in lieu of any payments under Section 5.1(d) with respect to the Policy. The premium payments shall be made until the earlier of:

(i) the fifth anniversary of the Termination Date, or

(ii) the later to occur of the tenth anniversary of the Policy or the Executive reaching age 64.

5.2 If by the Company for Cause. If the Company terminates the Executive's employment for Cause during the Employment Period, this Agreement shall terminate without further obligation by the Company to the Executive, other than the obligation immediately to pay the Executive in cash the Executive's Annual Base Salary through the Termination Date, plus any accrued paid time off, in each case to the extent not previously paid.

5.3 If by the Executive Other Than for Constructive Termination. If the Executive terminates employment during the Employment Period other than for Constructive Termination, Disability or death, this Agreement shall terminate without further obligation by the Company, other than the obligation immediately to pay the Executive in cash the Executive's Annual Base Salary through the Termination Date, plus any accrued paid time off, in each case to the extent not previously paid.

5.4 If by the Company for Disability. If the Company terminates the Executive's employment by reason of the Executive's Disability during the Employment Period, this Agreement shall terminate without further obligation to the Executive, other than:

(a) the Company shall pay the Executive in cash all amounts specified in Sections 5.1(a)(i), (ii), (iii) and 5(b), in each case, to the extent unpaid as of the Termination Date (such amounts collectively, the "Accrued Obligations"),

(b) the Executive shall be fully vested in the Company's Supplemental Plans and shall be entitled to immediate payment of any benefits under the Supplemental Plans; and

(c) the Executive's right after the Disability Effective Date to receive disability and other benefits at least equal to the greater of (1) those provided under the most favorable disability Plans applicable to disabled peer executives of the Company in effect immediately before the Termination Date, or (2) those provided under the most favorable disability Plans of the Company in effect at any time during the 90-day period immediately before the Effective Date.

5.5 If upon Death. If the Executive's employment is terminated by reason of the Executive's death during the Employment Period, this Agreement shall terminate without further obligation to the Executive's legal representatives under this Agreement, other than the obligation immediately to pay the Executive's estate or beneficiary in cash all Accrued Obligations (as defined in Section 5.4(a)) and to provide the benefits as stated in Section 5.4(b). In addition, the Executive's family shall be entitled to receive death benefits at least equal to the most favorable death benefits provided under Plans and Welfare Plans of the Company to the surviving families of peer executives of the Company, but in no event shall such Plans and Welfare Plans provide benefits which in each case are less favorable, in the aggregate, than the most favorable of those provided by the Company to the Executive under such Plans in effect at any time during the 90-day period immediately before the Effective Date.

ARTICLE VI
CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY

6.1      Gross-up for Certain Taxes.

(a) If the Company determines that any benefit received or deemed received by the Executive from the Company pursuant to this Agreement or otherwise, whether or not in connection with a Change in Control (such monetary or other benefits collectively, the "Potential Parachute Payments") is or will become subject to any excise tax under Section 4999 of the Code or any similar tax payable under any United States federal, state, local or other law (such excise tax and all such similar taxes collectively, "Excise Taxes"), then the Company shall, within 30 business days after such determination, pay the Executive an amount (the "Gross-up Payment") equal to the product of:

(i) the amount of such Excise Taxes multiplied by
(ii) the Gross-up Multiple (as defined in Section 6.3).

The Gross-up Payment is intended to compensate the Executive for all Excise Taxes payable by the Executive with respect to the Potential Parachute Payments and any federal, state, local or other income or other taxes or Excise Taxes payable by the Executive with respect to the Gross-up Payment.

(b) The determination of the Company described in Section 6.1(a), including the detailed calculations of the amounts of the Potential Parachute Payments, Excise Taxes and Gross-Up Payment and the assumptions relating thereto, shall be set forth in a written certificate of the Company's independent auditors (the "Company Certificate") delivered to the Executive. The Executive may at any time request the preparation and delivery to the Executive of a Company Certificate. The Company shall cause the Company Certificate to be delivered to the Executive as soon as reasonably possible after such request.

6.2 Additional Gross-up Amounts. If for any reason it is later determined pursuant to a final judgment of a court of competent jurisdiction or a determination by the Company that the amount of Excise Taxes payable by the Executive is greater than the amount determined by the Company pursuant to Section 6.1, then the Company shall pay the Executive an amount (which shall also be deemed a Gross-up Payment) equal to the product of:

(a) the sum of (i) such additional Excise Taxes and (ii) any interest, fines, penalties, expenses or other costs incurred by the Executive as a result of having taken a position in accordance with a determination made pursuant to Section 6.1 multiplied by

(b) the Gross-up Multiple.

6.3 Gross-up Multiple. The Gross-up Multiple shall equal a fraction, the numerator of which is one (1.0), and the denominator of which is one (1.0) minus the sum, expressed as a decimal fraction, of the effective after-tax marginal rates of all federal, state, local and other income and other taxes and any Excise Taxes applicable to the Gross-up Payment. If different rates of tax are applicable to various portions of a Gross-up Payment, the weighted average of such rates shall be used.

6.4 Amount Increased or Contested.

(a) The Executive shall notify the Company in writing (an "Executive's Notice") of any claim by the IRS or other taxing authority (an "IRS Claim") that, if successful, would require the payment by the Executive of Excise Taxes in respect of Potential Parachute Payments in an amount in excess of the amount of such Excise Taxes determined in accordance with Section 6.1. Such Executive's Notice shall include a copy of all notices and other documents or correspondence received by the Executive in respect of such IRS Claim. The Executive shall give the Executive's Notice as soon as practicable. If before the deadline for a response to the IRS ("IRS Claim Deadline"), the Company shall:

(i) deliver to the Executive a Company Certificate to the effect that the IRS Claim has been reviewed by the Company and, notwithstanding the IRS Claim, the amount of Excise Taxes, interest and penalties payable by the Executive is either zero or an amount less than the amount specified in the IRS Claim,

(ii) pay to the Executive an amount (which shall also be deemed a Gross-Up Payment) equal to the positive difference between (A) the product of the amount of Excise Taxes, interest and penalties specified in the Company Certificate, if any, multiplied by the Gross-Up Multiple, and (B) the portion of such product, if any, previously paid to Executive by the Company, and

            (iii) direct the Executive pursuant to Section 6.4(d) to contest the balance of the IRS Claim,

then the Executive shall pay only the amount, if any, of Excise Taxes, interest and penalties specified in the Company Certificate. In no event shall the Executive pay an IRS Claim earlier than 30 days after having given an Executive's Notice to the Company (or, if sooner, the IRS Claim Deadline).

