Income Taxes

3 Months Ended

Mar. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

For continuing operations, including noncontrolling interests, the statutory U.S. federal income tax rate reconciles to Dominion's and Virginia Power’s effective income tax rate as follows:

	Dominion				Virginia Power
Three Months Ended March 31,	2013		2012		2013		2012
U.S. statutory rate	35.0	%	35.0	%	35.0	%	35.0	%
Increases (reductions) resulting from:
State taxes, net of federal benefit	4.0		4.0		3.9		3.9
Investment and production tax credits	(1.5	)	(0.5	)	—		—
Valuation allowances	0.1		(2.6	)	—		—
AFUDC - equity	(0.7	)	(0.7	)	(1.3	)	(0.9	)
Other, net	(0.4	)	(0.7	)	0.2		(0.2	)
Effective tax rate	36.5	%	34.5	%	37.8	%	37.8	%

Dominion's effective tax rate in 2012 reflects a $20 million reduction of valuation allowance related to state operating loss carryforwards attributable to Fairless. After considering the results of Fairless' operations in recent years and a forecast of future operating results reflecting Dominion's planned purchase of the facility, Dominion concluded that it was more likely than not that the tax benefit of the operating losses would be realized. Significant assumptions included future commodity prices, in particular, those for electric energy produced by Fairless and those for natural gas, as compared to other fuels used for the generation of electricity, which would significantly influence the extent to which Fairless is dispatched by PJM.

As of March 31, 2013, there have been no material changes in Dominion's and Virginia Power's unrecognized tax benefits or possible changes that could reasonably be expected to occur during the next twelve months. See Note 5 to the Consolidated Financial Statements in Dominion's and Virginia Power's Annual Report on Form 10-K for the year ended December 31, 2012 for a discussion of these unrecognized tax benefits.