U-1/A

File No. 70-9477

As filed with the Securities and Exchange Commission on December 18, 2002

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM U-1 APPLICATION-DECLARATION
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POST-EFFECTIVE AMENDMENT NO. 13
TO
APPLICATION-DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
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Dominion Resources, Inc.
120 Tredegar Street
Richmond, VA 23219 Consolidated Natural Gas Company
120 Tredegar Street
Richmond, VA 23219

(Name of company filing this statement and
address of principal executive offices)
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Dominion Resources, Inc.
(Name of top registered holding company
parent of each applicant or declarant)
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James F. Stutts
Vice President and General Counsel
Dominion Resources, Inc.
120 Tredegar Street
Richmond, VA 23219

(Name and address of agent for service)
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The Commission is also requested to send copies
of any communication in connection with this matter to:

Sharon L. Burr, Esq.
Senior Counsel
Dominion Resources Services, Inc.
120 Tredegar Street
Richmond, VA 23219 John D. McLanahan, Esq.
Troutman Sanders LLP
600 Peachtree Street, N.E.
Atlanta, GA 30308

APPLICATION-DECLARATION

UNDER

SECTION 13

OF

THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935

FOR APPROVAL OF

revised service agreement and related matters

Amendment No. 11 ¹ to the foregoing Application/Declaration is hereby amended and restated to read in its entirety as follows:

Item 1.     Description of Proposed Transactions.

                        This post-effective amendment to the Application-Declaration of the Applicants in File No. 70-9477 is submitted, under the Public Utility Holding Company Act of 1935 (the "Act") in connection with proposed changes in the standard service agreement (the "Current Agreement") of Dominion Resources Services, Inc. ("DRI Services") and Consolidated Natural Gas Service Company, Inc.("CNG Services"). The Current Agreement was put in place following the merger (the "Merger") of Dominion Resources, Inc. ("DRI") and Consolidated Natural Gas Company ("CNG"), which was approved in this proceeding by the Securities and Exchange Commission (the "Commission") on December 15, 1999, HCAR No. 35-27113 (the "Order"), and completed on January 28, 2000. This amendment supplements and completes the record with respect to certain matters set forth in the Order.

                        CNG Services was formed in 1966, and DRI Services was formed by DRI as a new subsidiary service company in late 1999 in anticipation of the Merger. After closing of the Merger, DRI Services and CNG Services entered into the Current Agreement, a new single system-wide service agreement, with DRI and all principal subsidiaries of DRI including subsidiaries of CNG. The Current Agreement was modeled on the service agreement in effect for the CNG system prior to the Merger. The DRI-CNG combined system had, until January 1, 2001, been operating with two service companies, and each system company had the opportunity to elect to purchase services from either service company. The Order requires that no later than March 31, 2001, all service functions will be centralized and a single service company will provide all routine service functions to the DRI-CNG combined system.

                         The Order further authorized that, for a limited period of time ending no later than March 31, 2001, Virginia Electric and Power Company ("Virginia Power"), an electric utility company subsidiary of DRI, can provide certain services to system companies under a subcontract with DRI Services (the "Virginia Power Support Agreement"). DRI has committed to make whole any company for any excess payment made to Virginia Power. The Virginia

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1 This Post-Effective Amendment No. 13 is amending and restating Post-Effective Amendment No. 11 filed under 70-9477. DRI has also filed Post-Effective No. 12 in File No. 70-9477, however that amendment relates to the extension of time in which DRI's subsidiary, Dominion Capital, Inc. has to divest its assets.

Power Support Agreement has and continues to serve as a practical and efficient means for Virginia Power to provide to DRI Services the same types of services that it has historically provided to DRI system companies. The Virginia Power Support Agreement was established primarily to be the Virginia State Corporation Commission ("VSCC") approved contractual framework for which services may be performed by Virginia Power for its affiliates.

                       The Order also authorized a form of ancillary service agreement under which Virginia Power can contract with other associate companies for specific services. The VSCC has not approved the form of ancillary service agreement and it has not been used by Virginia Power. However similar ancillary service agreements have been put into place among the DRI system gas utility companies and Dominion Transmission, Inc. pursuant to Rule 87. ² The categories of services performed pursuant to these agreements include facility and well maintenance, computer software, pipe monitoring and pigging, and metering.

                        DRI and CNG now state the following:

                        1.     The merger of CNG Services into DRI Services.

                        CNG Services, a Delaware corporation, had issued and outstanding 100 shares of common stock, $100 par value per share. DRI Services, a Virginia corporation, has issued and outstanding 200 shares of common stock, no par value per share. CNG transferred all the outstanding shares of CNG Services to DRI as a dividend. CNG Services was, effective January 1, 2001, merged with DRI Services, with DRI Services being the surviving corporation. Each share of the outstanding common stock of CNG Services was converted into a share of common stock of DRI Services pursuant to the merger.

                        2.     Adoption of a new standard system service agreement.

                        DRI has completed an analysis and review of services currently centralized and considered efficiencies to be gained by a combination of the two service companies, and, as a result, propose revisions to the Current Agreement. Changes will be made to the basis of allocation to reflect consideration of what services and groups will be in the combined services company. Certain wording changes will also be made to the Current Agreement in order to update references, eliminate unnecessary detail, clarify the mechanics of the methods of cost allocation and better align the allocation basis with the cost driver of the service. DRI believes that for the period commencing January 1, 2001 through the date of this filing, the revised allocations have been in compliance with the examination findings released by the Office of Public Utility Regulation on July 26, 2002 and will continue to be in compliance in the future.

                        Accordingly, a revised DRI system service agreement (the "New Agreement") would be executed, effective January 1, 2001, by DRI Services with all the subsidiaries of DRI with which it is a party under the Current Agreement. The New Agreement will supersede and replace all of such earlier service agreements. A form of the New Agreement is attached as Exhibit K-3.1. A matrix showing the changes to allocations methods together with a copy of the

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2 Where Ancillary Service Agreements have been entered into by The Peoples Natural Gas Company and/or Hope Gas, Inc., the necessary state commission approvals have been obtained. No state commission approvals are needed for the remaining ancillary service agreements currently in place.

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Current Agreement marked to show changes between it and the New Agreement is being provided to the staff as supplemental information. Although the New Agreement provides for the DRI subsidiaries to select those categories of services they would need for the coming year, it is anticipated that each of such subsidiaries will generally select certain core management services required for the functioning of an integrated system. Core services include such categories as accounting, auditing, legal and regulatory, information technology, executive and administrative, corporate planning, tax, corporate secretary, investor relations, treasury/finance and external affairs. Request is made for approval of the New Agreement.