(b) At any time after the payment by the Executive of any amount of Excise Taxes or related interest or penalties in respect of Potential Parachute Payments, the Company may in its discretion require the Executive to pursue a claim for a refund (a "Refund Claim") of all or any portion of such Excise Taxes, interest or penalties as the Company may specify by written notice to the Executive.

(c) If the Company notifies the Executive in writing that the Company desires the Executive to contest an IRS Claim or to pursue a Refund Claim, the Executive shall:

(i) give the Company all information that it reasonably requests in writing from time to time relating to such IRS Claim or Refund Claim, as applicable,

(ii) take such action in connection with such IRS Claim or Refund Claim (as applicable) as the Company reasonably requests in writing from time to time, including accepting legal representation with respect thereto by an attorney selected by the Company, subject to the approval of the Executive (which approval shall not be unreasonably withheld or delayed),

(iii) cooperate with the Company in good faith to contest such IRS Claim or pursue such Refund Claim, as applicable,

(iv) permit the Company to participate in any proceedings relating to such IRS Claim or Refund Claim, as applicable, and

(v) contest such IRS Claim or prosecute such Refund Claim (as applicable) to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company may from time to time determine in its discretion.

The Company shall control all proceedings in connection with such IRS Claim or Refund Claim (as applicable) and in its discretion may cause the Executive to pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the IRS or other taxing authority in respect of such IRS Claim or Refund Claim (as applicable); provided that (i) any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive relating to the IRS Claim is limited solely to such IRS Claim, (ii) the Company's control of the IRS Claim or Refund Claim (as applicable) shall be limited to issues with respect to which a Gross-Up Payment would be payable, and (iii) the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the IRS or other taxing authority.

(d) The Company may at any time in its discretion direct the Executive to (i) contest the IRS Claim in any lawful manner or (ii) pay the amount specified in an IRS Claim and pursue a Refund Claim; provided, however, that if the Company directs the Executive to pay an IRS Claim and pursue a Refund Claim, the Company shall advance the amount of such payment to the Executive on an interest-free basis and shall indemnify the Executive, on an after-tax basis, for any income or other applicable taxes or Excise Tax, and any related interest or penalties imposed with respect to such advance.

(e) The Company shall pay directly all legal, accounting and other costs and expenses (including additional interest and penalties) incurred by the Company or the Executive in connection with any IRS Claim or Refund Claim, as applicable, and shall indemnify the Executive, on an after-tax basis, for any income or other applicable taxes, Excise Tax and related interest and penalties imposed on the Executive as a result of such payment of costs and expenses.

6.5 Refunds. If, after the receipt by the Executive of any payment or advance of Excise Taxes advanced by the Company pursuant to Section 6.4, the Executive receives any refund with respect to such claim, the Executive shall (subject to the Company's complying with the requirements of Section 6.4) promptly pay the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to Section 6.4, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such determination within 30 days after the Company receives written notice of such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-up Payment required to be paid. Any contest of a denial of refund shall be controlled by Section 6.4.

ARTICLE VII
EXPENSES AND INTEREST

7.1 Legal Fees and Other Expenses. The Company will pay all reasonable fees and expenses, if any, (including, without limitation, legal fees and expenses) that are incurred by the Executive to enforce this Agreement and that result from a breach of this Agreement by the Company.

7.2 Interest. If the Company does not pay any amount due to the Executive under this Agreement within three days after such amount became due and owing, interest shall accrue on such amount from the date it became due and owing until the date of payment at a annual rate equal to 200 basis points above the base commercial lending rate published in The Wall Street Journal in effect from time to time during the period of such nonpayment.

ARTICLE VIII
NO ADVERSE EFFECT ON POOLING OF INTERESTS

Any benefits provided to the Executive under this Agreement may be reduced or eliminated to the extent necessary, in the reasonable judgment of the Board, to enable the Company to account for a merger, consolidation or similar transaction as a pooling of interests; provided that (i) the Board shall have exercised such judgment and given the Executive written notice thereof prior to the Effective Date and (ii) the determination of the Board shall be supported by a written certificate of the Company's independent auditors, a copy of which shall be provided to the Executive before the Effective Date.

ARTICLE IX
NO SET-OFF OR MITIGATION

9.1 No Set-off by Company. The Executive's right to receive when due the payments and other benefits provided for under this Agreement is absolute, unconditional and subject to no set-off, counterclaim or legal or equitable defense. Any claim which the Company may have against the Executive, whether for a breach of this Agreement or otherwise, shall be brought in a separate action or proceeding and not as part of any action or proceeding brought by the Executive to enforce any rights against the Company under this Agreement.

9.2 No Mitigation. The Executive shall not have any duty to mitigate the amounts payable by the Company under this Agreement by seeking new employment following termination. Except as specifically otherwise provided in this Agreement, all amounts payable pursuant to this Agreement shall be paid without reduction regardless of any amounts of salary, compensation or other amounts which may be paid or payable to the Executive as the result of the Executive's employment by another employer.

ARTICLE X
NON-EXCLUSIVITY OF RIGHTS

10.1 Waiver of Other Severance Rights. To the extent that payments are made to the Executive pursuant to Section 5.1 of this Agreement, the Executive hereby waives the right to receive benefits under any plan or agreement (including an offer of employment or employment contract) of the Company or its subsidiaries which provides for severance benefits (except as provided in Section 5.1(b).

10.2 Other Rights. Except as provided in Section 10.1, this Agreement shall not prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plans provided by the Company or any of its subsidiaries and for which the Executive may qualify, nor shall this Agreement limit or otherwise affect such rights as the Executive may have under any other agreements with the Company or any of its subsidiaries. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan of the Company or any of its subsidiaries and any other payment or benefit required by law at or after the Termination Date shall be payable in accordance with such Plan or applicable law except as expressly modified by this Agreement.

ARTICLE XI
MISCELLANEOUS

11.1 No Assignment. The Executive's rights under this Agreement may not be assigned or transferred in whole or in part, except that the personal representative of the Executive's estate will receive any amounts payable under this Agreement after the death of the Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.

11.2 Successors. The rights and obligations of the Company under this Agreement will inure to the benefit of and will be binding upon the successors and assigns of the Company. Before or upon a Change in Control, the Company shall obtain the agreement of the surviving or acquiring corporation that it will succeed to the Company's rights and obligations under this Agreement.

