INVESTMENTS

DOMINION

Equity and Debt Securities

RABBI TRUST SECURITIES

Marketable equity and debt securities and cash equivalents held in Dominion's rabbi trusts and classified as trading totaled $90 million and $93 million at December 31, 2011 and 2010, respectively. Net unrealized losses on trading securities totaled less than $1 million in 2011. Net unrealized gains on trading securities totaled $5 million and $11 million in 2010 and 2009, respectively. Cost-method investments held in Dominion's rabbi trusts totaled $17 million and $18 million at December 31, 2011 and 2010, respectively.

DECOMMISSIONING TRUST SECURITIES

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



	Amortized Cost		Total Unrealized Gains ⁽¹⁾		Total Unrealized Losses ⁽¹⁾				Fair Value
(millions)
2011
Marketable equity securities:
U.S.:
Large Cap	$	1,152	$	537	$	—			$	1,689
Other	36		10		—				46
Marketable debt securities:
Corporate debt instruments	314		19		(1		)		332
U.S. Treasury securities and agency debentures	437		20		(1		)		456
State and municipal	264		24		—				288
Other	23		1		—				24
Cost method investments	118		—		—				118
Cash equivalents and other⁽²⁾	46		—		—				46
Total	$	2,390	$	611	$	(2	)	⁽³⁾	$	2,999
2010
Marketable equity securities:
U.S.:
Large Cap	$	1,161	$	515	$	—			$	1,676
Other	39		11		—				50
Marketable debt securities:
Corporate debt instruments	310		18		(1		)		327
U.S. Treasury securities and agency debentures	380		12		(1		)		391
State and municipal	244		7		(4		)		247
Other	19		—		—				19
Cost method investments	108		—		—				108
Cash equivalents and other⁽²⁾	79		—		—				79
Total	$	2,340	$	563	$	(6	)	⁽³⁾	$	2,897


(1)	Included in AOCI and the decommissioning trust regulatory liability as discussed in Note 2.


(2)	Includes pending purchases of securities of $11 million and $43 million at December 31, 2011 and 2010, respectively.


(3)	The fair value of securities in an unrealized loss position was $164 million and $252 million at December 31, 2011 and 2010, respectively.

The fair value of Dominion's marketable debt securities held in nuclear decommissioning trust funds at December 31, 2011 by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	99
Due after one year through five years	292
Due after five years through ten years	332
Due after ten years	377
Total	$	1,100

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



Year Ended December 31,	2011		2010			2009
(millions)
Proceeds from sales	$	1,757	$	1,814	⁽¹⁾	$	1,478
Realized gains⁽²⁾	79		111			215
Realized losses⁽²⁾	92		63			211


(1)	The increase in proceeds primarily reflects the replacement of commingled funds with actively managed portfolios. Does not include $1 billion of proceeds reflected in Dominion's Consolidated Statement of Cash Flows from the sale of temporary investments consisting of time deposits and Treasury Bills, purchased following the sale of substantially all of Dominion's Appalachian E&P operations.


(2)	Includes realized gains and losses recorded to the decommissioning trust regulatory liability as discussed in Note 2.

Dominion recorded other-than-temporary impairment losses on investments held in nuclear decommissioning trust funds as follows:



Year Ended December 31,	2011			2010			2009
(millions)
Total other-than-temporary impairment losses⁽¹⁾	$	75		$	59		$	175
Losses recorded to decommissioning trust regulatory liability	(24		)	(21		)	(80		)
Losses recognized in other comprehensive income (before taxes)	(3		)	(3		)	(3		)
Net impairment losses recognized in earnings	$	48		$	35		$	92


(1)	Amounts include other-than-temporary impairment losses for debt securities of $6 million, $10 million and $13 million at December 31, 2011, 2010 and 2009, respectively.