                       The cost of certain activities performed or obtained by DRI Services relate to overall governance and corporate existence of DRI, the parent company. The cost associated with these activities will be charged directly to DRI. Investor Relations, Corporate Secretary, Shareholder Administration and Corporate Financial Planning generally include these activities. In addition, the cost of certain Executive, Accounting, Treasury, Tax and Legal activities associated with DRI corporate existence and governance will be directly charged to the parent company. Examples include activities associated with maintaining the books and records of DRI, DRI debt and equity offerings, and the board of directors' meetings.

                        Request is also made for authority for DRI Services to use a "60-day letter proceeding" to obtain any required Commission clearance with respect to changes to the New Agreement. In this regard, no change in the organization of DRI Services, the type and character of the companies to be serviced, the method of allocating costs to associate companies, or in the scope or character of services to be rendered, shall be made unless and until DRI Services shall have given the Commission written notice of such proposed changes not less than 60 days prior to the effectiveness of any such change. If upon the receipt of any such notice, the Commission within the 60-day period shall notify DRI Services that a question exists as to whether the aforesaid proposed change is consistent with the provisions of Section 13 of the Act, or any rule, regulation or order thereunder, the proposed change shall not become effective unless and until DRI Services shall have filed with the Commission an appropriate declaration with respect to such proposed change, and the Commission shall have permitted such declaration to become effective.

                        3.     Amendment and continuation of the Virginia Power Support Agreement

                        During the post-Merger transition period to date, considerable personnel and service functions have been moved from Virginia Power to DRI Services to centralize functions and services. It has been determined by DRI that movement of other functions at this time would be disruptive and would create no significant efficiencies. DRI has moved the following functions from Virginia Power into DRI Services.

Auditing

Legal

Employee Benefits/Pension Investment

Executive and Administrative

Environmental Compliance

Risk Management

Tax

Treasury/Finance

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                        At the time of the Order, it was anticipated that the generation function of Virginia Power would be legally separated from the delivery function, thereby resulting in an unregulated generation subsidiary which could exchange services with the other unregulated associate companies within the DRI system without first obtaining approval from the Virginia and North Carolina Utilities Commissions. However, the Virginia Commission has since denied Virginia Power's request for legal separation and instead the delivery and generation functions of Virginia Power remain within one legal entity but are operated on a functionally separated basis. Virginia Power still retains some service functions primarily needed in its own operations but which are also of some importance to its associates. In order to promote efficiencies within the DRI system and reduce duplication of per sonnel and the costs associated therewith, it continues to be necessary for Virginia Power employees to provide certain services, as listed below and in Exhibit A to the Revised Virginia Power Support Agreement, for the benefit of its associates. Under the laws of the Commonwealth of Virginia the provision of such services by a public utility to its affiliates requires prior State Corporation Commission approval, which can take up to ninety days to obtain. Such a delay in the approval process often hinders the ability of the DRI system companies to carry out their business in a timely and efficient manner. Both the Virginia State Corporation Commission and the North Carolina Utilities Commission have already approved both the Virginia Power Support Agreement (See Order of VSCC dated December 29, 1999 Case No. PUA990068 and Order of NCUC dated January 27, 2000 in Docket No. E-22, Sub 385) and the Revised Virginia Power Support Agreement (See Order of VSCC dated December 15, 2000 Case No. PUA9006 8 and Order of NCUC dated January 19, 2001 Docket No. E-22, Sub 385) and accordingly, use of these agreements as a mechanism to provide the approved services through DRI Services to the DRI associates will allow the DRI System to carry out its business strategy in a more timely and efficient manner.

                       Additionally, many of the DRI Services' personnel are currently located in facilities owned or leased by Virginia Power and use equipment and materials owned by Virginia Power in carrying out their everyday functions. To require that DRI Services purchase or lease separate facilities, equipment and materials in order to carry out their operations would create a considerable and unnecessary expense which would in turn be borne by all of the system companies.

                       For these reasons it is requested that the Revised Virginia Power Support Agreement be approved and allowed to remain in place. Further changes are likely in Virginia Power's service arrangements not only in connection with the disaggregation of its generating assets, but also in connection with further anticipated changes in the DRI system to ultimately conform its legal structure to its functional business structure. It is therefore proposed that the Virginia Power Support Agreement be terminated and replaced with a revised Virginia Power Support Agreement ("Revised Virginia Power Support Agreement"). The following services would be provided under the Revised Virginia Power Support Agreement.

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Accounting

Regulatory

Human Resources

Operations

Business and Operations Services

Marketing

Budgeting and Planning

Purchasing

Rates

Research

Customer Service

Energy Marketing

Office Space and Equipment

External Affairs

                        The scope of services, in terms of types of services and number of personnel involved, under the Revised Virginia Support Agreement will be reduced from that under the current support agreement. The annual billings to DRI Services by Virginia Power under the Virginia Power Support Agreement for the year ended December 31, 2001 were approximately $24,043,000. The total revenues of Virginia Power for 2001 were $4.9 billion; the provision of services to DRI Services under the Virginia Power Support Agreement can therefore be regarded as incidental to the main business of Virginia Power as an electric utility company pursuant to Rule 87(a)(3). Virginia Power proposes to continue to provide de minimis services (not to exceed 1% of Virginia Power revenues for the year) to associate companies through DRI Services. Most of such services will be in connection with the prov ision of facilities and equipment and customer services. Virginia Power represents that the Revised Virginia Power Support Agreement does not provide the service of electric transmission to its affiliates.

                        Virginia Power requests authority to provide services under the Revised Virginia Power Support Agreement through December 31, 2005 and requests that the Commission reserve jurisdiction over the provision of services by Virginia Power under the Revised Virginia Power Support Agreement after such date.

                        A form of the Revised Virginia Power Support Agreement is filed as Exhibit K-3.2. Costs that are to be allocated under the Revised Virginia Power Support Agreement will include all costs of doing business including interest on debt and a return for the use of equity capital. A copy of the current Virginia Power Support Agreement marked to show changes between it and the new agreement has been provided to the staff as supplemental information.

                       The North Carolina Utilities Commission approved the Merger upon several regulatory conditions with which DRI is required to comply. One of the conditions was that in any filing with the Commission under the Act made in connection with asset transfers involving

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Virginia Power doing business in North Carolina as North Carolina Power ("NC Power"), DRI is to make a request that the Commission include certain language in its order. DRI, therefore, requests that the following language be included in the order to be issued in this proceeding:

Approval of this application in no way precludes the North Carolina Utilities Commission from scrutinizing and establishing the value of the asset transfer for purposes of determining the rates for services rendered to NC Power's customers. It is the Commission's intention that the North Carolina Utilities Commission retain the right to review and determine the value of such asset transfer for purposes of determining rates.