11.3 Rights Under the Agreement. The right to receive benefits under the Agreement will not give the Executive any proprietary in1erest in the Company or any of its assets. Benefits under the Agreement will be payable from the general assets of the Company, and there will be no required funding of amounts that may become payable under the Agreement. The Executive will for all purposes be a general creditor of the Company. The interest of the Executive under the Agreement cannot be assigned, anticipated, sold, encumbered or pledged and will not be subject to the claims of the Executive's creditors.

11.4 Notice. For purposes of this Agreement, notices and all other communications must be in writing and are effective when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the Executive or his or her personal representative at his or her last known address. All notices to the Company must be directed to the attention of the Corporate Secretary with a copy to the General Counsel. Such other addresses may be used as either party may have furnished to the other in writing. Notices of change of address are effective only upon receipt.

11.5 Miscellaneous. The Executive and the Company agree that, effective as of the execution of this Agreement, any prior Employment Continuity Agreement between the Executive and the Company is null and void. This instrument contains the entire agreement of the parties. To the extent not governed by federal law, this Agreement will be construed in accordance with the laws of the Commonwealth of Virginia, without reference to its conflict of laws rules. No provisions of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and the writing is signed by the Executive and the Company. A waiver of any breach of or compliance with any provision or condition of this Agreement is not a waiver of similar or dissimilar provisions or conditions. The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and e ffect. This Agreement may be executed in one or more counterparts, all of which will be considered one and the same agreement.

11.6 Tax Withholding. The Company may withhold from any amounts payable under this Agreement any federal, state or local taxes that are required to be withheld pursuant to any applicable law or regulation.

IN WITNESS WHEREOF, the Executive and the Company have executed this Agreement as of the date first above written.

__________________________
Executive

DOMINION RESOURCES, INC.

By:________________________

EX-10.2

Exhibit 10.2 

DOMINION RESOURCES, INC.

EXECUTIVES' DEFERRED COMPENSATION PLAN

AMENDED AND RESTATED

Effective
JULY 15, 2003

For the Executives of:

Dominion Resources, Inc.
And Affiliates

TABLE OF CONTENTS

Section                                                          Page

1.	DEFINITIONS	1
2.	PURPOSE	4
3.	PARTICIPATION	4
4.	DEFERRAL ELECTION	5
5.	EFFECT OF NO ELECTION	6
6.	ROLLOVER ELECTION	6
7.	FORMER CNG PLANS	7
8.	DEFERRED STOCK OPTION BENEFIT	7
9.	MATCH CONTRIBUTIONS	8
10.	INVESTMENT FUNDS	9
11.	DISTRIBUTIONS	9
12.	HARDSHIP DISTRIBUTIONS	11
13.	COMPANY'S OBLIGATION	12
14.	CONTROL BY PARTICIPANT	12
15.	CLAIMS AGAINST PARTICIPANT'S BENEFIT	13
16.	AMENDMENT OR TERMINATION	13
17.	ADMINISTRATION	13
18.	NOTICES	14
19.	WAIVER	14
20.	CONSTRUCITON	14

DOMINION RESOURCES, INC.

EXECUTIVES' DEFERRED COMPENSATION PLAN

1. DEFINITIONS.

The following definitions apply to this Plan and to any related documents.

(a) Accounts means, collectively, a Participant's Deferral Account, Match Account, and Deferred Stock Option Account, if any.

(b) Administrator means Dominion Resources Services, Inc.

(c) Beneficiary or Beneficiaries means a person or persons or other entity that a Participant designates on a Beneficiary Designation Form to receive Benefit payments pursuant to Plan Section 11(h). If a Participant does not execute a valid Beneficiary Designation Form, or if the designated Beneficiary or Beneficiaries fail to survive the Participant or otherwise fail to take the Benefit, the Participant's Beneficiary or Beneficiaries shall be the first of the following persons who survive the Participant: a Participant's spouse (the person legally married to the Participant when the Participant dies); the Participant's children in equal shares. If none of these persons survive the Participant, the Beneficiary shall be the Participant's estate.

(d) Beneficiary Designation Form means the form that a Participant uses to name the Participant's Beneficiary or Beneficiaries.

(e) Benefit means collectively, a Participant's Deferred Benefit, Match Benefit, and Deferred Stock Option Benefit, if any.

(f) Board means the Board of Directors of DRI.

(g) Change of Control means the occurrence of any of the following events:

(i) any person, including a ''group'' as defined in Section 13(d)(3) of Securities Exchange Act of 1934, as amended, becomes the owner or beneficial owner of DRI securities having 20% or more of the combined voting power of the then outstanding DRI securities that may be cast for the election of DRI's directors (other than as a result of an issuance of securities initiated by DRI, or open market purchases approved by the Board, as long as the majority of the Board approving the purchases is also the majority at the time the purchases are made);

(ii) as the direct or indirect result of, or in connection with, a cash tender or exchange offer, a merger or other business combination, a sale of assets, a contested election, or any combination of these transactions, the persons who were directors of DRI before such transactions cease to constitute a majority of the Board, or any successor's board, within two years of the last of such transactions; or

(iii) with respect to a particular Participant, an event occurs with respect to the Participant's employer such that, after the event, the Participant's employer is no longer a Dominion Company.

      (h)       Code means the Internal Revenue Code of 1986, as amended.

      (i)        Committee means the Organization, Compensation and Nominating Committee of the Board.

      (j)        Company means DRI and any Dominion Company that is designated by the Administrator as covered by this Plan, and any successor business by merger, purchase, or otherwise that maintains the Plan.

      (k)       Compensation means a Participant's base salary, cash incentive pay and other cash compensation from the Company, including annual bonuses, pre-scheduled one-time performance-based payments, and gains from stock option grants. Compensation does not include stock, stock options or spot awards. The Administrator may determine whether to include or exclude an item of income from Compensation.

       (l)        Deferral means the amount of Compensation that a Participant has elected to defer under a Deferral Election Form.

       (m)      Deferral Account means a bookkeeping record established for each Participant who is eligible to receive a Deferred Benefit. A Deferral Account shall be established only for purposes of measuring a Deferred Benefit and not to segregate assets or to identify assets that may be used to satisfy a Deferred Benefit. A Deferral Account shall be credited with that amount of a Participant's Compensation deferred according to a Participant's Deferral Election Form. A Deferral Account shall also be credited with the amount of benefits rolled over to the Plan pursuant to a Rollover Election Form. A Deferral Account also shall be credited periodically with deemed investment gain or loss under Plan Section 10.