Equity Method Investments

Investments that Dominion accounts for under the equity method of accounting are as follows:



Company	Ownership%		Investment Balance				Description
As of December 31,			2011		2010
(millions)
Fowler I Holdings LLC	50	%	$	166	$	180	Wind-powered merchant generation facility
NedPower Mount Storm LLC	50	%	146		149		Wind-powered merchant generation facility
Elwood Energy LLC	50	%	108		98		Natural gas-fired merchant generation peaking facility
Iroquois Gas Transmission System, LP	24.72	%	104		106		Gas transmission system
Other	various		29		38
Total			$	553	$	571

Dominion's equity earnings on these investments totaled $35 million in 2011 and $42 million in 2010 and 2009. Excluding a $123 million distribution in 2009 from Fowler Ridge, Dominion received distributions from these investments of $55 million, $60 million and $63 million in 2011, 2010, and 2009, respectively. As of December 31, 2011 and 2010, the carrying amount of Dominion's investments exceeded Dominion's share of underlying equity in net assets by approximately $32 million and $7 million, respectively. The differences relate to Dominion's investments in wind projects and primarily reflect its capitalized interest during construction and the excess of its cash contributions over the book value of development assets contributed by Dominion's partners for these projects. The differences are generally being amortized over the useful lives of the underlying assets.

VIRGINIA POWER

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



	Amortized Cost		Total Unrealized Gains ⁽¹⁾		Total Unrealized Losses ⁽¹⁾				Fair Value
(millions)
2011
Marketable equity securities:
U.S.:
Large Cap	$	460	$	218	$	—			$	678
Other	18		5		—				23
Marketable debt securities:
Corporate debt instruments	204		11		(1		)		214
U.S. Treasury securities and agency debentures	166		4		—				170
State and municipal	114		10		—				124
Other	16		1		(1		)		16
Cost method investments	118		—		—				118
Cash equivalents and other⁽²⁾	27		—		—				27
Total	$	1,123	$	249	$	(2	)	⁽³⁾	$	1,370
2010
Marketable equity securities:
U.S.:
Large Cap	$	469	$	207	$	—			$	676
Other	20		5		—				25
Marketable debt securities:
Corporate debt instruments	205		10		—				215
U.S. Treasury securities and agency debentures	141		2		—				143
State and municipal	103		1		(2		)		102
Other	15		—		—				15
Cost method investments	108		—		—				108
Cash equivalents and other⁽²⁾	35		—		—				35
Total	$	1,096	$	225	$	(2	)	⁽³⁾	$	1,319


(1)	Included in AOCI and the decommissioning trust regulatory liability as discussed in Note 2.


(2)	Includes pending purchases of securities of $13 million and $35 million at December 31, 2011 and 2010, respectively.


(3)	The fair value of securities in an unrealized loss position was $99 million and $159 million at December 31, 2011 and 2010, respectively.

The fair value of Virginia Power's debt securities at December 31, 2011, by contractual maturity is as follows:



	Amount
(millions)
Due in one year or less	$	16
Due after one year through five years	155
Due after five years through ten years	205
Due after ten years	148
Total	$	524

Presented below is selected information regarding Virginia Power's marketable equity and debt securities.



Year Ended December 31,	2011		2010			2009
(millions)
Proceeds from sales	$	1,030	$	1,192	⁽¹⁾	$	715
Realized gains⁽²⁾	34		52			104
Realized losses⁽²⁾	34		23			99


(1)	The increase in proceeds primarily reflects the replacement of commingled funds with actively managed portfolios.


(2)	Includes realized gains and losses recorded to the decommissioning trust regulatory liability as discussed in Note 2.

Virginia Power recorded other-than-temporary impairment losses on investments as follows:



Year Ended December 31,	2011			2010			2009
(millions)
Total other-than-temporary impairment losses⁽¹⁾	$	29		$	25		$	94
Losses recorded to decommissioning trust regulatory liability	(24		)	(21		)	(80		)
Losses recorded in other comprehensive income (before taxes)	(1		)	(1		)	—
Net impairment losses recognized in earnings	$	4		$	3		$	14


(1)	Amounts include other-than-temporary impairment losses for debt securities of $4 million, $6 million and $7 million at December 31, 2011, 2010 and 2009, respectively.

OTHER INVESTMENTS

Dominion and Virginia Power hold restricted cash and cash equivalent balances that primarily consist of money market fund investments held in trust for the purpose of funding certain qualifying construction projects. At December 31, 2011 and 2010, Dominion had $147 million and $415 million, respectively, and Virginia Power had $32 million and $169 million, respectively, of restricted cash and cash equivalents. These balances are presented in Other Current Assets and Investments in the Consolidated Balance Sheets.