Notwithstanding the foregoing, Virginia Power is not requesting Commission approval of any asset transfer pursuant to this Application.

                       4.     Changes to the New Agreement

                        DRI and DRI Services will not alter the nature of services, pricing standards or the methods of allocations incorporated in the New Agreement except through a 60-Day Letter proceeding or with the prior authorization of the Commission.

                        5.     Ancillary service agreements with DRI Services.

                        Ancillary service agreements have been entered by certain subsidiaries of CNG (including gas utility companies) to allow provision of services by such subsidiaries to DRI Services which will, in turn, provide the services through the New Agreement to Virginia Power and other associate companies.³ The types of services provided pursuant to these agreements include customer service, marketing, vehicle maintenance, facility management, purchasing, supply chain management, call center, billing, market research and support, engineering, business development, telecommunications, external and governmental affairs. This would be in accordance with the VSCC's intent to have all services from and to Virginia Power to be run through DRI Services for ease of regulatory oversight.

6. Overall Representations

The provision of services pursuant to the New Agreement, the Revised Virginia Power Support Agreement and/or any other ancillary services agreement(s) (as referred to in paragraph 5 above), whereby one system company is providing services to another system company, will not cause the service provider or receiver to become a public utility company under the Act.

In addition, no transmission services or ancillary services (as identified by FERC in Order No. 888) shall be provided or received by Virginia Power, or any other Dominion system affiliate or subsidiary, through the New Agreement, the Revised Virginia Power Support Agreement or any ancillary services agreement(s) (as referred to in paragraph 5 above), in such a manner that would cause any Dominion system company to exert operational control over the transmission assets and/or ancillary services (as referenced in 18 C.F.R. 35.34) of another Dominion system company.

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3 Where Ancillary Service Agreements have been entered into by The Peoples Natural Gas Company and/or Hope Gas, Inc., the necessary state commission approvals have been obtained. No state commission approvals are needed for the remaining Ancillary Service Agreements currently in place.

7. Rule 54 Analysis

                        DRI currently meets all of the conditions of Rule 53(a), except for clause (1). At September 30, 2002, DRI's "aggregate investment", as defined in Rule 53(a)(1), in "exempt wholesale generators" ("EWGs") and "foreign utility companies" ("FUCOs"), was approximately $2,967.4 million (of which approximately $2,959.1 million was in EWGs). With respect to Rule 53 (a) (1), however, the Commission has determined that DRI 's financing of its investment in EWGs and FUCOs in an amount not to exceed 100% of its "average consolidated retained earnings" plus $4.5 billion would not have either of the adverse effects set forth in Rule 53 (c). At September 30, 2002, DRI's "average consolidated retained earnings" were $1,102.3 million.

See Dominion Resources, Inc. Holding Company Act Release No. 35-27485, dated December 28, 2001 (the "Rule 53 (c) Order"). DRI continues to assert that its investment in EWGs and FUCOs will not adversely affect the DRI system.

                        In addition, DRI and its subsidiaries are in compliance and will continue to comply with the other provisions of Rule 53 (a) and (b), as demonstrated by the following determinations:

                        (i)      The DRI system maintains books and records, and prepares financial statements, in accordance with Rule 53 (a) (2). Furthermore, DRI has undertaken to provide the Commission access to such books and records and financial statements as it may request;

                        (ii)      No more than 2% of the employees of DRI's domestic public utility companies render services at any one time, to its EWGs or FUCOs;

                        (iii)     DRI has submitted (a) a copy of each Form U-1 and Rule 24 certificate that has been filed with the Commission under Rule 53 and (b) a copy of Item 9 of the Form U5S and Exhibits G and H thereof to each state regulator having jurisdiction over the retail rates of DRI's public utility subsidiaries;

                        (iv)     Neither DRI nor any subsidiary has been the subject of a bankruptcy or similar proceeding (unless a plan of reorganization has been confirmed in such proceeding);

                       (v)      DRI's "average consolidated retained earnings" for the four most recent quarterly periods have not decreased by 10% or more from the average for the previous four quarterly periods; and

                        (vi)     In the previous fiscal year, DRI did not report operating losses attributable to its investment in EWGs/FUCOs exceeding 3% of DRI's consolidated retained earnings.

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                         The proposed transactions, considered in conjunction with the effect of the capitalization and earnings of DRI's EWGs and FUCOs, would not have a material adverse effect on the financial integrity of the DRI system, or an adverse impact on DRI's public-utility subsidiaries, their customers, or the ability of State commissions to protect such public-utility customers. The Rule 53 (c) Order was predicated, in part, upon an assessment of DRI's overall financial condition which took into account, among other factors, DRI's consolidated capitalization ratio and its retained earnings, both of which have improved since the date of the order. In the aggregate DRI's EWG and FUCO investments have been profitable for all quarterly periods ending March 31, 2000 through March 31, 2002. DRI's EWG and FUCO investments also were profitable for the period from December 28, 2 001 through March 31, 2002.As of September 30, 2001, the most recent period for which financial statement information was evaluated in the Rule 53 (c) Order, DRI's consolidated capitalization consisted of 33.4% common equity, 6.4% preferred stock and 60.2% debt (including long and short-term debt and preferred stock). As of March 31, 2002, the consolidated capitalization ratios of DRI, with consolidated debt including all short-term debt and non-recourse debt of its EWGs and FUCOs, were as follows:

	As of March 31, 2002
	%
Common shareholders' equity	34.7
Preferred stock	5.9
Long-term and short-term debt	59.4
	100.0

                  DRI's consolidated retained earnings decreased from $1,199 million as of March 31, 2000 to $1,077 million as of March 31, 2002 and grew from $922 million as of December 31, 2001 to $1,077 million as of March 31, 2002. DRI's EWGs and FUCOs have made a positive contribution to earnings by contributing approximately $1,052.6 million in revenues from March 31, 2000 through March 31, 2002, and net income of $274.9 million for the same period. DRI's EWG and FUCO contributions to revenues and net earnings from December 31, 2001 to March 31, 2002 were $146 million and $8.8 million, respectively. Accordingly, since the date of the Rule 53 (c) Order, the capitalization and earnings attributable to DRI's investments in EWGs and FUCOs has not had an adverse impact on DRI's financial integrity.

Item 2.      Fees, Commissions and Expenses.