       (n)       Deferral Election Form means the form that a Participant uses to elect to defer Compensation pursuant to Plan Section 4.

       (o)       Deferred Benefit means the benefit available to a Participant who has executed a valid Deferral Election Form or Rollover Election Form.

       (p)       Deferred Stock Option Account means a bookkeeping record established for each Participant who has made an election to defer the DRI Stock to be received under an exercise of a nonstatutory stock optiongranted under the Dominion Resources, Inc. Incentive Compensation Plan and the Dominion Resources, Inc. Leadership Stock Option Plan. The account shall be charged or credited with net earnings, gains, losses and expenses, as well as any appreciation or depreciation in market value during each Plan Year for the deemed investment in the DRI Stock. The Administrator may charge or credit such earnings, gains, losses, appreciation and depreciation based on the actual investment performance of        the DRI Stock that it has deposited into the trust.

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       (q)      Deferred Stock Option Benefit means the portion of a Participant's Benefit from the Participant's Deferred Stock Option Account.

       (r)       Disability or Disabled means, with respect to a Participant, that the Participant is entitled to benefits under the long-term disability plan of the Company.

       (s)      Distribution Election Form means a form that a Participant uses to establish the duration of the deferral of Compensation and the frequency of payments of a Benefit. If a Participant does not execute a valid Distribution Election Form, the distribution of a Benefit shall be governed by Plan Section 5.

       (t)       Dominion Company means Consolidated Natural Gas, Inc., Virginia Power, Dominion Capital, Inc., Dominion Energy, Inc., Dominion Resources Services, Inc., or another corporation in which DRI owns stock possessing at least 50 % of the combined voting power of all classes of stock or which is in a chain of corporations with DRI in which stock possessing at least 50% of the combined voting power of all classes of stock is owned by one or more other corporations in the chain.

      (u)       DRI means Dominion Resources, Inc.

      (v)       DRI Stock means the common stock, no par value, of DRI.

      (w)      DRI Stock Fund means an Investment Fund in which the deemed investment is DRI Stock.

      (x)       DSOP means the Dominion Resources, Inc. Security Option Plan.

      (y)       Election Date means the date by which an Executive must submit a valid Deferral Election Form for regular Compensation. For each Plan Year, the Election Date shall be January 1 unless the Administrator sets an earlier Election Date or as provided in Plan Section 4(b) or 4(c).

      (z)       Executive means an individual who is employed by the Company and who has a base salary of at least $100,000.

      (aa)     Investment Fund means one or more deemed investment alternatives offered to Participants from time to time. The Company may compute deemed investment gain or loss under the Investment Funds based on the actual investment performance of assets that it has deposited in a grantor trust (as described in Plan Section 13). The DRI Stock Fund shall be one of the Investment Funds.

      (bb)     Match Account means an Account that holds the matching contributions made by the Company under Plan Section 9.

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      (cc)      Match Benefit means the portion of a Participant's Benefit from the Participant's Match Account.

      (dd)      Participant means an individual presently or formerly employed by the Company who meets one or more of the requirements of Plan Section 3(a).

      (ee)      Plan means the Dominion Resources, Inc. Executives' Deferred Compensation Plan.

      (ff)       Plan Year means a calendar year.

      (gg)     Rollover Election Form means the form that a Participant uses to rollover benefits payable in the form of a lump sum payment from a Supplemental Retirement Plan to this Plan.

      (hh)     Supplemental Retirement Plan means the Dominion Resources, Inc. Retirement Benefit Restoration Plan and/or the Dominion Resources, Inc. Executive Supplemental Retirement Plan.

      (ii)       Terminate or Termination, with respect to a Participant, means the cessation of the Participant's employment with the Company on account of death, Disability, severance or any other reason.

2. PURPOSE.

The Plan is intended to benefit a "select group of management or highly compensated employees," as that term is used under Title I of the Employee Retirement Income Security Act of 1974, as amended. The Plan is intended to permit Executives to defer their Compensation, and for related purposes.

3. PARTICIPATION.

(a) An individual presently or formerly employed by the Company is a Participant if he or she is:

i     With respect to any Plan Year, an Executive who executes a valid Deferral Election Form for that Plan Year as provided in Plan Section 3(b);

ii     An individual who has a Deferred Stock Option Account due to an election to defer DRI Stock;

iii    An individual who is eligible for a Match under Plan Section 9;

iv    An individual who had a benefit entitlement under Section 4.1(b) of the CNG ERISA Excess Plan as of December 31, 2000; or

v     An individual who had a benefit entitlement under Section 5 of the Consolidated Natural Gas Company Executive Incentive Deferral Plan as of December 31, 2000.

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vi   An individual who has executed a Rollover Election Form pursuant to Plan Section 6.

     (b)  An Executive may become a Participant for any Plan Year by filing a valid Deferral Election Form according to Plan Section 4 on or before the Election Date for that Plan Year, or by filing an election to defer DRI Stock pursuant to the Dominion Resources, Inc. Incentive Compensation Plan, the Dominion Resources, Inc. Leadership Stock Option Plan or any other plan designated by the Administrator.

     (c)  An individual remains a Participant as long as the Participant is entitled to a Benefit under the Plan. An individual who is a Participant under Plan Section 3(a)(iv), (v), or (vi) and who is not an Executive may direct deemed investments pursuant to Plan Section 10 but may not make a Deferral election under Plan Section 4.

4. DEFERRAL ELECTION.

An Executive may elect on or before the Election Date to defer receipt of a portion of the Executive's Compensation for the Plan Year. Except as provided in Plan Section 4(a), an Executive may elect a deferral for any Plan Year only if he or she is an Executive on the Election Date for that Plan Year. The following provisions apply to deferral elections:

(a) A Participant may defer up to 50% of the Participant's base salary and up to 85% of the Participant's annual cash incentive award, long-term cash incentive payments and pre-scheduled one-time cash payments. The maximum Deferrals to this Plan shall be reduced by any deferrals that the Participant has elected to defer to the DSOP or any other deferred compensation plan of the Company. Compensation for deferrals under the Dominion Resources, Inc. Employee Savings Plan shall be based on a Participant's Compensation after any Deferrals made under this Plan, the DSOP, or any other deferred compensation plan of the Company.

(b) A Participant may defer up to 85% of the Participant's gains on stock acquired by exercise of an option under the Dominion Resources, Inc. Incentive Compensation Plan or the Dominion Resources, Inc. Leadership Stock Option Plan. For purposes of deferral of stock option gains, the Election Date shall be the date that is six months before the Participant exercises the option. Procedures for deferring stock option gains shall be established under the Dominion Resources, Inc. Incentive Compensation Plan and the Dominion Resources, Inc. Leadership Stock Option Plan.

(c) Before each Plan Year's Election Date, each Executive shall be provided with a Deferral Election Form. Except as provided below, a deferral election shall be valid only when the Deferral Election Form is completed, signed by the electing Executive, and received by the Administrator on or before the Election Date for that Plan Year. In the year in which an Executive is first promoted to a salary grade between A through G, the Executive may make a deferral election by completing a Deferral Election Form within 30 days of the promotion. The deferral election will be effective for periods after the Administrator receives it.

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(d) An Executive must complete an Investment Election Form for all amounts in the Executive's Deferral Account. The Compensation deferred under a Deferral Election Form shall be allocated among available Investment Funds in percentages as specified on the investment election form.

(e) An Executive must complete a Distribution Election Form for the distribution of the Executive's Deferral Account.

(f) The Administrator may reject any Deferral Election Form or any Distribution Election Form or both that does not conform to the provisions of the Plan. The Administrator may modify any Distribution Election Form at any time to the extent necessary to comply with any federal securities laws or regulations. The Administrator's rejection or modification must be made on a uniform basis with respect to similarly situated Executives. If the Administrator rejects a Deferral Election Form, the Executive shall be paid the amounts the Executive would have been entitled to receive if the Executive had not submitted the rejected Deferral Election Form.

(g) An Executive may not revoke a Deferral Election Form after the Plan Year begins, except that an Executive may revoke a Deferral Election Form within 30 days following a Change of Control. Any revocation before the beginning of the Plan Year or within 30 days following a Change of Control has the same effect as a failure to submit a Deferral Election Form. Any writing signed by an Executive expressing an intention to revoke the Executive's Deferral Election Form and delivered to the Administrator before the close of business on the relevant Election Date shall be a revocation.

(h) Subject to the distribution restrictions of Plan Section 11, an Executive may revoke an existing Distribution Election Form at any time by submitting a new Distribution Election Form.

            5. EFFECT OF NO ELECTION.

Except as provided in Plan Section 4(c), an Executive who has not submitted a valid Deferral Election Form to the Administrator on or before the relevant Election Date may not defer any part of the Executive's Compensation for the Plan Year to this Plan. The Deferred Benefit of an Executive who submits a valid Deferral Election Form but fails to submit a valid Distribution Election Form (either as to the form or commencement of payment) before the relevant Election Date shall be distributed in a lump sum on or before the February 28 following the calendar year of the Executive's Termination.

6. ROLLOVER ELECTION. A Participant in a Supplemental Retirement Plan who elects to receive a single lump sum payment of benefits under the Supplemental Retirement Plan may also elect to rollover the calculated rollover amount to this Plan by executing a Rollover Election Form. The provisions of Section 4(d), (e), (f), and (h) apply to Benefits subject to a Rollover Election Form.

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            7. FORMER CNG PLANS.

                       (a) The Plan has assumed a portion of the obligations and liabilities of the Unfunded Supplemental Benefit Plan for Employees of Consolidated Natural Gas Company and its             Participating Subsidiaries Who are Not Represented by a Recognized Union ("CNG ERISA Excess Plan") with respect to Participants in the Plan. The portion assumed by the Plan is the             liabilities related to "Matching Contributions" under the "Thrift Plan" (as those terms are defined in the CNG ERISA Excess Plan) and related gains and losses as of December 31, 2000. A             Participant's Benefit as of January 1, 2001 shall include the Participant's account under the CNG ERISA Exces s Plan as of December 31, 2000. The payment of a Participant's Benefit             from this Plan shall be in complete satisfaction of the Participant's benefits under Section 4.1.(b) of the CNG ERISA Excess Plan. A Participant's Investment Election Form, Distribution             Election Form and Beneficiary Election Form shall apply to the portion of the Participant's Benefit from the CNG ERISA Excess Plan.

                      (b) The Plan has assumed all of the obligations and liabilities of the Consolidated Natural Gas Company Executive Incentive Deferral Plan ("CNG Deferral Plan") with respect to             Participants in the Plan. The liabilities assumed by the Plan are the liabilities of the CNG Deferral Plan as of December 31, 2000 equal to the sum of all Participants' balances as of            December 31, 2000 in the CNG Deferral Plan. The Participant's balance in the CNG Deferral Plan shall be part of the Participant's Benefit as of January 1, 2001. A Participant's Benefit as            of January 1, 2001 shall include the Participant's account under the CNG Deferral Plan as of December 31, 2000. The payment of a Pa rticipant's Benefit from this Plan shall be in complete            satisfaction of the Participant's benefits under Section 5 of the CNG Deferral Plan. A Participant's Investment Election Form, Distribution Election Form and Beneficiary Election Form            shall apply to the portion of the Participant's Benefit from the CNG Deferral Plan.

            8. DEFERRED STOCK OPTION BENEFIT.

A Participant's Deferred Stock Option Benefit shall remain deemed invested in DRI Stock until distribution. Such Participant's Distribution Election Form and Beneficiary Election Form shall apply to the Participant's Deferred Stock Option Benefit. If the Company has delivered shares of DRI Stock to a trust to satisfy the Deferred Stock Option Benefit, payment of the Deferred Stock Option Benefit shall be tracked as stock and made in shares of DRI Stock from the trust. If the Company has not delivered shares of DRI Stock to a trust, the Company shall make payment of the Deferred Stock Option Benefit in DRI Stock through the Dominion Resources, Inc. Incentive Compensation Plan and the Dominion Resources, Inc. Leadership Stock Option Plan.

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 9. MATCH CONTRIBUTIONS.

(a) With respect to each Plan Year, the Company shall credit a Match (as defined below) to the Match Account of each eligible Participant, unless the Company has elected to contribute the Match to the DSOP, or another deferred compensation plan of the Company. To be eligible for a Match, a Participant must meet all of the following criteria:

i     be employed on December 31 or have Terminated during the Plan Year due to retirement or early retirement (as defined by the Dominion Savings Plan), death or Disability;

ii    have made salary deferrals to the Dominion Savings Plan for the Plan Year; and

iii    have base salary for the Plan Year in excess of the dollar limit for the Plan Year under Code section 401(a)(17).