                         The fees, commissions and expenses to be paid or incurred, directly or indirectly, in connection with seeking the authorizations herein requested are estimated as follows:

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Fee, Commission or Expense	Thousands
Legal Fees and Expenses	$50
	=======
Total	$50

Item  3.       Applicable Statutory Provisions.

                        Section 13 of the 1935 Act and Rules 54, 87, 88, 90 and 91 thereunder are or may be directly or indirectly applicable to the proposed transactions for which authorization is sought in this Application-Declaration.

Item 4.      Regulatory Approvals.

Approval of the revised New Agreement has been obtained from the state utility commissions of Virginia, North Carolina, Pennsylvania and West Virginia. Approval of the revised Virginia Power Support Agreement has been obtained from the state utility commissions in Virginia and North Carolina. DRI and CNG require no other regulatory approvals or consents to complete the transactions contemplated by this post-effective amendment.

Item 5.      Procedure.

                        The Commission is respectfully requested forthwith to issue an order of the Commission granting and permitting this post-effective amendment to this Application-Declaration to become effective.

            It is submitted that a recommended decision by a hearing or other responsible officer of the Commission is not needed for approval of the proposed transactions. The Division of Investment Management may assist in the preparation of the Commission's decision. There should be no waiting period between the issuance of the Commission's order and the date on which it is to become effective.

Item 6.      Exhibits.

Exhibit D-7.2	Order of the Virginia State Corporation Commission. (Filed by paper copy)
Exhibit D-8.2	Order of the North Carolina Utilities Commission. (Filed by paper copy)
Exhibit D-9.2	Order of the Pennsylvania Public Utility Commission. (Filed herewith)
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Exhibit D-10.2	Order of the West Virginia Public Service Commission (Filed herewith)
Exhibit H-8	Allocation Matrix
Exhibit K-3.1	Form of New Service Agreement.
Exhibit K-3.2	Form of Revised Virginia Power Support Agreement.

Item 7.       Information as to Environmental Effects.

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                       The changes in service company arrangements neither involve a "major federal action" nor "significantly affect the quality of the human environment" as those terms are used in Section 10(2)(C) of the National Environmental Policy Act, 42 U.S.C. Section 4321, et seq. The only federal actions related to the changes in service company arrangements pertain to the Commission's approval of this post-effective amendment to this Application-Declaration under the 1935 Act and the other approvals and actions described in Item 4 above. The changes in service company arrangements will not result in changes in the operations of DRI, CNG or any of their respective subsidiaries that would have any impact on the environment. No federal agency is preparing an environmental impact statement with respect to this matter.

                       Pursuant to the Public Utility Holding Company Act of 1935, each of the undersigned companies has caused this Application-Declaration to be signed on its behalf by the undersigned thereunto duly authorized.

DOMINION RESOURCES, INC.	CONSOLIDATED NATURAL GAS COMPANY
By: /s/ James F. Stutts	By:   /s/ James F. Stutts
Name: James F. Stutts Title: Vice President and General Counsel Date: December 18, 2002	Name: James F. Stutts Title: Vice President and General Counsel Date: December 18, 2002

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EX-99.1

Exhibit D-9.2

PENNSYLVANIA
PUBLIC UTILITY COMMISSION
Harrisburg, PA. 17105-3265

	Public Meeting held November 29, 2000
Commissioners Present:

Robert K. Bloom, Vice Chairman
Nora Mead Brownell
Aaron Wilson, Jr.
Terrance J. Fitzpatrick

Affiliated Interest Agreement Between The Peoples Natural Gas Company d/b/a Dominion Peoples and Dominion Resources Services, Inc.

ORDER

BY THE COMMISSION,

On September 27, 2000, The Peoples Natural Gas Company d/b/a Dominion Peoples ("Dominion Peoples") filed an Affiliated Interest Agreement with Dominion Resources Services, Inc. ("DRS"). On October 18, 2000, the Commission extended the period for consideration for this Agreement until further order of the Commission. The Agreement pertains to the provision of a variety of administrative, management and other services by DRS.

This agreement is filed in accordance with the requirements of Section 2102(b) of the Public Utility Code, 66 Pa. C.S. Section 2102(b).

According to Dominion Peoples, the Agreement is a service agreement for a variety of administrative, management, and other services by DRS, which will supplant an agreement between The Peoples Natural Gas Company, DRS and Consolidated Natural Gas Services Company ("CNG Services"). The existing agreement was approved by Commission Order on January 12, 2000, at Docket No. G-00990713.

Dominion Peoples seeks approval of the new services agreement in anticipation of the merger of DRS and CNG Services in the first quarter of 2001 after all other necessary regulatory approvals have been obtained. Dominion Peoples states that the new service agreement will become effective as of the effective date of the DRS/CNG Services merger.

Dominion Peoples estimates that no more than ten people will be transferred from Dominion Peoples to DRS as a result of the service company merger and that no equipment or facilities will be transferred under this Agreement. Dominion Peoples states that the personnel transferred will be primarily from the Legal and Governmental Affairs Divisions, in order to support any affiliated company and not solely Dominion Peoples.

  Dominion Peoples states that for the year-to-date period ending September 30, 2000, it has paid CNG Services $9.58 million, excluding one-time charges for restructuring costs and cumulative effect items. During the same time period, DRS received a total of $3 million from Dominion Peoples under its existing Agreement, which excludes one-time charges for restructuring charges. The estimated annual budget amount for 2001 for services to be provided by DRS is $21.5 million. In addition, Dominion Peoples states that all services DRS provides, will be provided at cost.

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Dominion Peoples states that it believes that this Agreement will benefit its ratepayers by resulting in efficiencies and cost savings that would otherwise not be available.

The Company indicates that no services will be provided prior to Commission approval . Therefore, the company has not derived revenues from, nor allocated costs for, its Pennsylvania operations in excess of the exception set forth at Section 2102(d) of the Public Utility Code. Consequently, there has been no violation of Chapter 21.

The Commission has examined the Agreement and has determined that it appears to be reasonable and consistent with the public interest; however, approval of the Agreement does not preclude the Commission from investigating during any formal proceeding, the reasonableness of any charges under the Agreement; THEREFORE,

IT IS ORDERED:

1. That the Affiliated Interest Agreement between The Peoples Natural Gas Company d/b/a Dominion Peoples and Dominion Resources Services, Inc. be, and hereby is, approved.

2. That acceptance does not preclude the Commission from investigating during any formal proceeding the reasonableness of any charges under the Agreement.

3. That this Docket be closed.

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                                                                       BY THE COMMISSION,

                                                                       James J. McNulty

                                                                       Secretary

(SEAL)

ORDER ADOPTED: November 29, 2000

ORDER ENTERED: November 29, 2000

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EX-99.2

Exhibit D-10.2

PUBLIC SERVICE COMMISSION

OF WEST VIRGINIA

CHARLESTON

      At a session of the PUBLIC SERVICE COMMISSION OF WEST VIRGINIA in the City of Charleston on the 27th day of November, 2000.

CASE NO. 00-1462-G-PC
HOPE GAS, INC., dba DOMINION HOPE
Petition for consent and approval of an agreement between Hope Gas, Inc., dba Dominion Hope and Dominion Resources Services, Inc.

COMMISSION ORDER

      On September 28, 2000, Hope Gas, Inc., dba Dominion Hope (Hope Gas) filed a petition for consent and approval to enter into a service agreement for management, administrative, and other services with Dominion Resources Services, Inc. (Dominion Resources Services), an affiliate of Hope Gas. The new service agreement will supplant an agreement between Hope Gas, Dominion Resources Services and Consolidated Natural Gas Service Company, Inc. (CNG Services) which was approved by the Commission in an order entered on January 14, 2000, in Case No. 99-1552-G-PC.

Background

      Hope Gas and Dominion Resources Services are wholly owned subsidiaries of Dominion Resources, Inc. (Dominion). CNG Services was formed in 1966, and Dominion Resources Services was formed by Dominion in anticipation of the merger between Dominion and Consolidated Natural Gas Company (CNG). Counsel for Hope Gas explained, that after the closing of the merger, which was approved by the Commission in an order dated July 27, 1999, in Case No. 99-0462-G-PC, Dominion and CNG Services entered into a service agreement. Counsel for Hope Gas stated that, to date, the merged Dominion/CNG systems have been operating with two service companies, Dominion Resources Services and CNG Services (both subsidiaries of Dominion).

      Subsequently, the Securities and Exchange Commission entered an order directing that all service functions for the merged Dominion/CNG corporate entity be centralized and provided by a single company by March 31, 2001. This order of the Securities and Exchange Commission led Hope Gas to this case with the Commission.

      Counsel for Hope Gas explained that the basis of allocation in the existing service agreement was modified to reflect what services and groups will be in the combined services company. Additionally, Counsel for Hope Gas stated that certain wording changes will be made to the existing service agreement in order to update references, eliminate unnecessary detail, and clarify the mechanics of the methods of cost allocation. A copy of the existing service agreement and a copy of the proposed agreement between Hope Gas and Dominion Resources Services were attached to Hope Gas' petition.

      Counsel for Hope Gas asserted that the financial condition of Hope Gas was reviewed in its most recent rate case (Case No. 98-0001-G-42T). Counsel for Hope Gas further asserted that Dominion Resources Services is not subject to the jurisdiction of the Commission. Thus, Hope Gas requested a waiver of the requirement to produce information on its financial condition and on the financial condition of Dominion Resources Services. Counsel for Hope Gas also requested that notice and hearing be waived.

      Counsel for Hope Gas stated that the proposed agreement will have no adverse affect upon its natural gas service. Counsel for Hope Gas further stated that consent and approval should be granted since the proposed agreement (1) is fair and reasonable, (2) gives no party an advantage over the other and (3) is in the public interest. Hope Gas believes that the benefits derived from this agreement will enable it to conduct its public utility business more efficiently.

      On November 2, 2000, Commission Staff filed an Initial and Final Joint Staff Memorandum in which it recommended that the Commission approve the agreement without hearing. Commission Staff stated that the order approving the agreement should clearly indicate that approval of the agreement does not constitute approval of the terms and conditions contained therein for the use of any cost allocations. Commission Staff further recommended that the Commission waive Hope Gas' obligation to demonstrate its financial condition or that of Dominion Resources Services.

DISCUSSION

      W.Va. Code Section 24-2-12 reads, in pertinent part, as follows:
                Unless the consent and approval of the public service commission of West Virginia is first obtained: ... (f) no public utility subject to the provisions of this chapter, except railroads other than street railroads, may by any means, direct or indirect, enter into any contract or arrangement for management, construction, engineering, supply or financial services or for the

furnishing of any other service, property or thing, with any affiliated corporation, person or interest[.]

            . . .                 The commission may grant its consent in advance or exempt from the requirements of this section all assignments, transfers, leases, sales or other disposition of the whole or any part of the franchises, licenses, permits, plants, equipment, business or other property of any public utility, or any merger or consolidation thereof and every contract, purchase of stocks, arrangement, transfer or acquisition of control, or other transaction referred to in this section, upon proper showing that the terms and conditions thereof are reasonable and that neither party thereto is given an undue advantage over the other, and do not adversely affect the public in this state.

            . . .

                [T]he commission shall, if the public will be convenienced thereby, enter such order as it may deem proper and as the circumstances may require, attaching thereto such conditions as it may deem proper, consent to the entering into or the doing of the things herein provided, without approving the terms and conditions thereof, and thereupon it shall be lawful to do the things provided for in such order.

Moreover, when determining whether to grant consent and approval to a utility under this Code section, the Commission may hold a hearing "if its deems a hearing necessary", but is not required to hold a hearing. W.Va. Code Section 24-2-12, quoted in relevant part.

      The Commission concludes that neither legal notice nor a hearing is necessary in this case. Furthermore, because Hope Gas's financial condition was recently reviewed by the Commission in Case No. 98-0001-G-42T and because the Commission does not have jurisdiction over Dominion Resources Services, the Commission concludes that it is reasonable and appropriate to waive Hope Gas's obligation to demonstrate its financial condition or that of Dominion Resources Services.

      The Commission agrees with Staff's recommendation that consent and approval to enter into the proposed transaction should be granted as it is in the public interest. However, the Commission finds that such approval does not constitute approval of the terms and

conditions contained therein for the use of any cost allocations. Moreover, consent to enter into the proposed transaction does not constitute approval of the specific terms and conditions of the service agreement between Hope Gas and Dominion Resources Services.

FINDINGS OF FACT

      1. On September 28, 2000, Hope Gas, Inc., dba Dominion Hope (Hope Gas) filed a petition for consent and approval to enter into a service agreement for management, administrative, and other services with Dominion Resources Services, Inc. (Dominion Resources Services), an affiliate of Hope Gas. The new service agreement will supplant an agreement between Hope Gas, Dominion Resources Services and Consolidated Natural Gas Service Company, Inc. (CNG Services) which was approved by the Commission in an order entered on January 14, 2000, in Case No. 99-1552-G-PC. See Petition of Hope Gas, Inc. for Consent and Approval to Enter into a Contract for Services with an Affiliated Corporation filed September 28, 2000.