(b) The amount of the Match will be determined under the following formula: Excess Compensation times Deferral Percentage times Match Percentage. The terms in the formula have the following meanings.

i     Excess Compensation is the amount of the Participant's base salary for the Plan Year in excess of the dollar limit for the Plan Year under Code section 401(a)(17).

ii    Deferral Percentage is the total of the Participant's salary deferrals to the Dominion Savings Plan for the Plan Year divided by the lesser of (i) the dollar limit for the Plan Year under Code section 401(a)(17), or (ii) the Participant's base salary for the Plan Year reduced by deferrals under this Plan and the Dominion Savings Plan. The Deferral Percentage may not exceed the maximum percentage of compensation on which the Participant would be eligible to receive a match by making a deferral under the Dominion Savings Plan for the Plan Year.

iii   Match Percentage is the percentage of company match made with respect to the Participant's salary deferral to the Dominion Savings Plan.

     (c)  A Participant's Match Account shall be 100% vested.

     (d)  A Participant will not be required to invest any portion of the Match Account in the DRI Stock Fund. The Administrator may establish further procedures for the administration of the Match Account.

                       10. INVESTMENT FUNDS

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(a) Each Participant shall have the right to direct the deemed investment of the Participant's Deferral Account and the Match Account among the Investment Funds. The Administrator shall determine the number and type of Investment Funds that will be available for investment in any Plan Year. At its sole discretion, the Administrator may change the number and type of Investment Funds at any time and may establish procedures for the transition between Investment Funds.

(b) Deferrals shall be credited to an Investment Fund as of the date on which the deferred Compensation would have been paid to the Participant. A separate bookkeeping account shall be established for each Participant who has directed a deemed investment in an Investment Fund. Deemed transfers between Investment Funds in the Participant's Deferral Account and Match Account shall be charged and credited as the case may be to each Investment Fund account. The Investment Fund account shall be charged or credited with net earnings, gains, losses and expenses, as well as any appreciation or depreciation in market value during each Plan Year for the deemed investment in the Investment Fund. The Administrator may charge or credit such earnings, gains, losses, appreciation and depreciation based on the actual investment performance of assets that it has deposited in a grantor trust (as described in Plan Section 13).

(c) Pursuant to procedures established by the Administrator uniformly applied, Participants may direct the transfer of deemed investments among Investment Funds at least once in each Plan Year. The transfer of deemed investments involving the DRI Stock Fund may be subject to such restrictions, including prior approval, as determined appropriate by DRI.

                  11. DISTRIBUTIONS.

(a)  "All Benefits, less withholding for applicable income and employment taxes, shall be paid in cash by the Company or its designee, except that  payment from a Participant's Deferred Stock Option Account shall be made in the form of DRI Stock and the Committee may provide that a designated payment from the DRI Stock Fund shall be made in the form of DRI Stock under payment procedures similar to Section 8." A Participant may elect to receive a distribution of all or a portion of the Participant's Benefits subject to the provisions of this Section. Payment of each distribution of Benefits shall be made in one lump sum or in installments as provided in this Section. Except in the event of Termination for reasons other than death, retirement or Disability, or as provided in Plan Section 11(f), a Participant may receive a distribution from the Participant's Deferral Account only on a date that is at least six months after the date on which the Participant's most recent Deferral Election Form is effective.

(i) Unless otherwise provided herein or specified in a Participant's Distribution Election Form, any lump sum payment shall be paid, or installment payments shall begin, on or before February 28 of the calendar year after the Participant's Termination. The Participant may elect on the Participant's Distribution Election Form to begin payments (A) on or before the February 28 of the calendar year following the calendar year of the Participant's Termination; (B) on or before the February 28 of the calendar year following the calendar year of the Participant's Termination but no sooner than February 28 of a specified calendar year; or (C) even if the Participant does not Terminate, on or before the February 28 of a specified calendar year.

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(ii) Installment payments will be made in such amount and at such times as specified in the Participant's Distribution Election Form, provided however, no such payments shall exceed a period of ten (10) years. Benefits will not be paid more often than once a year, except as provided in Plan Section 11(a)(iii). For a Benefit payable in a form other than a lump sum, the unpaid balance of a Participant's Deferral Account and Match Account, if any, shall continue to be maintained in Investment Funds. The unpaid balance of a Participant's Deferred Stock Option Account shall remain invested in DRI Stock. All Benefits must be paid no later than February 28 of the 10^th calendar year after the year in which the Participant's retirement or Disability occurs.

(iii) If a Participant has commenced distribution of benefits in a form other than a lump sum, the Participant may make a one-time election to receive any unpaid Benefits in the form of a single lump sum payment or to modify the remaining payment schedule to any form permitted under Plan Section 11(a)(ii). The election may be made at any time prior to the full payment of the Participant's Benefits. The election is subject to the Committee's approval, in its absolute discretion, and the election will be effective no less than 30 days after notice is provided to the Administrator. The Committee, in its discretion, may delegate its authority to approve the one-time election to the Administrative Benefits Committee.

(b) Benefits paid on account of Termination for retirement shall be paid in a lump sum unless the Participant's Distribution Election Form specifies annual installment payments over a period of up to ten (10) years.

(c) Benefits paid on account of a Participant's death shall be paid in a lump sum in accordance with the provisions of Plan Section 11(h).

(d) Benefits paid on account of Termination due to Disability shall begin to be paid as soon as administratively practicable following the Participant's Termination. The Benefits shall be paid in the method designated on the Participant's Distribution Election Form, or in annual installment payments over a period of ten (10) years if the Participant made no election on the Participant's Distribution Election Form. If a Disabled Participant begins to receive Benefits and thereafter recovers and returns to employment before the balance of the Participant's Accounts is fully paid, distributions shall cease and any remaining Benefits under the Plan shall be governed by this Plan Section 11 and the Participant's Distribution Election Form.

-10-

(e) Benefits paid on account of Termination due to other than death, Disability or retirement shall be paid in a lump sum as soon as practicable following the Termination.

(f) A Participant may elect to receive payment of Benefits prior to Termination. If payment is made pursuant to a Distribution Election Form that was effective less than six months before the date of such payment, the Participant's Deferred Benefit shall be reduced by 10%. Such payment shall be paid in a lump sum.

      (g)  Notwithstanding any other provision of this Plan or a Participant's Distribution Election Form, the Committee in its sole discretion may postpone the distribution of all or part of        a Benefit to the extent that the payment would not be deductible under Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code) or any successor thereto. A        Benefit distribution that is postponed pursuant to the preceding sentence shall be paid as soon as it is possible to do so within the deduction limitations of Section 162(m) of the        Code.

(h)  A Participant or Beneficiary may not assign Benefits. A Participant may use only one Beneficiary Designation Form to designate one or more Beneficiaries for all of the Participant's Benefits under the Plan. Such designations are revocable. Each Beneficiary shall receive the Beneficiary's portion of the Participant's Accounts on or before February 28 of the year following the Participant's death. However, the Administrator, in its discretion, may approve a Beneficiary's request for accelerated payment under Plan Section 12. The Administrator may require that multiple Beneficiaries agree upon a single distribution method.

                 12. HARDSHIP DISTRIBUTIONS.

(a) At its sole discretion and at the request of a Participant before or after the Participant's Termination, or at the request of any of the Participant's Beneficiaries after the Participant's death, the Administrator may accelerate and pay all or part of any amount attributable to a Participant's Benefits. The Administrator may accelerate distributions only in the event of Hardship as defined in Plan Section 12(b). An accelerated distribution under this Section shall be limited to the amount necessary to satisfy the Hardship.

(b) Hardship is a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent of the Participant, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that will constitute a Hardship will depend upon the facts of each case, but, in any case, payment will not be made to the extent that the Hardship is or may be relieved: (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant's assets, to the extent that the liquidation of such assets would not itself cause severe financial hardship, or (iii) by cessation of deferrals under the Plan.

-11-

(c) Distributions under this Plan Section 12 shall be made in one lump sum payment in cash except that in the case of a Participant's Deferred Stock Option Benefit, distributions shall be made in DRI Stock. Distributions shall be made proportionately from all of the Investment Funds in the Participant's Accounts first, and, with respect to Deferred Benefits, shall be limited to amounts attributable to Compensation deferred under a Deferral Election Form that was effective at least six months before the distribution. The Investment Funds in the Participant's Accounts shall be valued as of the last business day prior to the distribution, or as of such other date as may be determined in the discretion of the Administrator.

(d) A distribution under this Plan Section 12 shall be in lieu of that portion of a Participant's Benefit that would have been paid otherwise. A Benefit shall be adjusted by reducing the balance of the Participant's Accounts by the amount of the distribution.

            13. COMPANY'S OBLIGATION.

            (a) The Plan shall be unfunded. DRI shall not be required to segregate any assets that at any time may represent a Benefit. DRI shall establish a grantor trust (within the             meaning of Sections 671 through 679 of the Code) for Participants and Beneficiaries and shall deposit Participants' Match Benefits with the trustee of such trust. DRI may deposit             funds with the trustee of such trust to provide the Deferred Benefits or Deferred Stock Option Benefits to which Participants and Beneficiaries may be entitled under the Plan. The             funds deposited with the trustee or trustees of such trust, and the earnings thereon, will be dedicated to the payment of Benefits under the Plan but shall remain subject to the &nbs p;           claims of the general creditors of the Company. Any liability of DRI to a Participant or Beneficiary under this Plan shall be based solely on any contractual obligations that may be             created pursuant to this Plan. No such obligation of DRI shall be deemed to be secured by any pledge of, or other encumbrance on, any property of DRI.

           (b) Notwithstanding the foregoing, in the event of a Change of Control, DRI shall, immediately prior to a Change of Control, make an irrevocable contribution to the trust so            that the amount held in trust is equal to 105% of the amount that is sufficient to pay each Participant or Beneficiary the Benefit to which they would be entitled, and for which DRI            and each other Dominion Company is liable, pursuant to the terms of the Plan as in effect on the date on which the Change of Control occurred. The amount of such contribution            exceeding the amount required to pay Benefits under the Plan shall be used to pay administrative costs of the trust and reimburse any Participant who incurs legal fees as a result of       &nb sp;    an attempt to enforce the terms of the Plan against an acquirer of DRI. Additionally, the trustee of the trust as of the date of the Change of Control may not be removed as trustee            of the trust before the fifth anniversary of the date of the Change of Control.

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           14. CONTROL BY PARTICIPANT.

A Participant shall have no control over the Participant's Benefit except according to the Participant's Deferral Election Forms, Rollover Election Forms, Distribution Election Forms, Investment Election Form and Beneficiary Designation Form.

           15. CLAIMS AGAINST PARTICIPANT'S BENEFIT.

An Account shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to do so shall be void. A Benefit shall not be subject to attachment or legal process for a Participant's debts or other obligations. Nothing contained in this Plan shall give any Participant any interest, lien, or claim against any specific asset of the Company. A Participant or the Participant's Beneficiary shall have no rights other than as a general creditor of DRI.

           16. AMENDMENT OR TERMINATION.

Except as otherwise provided, this Plan may be altered, amended, suspended, or terminated at any time by the Committee. The Committee may not alter, amend, suspend, or terminate this Plan without the consent of that Participant if such action would result in (i) a distribution of the Participant's Benefit in any manner not provided in the Plan or (ii) immediate taxation of a Benefit to a Participant.

           17. ADMINISTRATION.

(a) This Plan shall be administered by the Administrator. The Administrator shall interpret the Plan, establish regulations to further the purposes of the Plan and take any other action necessary to the proper operation of the Plan. To the extent authorized by the Administrator, any action required to be taken by a Participant may be taken in writing, by electronic transmission, by telephone, or by facsimile, except for a beneficiary designation which must be in writing. Prior to paying a Benefit under the Plan, the Administrator may require the Participant, former Participant or Beneficiary to provide such information or material as the Administrator, in its sole discretion, shall deem necessary to make any determination it may be required to make under the Plan. The Administrator may withhold payment of a Benefit under the Plan until it receives all such information and material and is reasonably satisfied of its correctness and genuineness. The Administrator may delegate all or any of its responsibi lities and powers to any persons selected by it, including designated officers of employees of the Company.

(b) If for any reason a Benefit payable under this Plan is not paid when due, the Participant or Beneficiary may file a written claim with a committee appointed by the Administrator to review claims for benefits under the Plan (the "Claims Committee"). If the claim is denied or no response is received within forty-five (45) days after the date on which the claim was filed with the Claims Committee (in which case the claim will be to have been denied), the Participant or

-13-

Beneficiary may appeal the denial to the Committee within sixty (60) days of receipt of written notification of the denial or the end of the forty-five day period, whichever occurs first. In pursuing an appeal, the Participant or Beneficiary may request that the Committee review the denial, may review pertinent documents, and may submit issues and documents in writing to the Committee. A decision on appeal will be made within sixty (60) days after the appeal is made, unless special circumstances require the Committee to extend the period for another sixty (60) days.