      2. Hope Gas and Dominion Resources Services are wholly owned subsidiaries of Dominion Resources, Inc. (Dominion). Id. at p. 1.

      3. CNG Services was formed in 1966, and Dominion Resources Services was formed by Dominion in anticipation of the merger between Dominion and Consolidated Natural Gas Company (CNG). Id. at p. 2.

      4. After the closing of the merger, which was approved by the Commission in an order dated July 27, 1999, in Case No. 99-0462-G-PC, Dominion and Consolidated Natural Gas Service Company, Inc. (CNG Services) entered into a service agreement. Id.

      5. To date, the merged Dominion/CNG systems have been operating with two service companies, Dominion Resources Services and CNG Services (both subsidiaries of Dominion). Id.

      6. The Securities and Exchange Commission entered an order directing that all service functions for the merged Dominion/CNG corporate entity be centralized and provided by a single company by March 31, 2001. Id.

      7. Counsel for Hope Gas explained that the basis of allocation in the existing service agreement was modified to reflect what services and groups will be in the combined services company. Additionally, Counsel for Hope Gas stated that certain wording changes will be made to the existing service agreement in order to update references, eliminate unnecessary detail, and clarify the mechanics of the methods of cost allocation. Id.

      8. Hope Gas requested a waiver of the requirement to produce information on its financial condition and on the financial condition of Dominion Resources Services. Id. at pp. 2-3.

      9. Hope Gas also requested that notice and hearing be waived. Id. at p. 3.

      10. Counsel for Hope Gas stated that the proposed agreement will have no adverse affect upon its natural gas service and that consent and approval should be granted since the proposed agreement (1) is fair and reasonable, (2) gives no party an advantage over the other and (3) is in the public interest. Hope Gas believes that the benefits derived from this agreement will enable it to conduct its public utility business more efficiently. Id. at 3.

      11. Commission Staff recommended that the Commission approve the agreement without hearing. Commission Staff stated that the order approving the agreement should clearly indicate that approval of the agreement does not constitute approval of the terms and conditions contained therein for the use of any cost allocations. Commission Staff further recommended that the Commission waive Hope Gas' obligation to demonstrate its financial condition or that of Dominion Resources Services. Initial and Final Joint Staff Memorandum filed November 2, 2000.

CONCLUSIONS OF LAW

      1. W.Va. Code Section 24-2-12 sets forth the requirements for approval of a utility's entering into an agreement with an affiliated corporation, person or interest for the provision of certain services.

      2. The Commission concludes that the proposed agreement is in the public interest and should be approved, without hearing and without requiring Hope Gas to demonstrate its financial condition or that of Dominion Resources Services. However, this approval does not constitute approval of the terms and conditions of the agreement nor does it constitute approval of the terms and conditions contained therein for the use of any cost allocations.

ORDER

      IT IS THEREFORE ORDERED that Hope Gas's petition for consent and approval to enter into a service agreement for management, administrative, and other services with Dominion Resources Services be approved; however, this approval does not constitute approval of the terms and conditions of the agreement nor does it constitute approval of the terms and conditions contained therein for the use of any cost allocations.

      IT IS FURTHER ORDERED that this case is resolved and shall be removed from the Commission's docket of active cases.

      IT IS FURTHER ORDERED that the Commission's Executive Secretary shall serve a copy of this order on all parties of record by First Class United States Mail, and upon Commission Staff by hand delivery.

EX-99.3

Exhibit H-8

DRS ALLOCATION MATRIX
Changes to Allocation Methods
Effective 1/1/2001
Service Department or Function	Current Allocation Method	New Allocation Method	Comments
Financial Accounting & Reporting	Number of financial related transactions, records and reports generated and account code combinations for the preceding year ended December 31st.	Total operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), and other purchased products and royalties, for the preceding year ended December 31st.	Given the differences in the businesses across our companies (gas, electricity, E&P, delivery,generation, etc.), there is no one "financial account combination" that would provide for fair allocation of accounting services.
Treasury	Total operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), and other purchased products and royalties, for the preceding year ended December 31st.	Total capitalization recorded at preceding December 31st.	New method is more closely tied to the cost drivers of the service.
Cash Management	Number of customer payments processed during the preceding year ended December 31st.	Total capitalization recorded at preceding December 31st.	New method is more closely tied to the cost drivers of the service.
Security	Total operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), and other products and royalties, for the preceding year ended December 31st.	The number of employees as of the preceding December 31st.	New method is more closely tied to the cost drivers of the service.
Corporate Secretary/Investor Relations/Shareholder Activities	The weighted average of the previous three years of total service company billings for the prior three years ended December 31st.	Total operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), and other purchased products and royalties, for the preceding year ended December 31st.	The larger the segment, as indicated by its expenses, the more services it can be expected to consume, directly or indirectly.
Corporate Planning - Capital Budgets	Total investment in plant recorded at preceding December 31st.	Total capitalization recorded at preceding December 31st.	The corporate planning services have been combined. New method is more closely tied to the cost drivers of the combined service.
Corporate Planning - Operating & Maintenance Budgets	Total operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), and other purchased products and royalties, for the preceding year ended December 31st.	Total capitalization recorded at preceding December 31st.	The corporate planning services have been combined. New method is more closely tied to the cost drivers of the combined service.
Payroll	Number of employees on the previous December 31st or the number of payroll payments generated during the previous year ending December 31st,	Number of employees on the previous December 31st	New method is more closely tied to the cost drivers of the service.
Accounts Receivable Processing	N/A	Number of accounts receivable documents processed during the preceding year ended December 31st.	The processing of miscellaneous accounts receivable is a new function of the services company effective 1/1/2001.
Engineering - General Services	Gas pipeline and/or electric supply line footage as of the preceding year ended December 31st.	N/A	No allocation method required as this is no longer a service company function.
Engineering - Transmission and Storage Services	Total investment in storage and transmission plant as of the preceding year ended December 31st.	N/A	No allocation method required as this is no longer a service company function.
Electricity Supply	Electricity load purchased for each affiliate for the preceding year ended December 31st.	N/A	No allocation method required as this is no longer a service company function.
Regulated Fixed Assets	Regulated companies fixed assets added, retired or transferred during the preceding year ended December 31st.	Dominion companies fixed assets added, retired or transferred during the preceding year ended December 31st.	Changed to "Fixed Assets Accounting" and incorporates all companies, not just regulated companies, as fixed assets accounting for all companies is centralized in DRS..
Medical Services	Total operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), and other products and royalties, for the preceding year ended December 31st.	Number of employees on the previous December 31st	New method is more closely tied to the cost drivers of the service.
Marketing - Shared Projects	Annual marketing plan budget for the current year of allocation.	Annual marketing plan expenses for the preceding year ended December 31st.	New method is more closely tied to the cost drivers of the service.
Company Group Formulas:
All retail companies	Volume of gas and quantity of electricity sold at retail during the preceding year ended December 31st (converted to dollar value).	Specific allocator not considered necessary based on services provided by DRS.	If it becomes necessary to allocate to this group of companies, it will follow the "All Companies" method for the appropriate group of companies.
All production companies	Production plant budget for the current year of allocation.	Specific allocator not considered necessary based on services provided by DRS.	If it becomes necessary to allocate to this group of companies, it will follow the "All Companies" method for the appropriate group of companies.
Appalachian production companies	Gross investment in Appalachian production plant recorded at preceding December 31st.	Specific allocator not considered necessary based on services provided by DRS.	If it becomes necessary to allocate to this group of companies, it will follow the "All Companies" method for the appropriate group of companies.
All storage companies	Gross investment in storage plant, excluding non-current inventory, recorded at preceding December 31st.	Specific allocator not considered necessary based on services provided by DRS.	If it becomes necessary to allocate to this group of companies, it will follow the "All Companies" method for the appropriate group of companies.
All regulated companies	Total regulated companies' operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), other purchased products and royalties, for the preceding year ended December 31st.	See Comments	If it becomes necessary to allocate to this group of companies, it will follow the "All Companies" method for the appropriate group of companies.
All unregulated companies	Total unregulated companies' operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), other purchased products and royalties, for the preceding year ending December 31st.	See Comments	If it becomes necessary to allocate to this group of companies, it will follow the "All Companies" method for the appropriate group of companies.
All Dominion Companies (excluding DRS)	Total operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), and other purchased products and royalties, for the preceding year ended December 31st.	Total operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), other purchased products and royalties, for the preceding year ended December 31st for the affected Dominion companies.	Has been modified to encompass allocation to a specific group of companies.