            18. NOTICES.

All notices or election required under the Plan must be in writing. A notice or election shall be deemed delivered if it is delivered personally or sent registered or certified mail to the person at the person's last known business address.

           19. WAIVER.

The waiver of a breach of any provision in this Plan does not operate as and may not be construed as a waiver of any later breach.

           20. CONSTRUCTION.

This Plan shall be adopted and maintained according to the laws of the Commonwealth of Virginia (except its choice-of-law rules and except to the extent that such laws are preempted by applicable federal law). Headings and captions are only for convenience; they do not have substantive meaning. If a provision of this Plan is not valid or enforceable, the validity or enforceability of any other provision shall not be affected. Use of one gender includes all, and the singular and plural include each other.

           IN WITNESS WHEREOF, this instrument has been executed this 7th day of August 2003.

DOMINION RESOURCES, INC.

By /s/ Anne M. Grier                          
      Anne M. Grier
      Vice President - Human Resources

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EX-12.1

Exhibit 12.1

Virginia Electric and Power Company
Computation of Ratio of Earnings to Fixed Charges
(millions of dollars)

			Years Ended
			12 months ended June 30, 2003	2002	2001	2000	1999	1998
Earnings, as defined:
	Earnings before income taxes and minority interests in consolidated subsidiaries		$ 1,374	$1,198	$733	$  837	$  743	$ 387
	Fixed charges included in the determination of net income		302	304	311	303	297	325
		Total earnings, as defined	$ 1,676	$ 1,502	$ 1,043	$ 1,140	$ 1,040	$ 712
	Fixed charges, as defined:
		Interest charges	$ 311	$ 311	$ 320	$ 297	$ 290	$ 319
		Rental interest factor	9	10	10	6	7	6
		Total fixed charges, as defined	$ 320	$ 321	$ 330	$ 303	$ 297	$ 325
Ratio of Earnings to Fixed Charges			5.24	4.68	3.16	3.76	3.50	2.19

EX-12.2

Exhibit 12.2

Virginia Electric and Power Company
Computation of Ratio of Earnings to Fixed Charges and Preferred Dividends
(millions of dollars)

			Years Ended
			12 months ended June 30, 2003	2002	2001	2000	1999	1998
Earnings, as defined:
	Earnings before income taxes and minority interests in consolidated subsidiaries		$ 1,374	$  1,198	$  733	$  837	$   743	$ 387
	Fixed charges included in the determination of net income		302	304	310	303	297	325
		Total earnings, as defined	$ 1,676	$ 1,502	$ 1,043	$ 1,140	$ 1,040	$ 712
	Fixed charges, as defined:
		Interest charges	$ 311	$ 311	$ 320	$ 297	$ 290	$ 319
		Preference security dividend requirements of consolidated subsidiaries	23	25	38	54	57	61
		Rental interest factor	9	10	10	6	7	6
		Total fixed charges, as defined	$ 343	$ 346	$ 368	$ 357	$ 354	$ 386
Ratio of Earnings to Fixed Charges and Preferred Dividends			4.89	4.34	2.83	3.19	2.94	1.85

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Thomas F. Farrell, II, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 11, 2003
	/s/ Thomas F. Farrell, II              Thomas F. Farrell, II President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Jay L. Johnson, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 11, 2003
	/s/ Jay L. Johnson                  Jay L. Johnson President and Chief Executive Officer

EX-31.3

Exhibit 31.3

CERTIFICATIONS

I, Paul D. Koonce, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 11, 2003
	/s/ Paul D. Koonce                 Paul D. Koonce Chief Executive Officer-Transmission

EX-31.4

Exhibit 31.4

CERTIFICATIONS

I, Mark F. McGettrick, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 11, 2003
	/s/ Mark F. McGettrick                Mark F. McGettrick President and Chief Executive Officer-Generation

EX-31.5

Exhibit 31.5

CERTIFICATIONS

I, G. Scott Hetzer, certify that:

        1. I have reviewed this quarterly report on Form 10-Q of Virginia Electric and Power Company:

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 11, 2003
	/s/ G. Scott Hetzer
	G. Scott Hetzer Senior Vice President and Treasurer (Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Virginia Electric and Power Company (the Company), certify that:

1. the Quarterly Report on Form 10-Q of the Company to which this certification is an exhibit for the quarter ended June 30, 2003 (the "Report") fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)).
2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of June 30, 2003 and for the period then ended.

        /s/ Thomas F. Farrell, II                                 
Thomas F. Farrell, II
President and Chief Executive Officer
August 11, 2003

        /s/ Jay L. Johnson                                        
Jay L. Johnson
President and Chief Executive Officer
August 11, 2003

        /s/ Paul D. Koonce                                         
Paul D. Koonce
Chief Executive Officer-Transmission
August 11, 2003

        /s/ Mark F. McGettrick                                    
Mark F. McGettrick
President and Chief Executive Officer-Generation
August 11, 2003

        /s/ G. Scott Hetzer                                          
G. Scott Hetzer
Senior Vice President and Treasurer
(Principal Financial Officer)
August 11, 2003

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Virginia Electric and Power Company. and will be retained by Virginia Electric and Power Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99

Exhibit 99

VIRGINIA ELECTRIC AND POWER COMPANY

CONDENSED CONSOLIDATED EARNINGS STATEMENT
(Unaudited)

	Six Months Ended June 30, 2003	Six Months Ended December 31, 2002
	(millions)
Operating Revenue	$2,726	$2,599
Operating Expenses	1,920	1,792
Income from operations	806	807
Other income	39	14
Interest and related charges	146	146
Income before income taxes	699	675
Income taxes	259	231
Income before cumulative effect of changes in accounting principle	440	444
Cumulative effect of changes in accounting principle (net of income taxes of $51)	84	-
Net income	524	444
Preferred dividends	8	7
Balance available for common stock	$  516	$  437

The condensed consolidated earnings statement for the six months ended June 30, 2003 reflects the adoption of two new accounting standards, effective January 1, 2003. These standards are Statement of Financial Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations, and Emerging Issues Task Force Issue No. 02-03, Issues Involved in Accounting for Derivative Contracts Held for Trading Purposes and Contracts Involved in Energy Trading and Risk Management Activities. The condensed consolidated earnings statement for the six months ended December 31, 2002, which was prepared under different accounting policies regarding the accounting matters covered by the aforementioned new standards, may not combined with the condensed consolidated earnings statement for the six months ended June 30, 2003, under generally accepted accounting principles.