EX-99.4

Exhibit K-3.1

DRS Services Agreement

     This DRS Services Agreement (this "Agreement") is entered into as of the ____ day of ___________, 2001, by and between ____________________________________, a ______________________________ (the "Company"), and DOMINION RESOURCES SERVICES, INC., a Virginia corporation, ("DRS"). DRS is sometimes referred to herein as "Service Company".

     WHEREAS, each of the Company and DRS is a direct or indirect wholly-owned subsidiary of Dominion Resources, Inc. ("Dominion"), a registered holding company subject to regulation as such by the Securities and Exchange Commission ("SEC") under the Public Utility Holding Company Act of 1935 ("1935 Act");

     WHEREAS, DRS has been formed for the purpose of providing administrative, management and other services to Dominion and its subsidiaries ("Dominion Companies") as a subsidiary service company under Rule 88 of the rules and regulations of the SEC for implementation of the 1935 Act, 17 C.F.R. Section 250.88;

     WHEREAS, the Company believes that it is in the interest of the Company to provide for an arrangement whereby the Company may, from time to time and at the option of the Company, agree to purchase such administrative, management and other services from DRS;

     NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

     I. SERVICES OFFERED. Exhibit I hereto lists and describes all of the services that are available from DRS. DRS hereby offers to supply those services to the Company. Such services are and will be provided to the Company only at the request of the Company.

     II. SERVICES SELECTED.

     A. Initial Selection of Services. Exhibit II lists the services the Company hereby agrees to receive from DRS.

     B. Annual Selection of Services. DRS shall send an annual service proposal form to the Company on or about December 1 listing services proposed for the coming calendar year. By December 31, the Company shall notify DRS of the services the Company has elected to receive from DRS during the following calendar year.

    III. PERSONNEL. The DRS will provide services by utilizing the services of such executives, accountants, financial advisers, technical advisers, attorneys, engineers, geologists and other persons as have the necessary qualifications.

     If necessary, DRS, after consultation with the Company, may also arrange for the services of nonaffiliated experts, consultants and attorneys in connection with the performance of any of the services supplied under this Agreement.

     IV. COMPENSATION AND ALLOCATION. As and to the extent required by law, DRS will provide such services at cost. Exhibit III hereof contains rules for determining and allocating costs for DRS.

     V. TERMINATION AND MODIFICATION.

     A. Modification of Services. The Company may modify its selection of services at any time during the calendar year by giving DRS written notice of the additional services it wishes to receive, and/or the services it no longer wishes to receive, from DRS. The requested modification in services shall take effect on the first day of the first calendar month beginning at least thirty (30) days after the Company sent written notice to DRS.

     B. Modification of Other Terms and Conditions. No other amendment, change or modification of this Agreement shall be valid, unless made in writing and signed by all parties hereto.

     C. Termination of this Agreement. The Company may terminate this Agreement by providing sixty (60) days advance written notice of such termination to DRS. DRS may terminate this Agreement by providing sixty (60) days advance written notice of such termination to the Company.

     This Agreement is subject to termination or modification at any time to the extent its performance may conflict with the provisions of the 1935 Act, or with any rule, regulation or order of the SEC adopted before or after the making of this Agreement. This Agreement shall be subject to the approval of any state commission or other state regulatory body whose approval is, by the laws of said state, a legal prerequisite to the execution and delivery or the performance of this Agreement.

     VI. NOTICE. Where written notice is required by this Agreement, said notice shall be deemed given when mailed by United States registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

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a. To the Company:

_________________________

_________________________

_________________________

b. To DRS:

Dominion Resources Services, Inc.
120 Tredegar Street
Richmond, VA 23219

     VII. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of Virginia, without regard to their conflict of laws provisions.

     VIII. ENTIRE AGREEMENT. This Agreement, together with its exhibits, constitutes the entire understanding and agreement of the parties with respect to its subject matter, and effective upon the execution of this Agreement by the respective parties hereof and thereto, any and all prior agreements, understandings or representations with respect to this subject matter are hereby terminated and cancelled in their entirety and are of no further force and effect.

     IX. WAIVER. No waiver by any party hereto of a breach of any provision of this Agreement shall constitute a waiver of any preceding or succeeding breach of the same or any other provision hereof.

     X. ASSIGNMENT. This Agreement shall inure to the benefit of and shall be binding upon the parties and their respective successors and assigns. No assignment of this Agreement or any party's rights, interests or obligations hereunder may be made without the other party's consent, which shall not be unreasonably withheld, delayed or conditioned; provided, however, that, subject to the requirements of applicable state and federal regulatory law, either party may assign its rights, interests or obligations under this Agreement to an affiliate as that term is defined in the 1935 Act, without the consent of the other party.

     XI. SEVERABILITY. If any provision or provisions of this Agreement shall be held to be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

     XII. EFFECTIVE DATE. This Agreement is effective as of __________________.

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above mentioned.

Company:

By _________________________________

Name:____________________________
Title:_____________________________

DRS:

By

Patricia A. Wilkerson
Vice President and Corporate Secretary

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EXHIBIT I

DESCRIPTION OF SERVICES OFFERED BY DRS
UNDER THIS DRS SERVICES AGREEMENT

     1. Accounting. Provide advice and assistance to Dominion Companies in accounting matters, including the development of accounting practices, procedures and controls, the maintenance of the general ledger and related subsidiary systems, the preparation and analysis of financial reports, and the processing of certain accounts such as accounts payable, accounts receivable, and payroll.

     2. Auditing. Periodically audit the accounting records and other records maintained by Dominion Companies and coordinate their examination, where applicable, with that of independent public accountants. The audit staff will report on their examination and submit recommendations, as appropriate, on improving methods of internal control and accounting procedures.

     3. Legal and Regulatory. Provide advice and assistance with respect to legal and regulatory issues as well as regulatory compliance, including 1935 Act authorizations and compliance and regulatory matters under other Federal and State laws.

     4. Information Technology, Electronic Transmission and Computer Services. Provide the organization and resources for the operation of an information technology function including the development, implementation and operation of a centralized data processing facility and the management of a telecommunications network. This function includes the central processing of computerized applications and support of individual applications in Dominion Companies. Develop, implement, and process those computerized applications for Dominion Companies that can be economically best accomplished on a centralized basis.

     5. Software Pooling. Accept from Dominion Companies ownership of and rights to use, assign, license or sub-license all software owned, acquired or developed by or for Dominion Companies which Dominion Companies can and do transfer or assign to it. Preserve and protect the rights to all such software to the extent reasonable and appropriate under the circumstances; license Dominion Companies, on a non-exclusive, no-charge or at-cost basis, to use all software which DRS has the right to sell, license or sub-license; and, at the relevant Dominion Companies' expense, permit Dominion Companies to enhance any such software and license others to use all such software and enhancements to the extent that DRS shall have the legal right to so permit.

     6. Employee Benefits/Pension Investment. Provide central accounting for employee benefit and pension plans of Dominion Companies. Advise and assist Dominion Companies in the administration of such plans and prepare and maintain records of employee and company accounts under the said plans, together with such statistical data and reports as are pertinent to the plans.

     7. Human Resources. Advise and assist Dominion Companies in the formulation and administration of human resources policies and programs relating to the relevant Dominion Companies' labor relations, personnel administration, training, wage and salary administration and safety.

     8. Operations. Advise and assist Dominion Companies in the study, planning, engineering and construction of energy plant facilities of each Dominion Company and of the Dominion Companies as a whole, and advise, assist and manage the planning, engineering (including maps and records) and construction operations of Dominion Companies. Develop long-range operational programs for all the Dominion Companies and advise and assist each such Dominion Company in the coordination of such programs with the programs of the other Dominion Companies.

     9. Executive and Administrative. Advise and assist Dominion Companies in the solution of major problems and in the formulation and execution of the general plans and policies of Dominion Companies. Advise and assist Dominion Companies as to operations, the issuance of securities, the preparation of filings arising out of or required by the various Federal and State securities, business, public utilities and corporation laws, the selection of executive and administrative personnel, the representation of Dominion Companies before regulatory bodies, proposals for capital expenditures, budgets, financing, acquisition and disposition of properties, expansion of business, rate structures, public relationships and other related matters.

     10. Business and Operations Services. Advise and assist Dominion Companies in all matters relating to operational capacity and the preparation and coordination of operating studies. Manage Dominion Companies' purchase, movement, transfer and accounting of fuel and gas volumes. Compile and communicate information relevant to company operation. Perform general business and operations support services, including business, plant and facilities operation, maintenance and management, travel, aviation, fleet and mail services.

     11. Exploration and Development. Advise and assist Dominion Companies in all geological and exploration matters including the acquisition and surrender of acreage and the development of underground storage facilities.

     12. Risk Management. Advise and assist Dominion Companies in securing requisite insurance, in the purchase and administration of all property, casualty and marine insurance, in the settlement of insured claims and in providing risk prevention advice.

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     13. Marketing. Plan, formulate and implement marketing programs, as well as provide associated marketing services to assist Dominion Companies with improving customer satisfaction, load retention and shaping, growth of energy sales and deliveries, energy conservation and efficiency. Assist Dominion Companies in carrying out policies and programs for the development of plant locations and of industrial, commercial and wholesale markets and assist with community redevelopment and rehabilitation programs.

     14. Medical. Direct and administer all medical and health activities of Dominion Companies. Provide systems of physical examination for employment and other purposes and direct and administer programs for the prevention of sickness.

     15. Corporate Planning. Advise and assist Dominion Companies in the study and planning of operations, budgets, economic forecasts, capital expenditures and special projects.

     16. Supply Chain. Advise and assist Dominion Companies in the procurement of real and personal property, materials, supplies and services, conduct purchase negotiations, prepare procurement agreements and administer programs of material control.

     17. Rates. Advise and assist Dominion Companies in the analysis of their rate structure in the formulation of rate policies, and in the negotiation of large contracts. Advise and assist Dominion Companies in proceedings before regulatory bodies involving the rates and operations of Dominion Companies and of other competitors where such rates and operations directly or indirectly affect Dominion Companies.

     18. Research. Investigate and conduct research into problems relating to production, utilization, testing, manufacture, transmission, storage and distribution of energy. Keep abreast of and evaluate for Dominion Companies all research developments and programs of significance affecting Dominion Companies and the energy industry, conduct research and development in promising areas and advise and assist in the solution of technical problems arising out of Dominion Companies' operations.

     19. Tax. Advise and assist Dominion Companies in the preparation of Federal and other tax returns, and generally advise Dominion Companies as to any problems involving taxes including the provision of due diligence in connection with acquisitions.

     20. Corporate Secretary. Provide all necessary functions required of a publicly held corporation. Coordinate information and activities among shareholders, the transfer agent, and Board of Directors. Provide direct services to security holders. Prepare and file required annual and interim reports to shareholders and the SEC. Conduct the annual meeting of shareholders and ensure proper maintenance of corporate records.

     21. Investor Relations. Provide fair and accurate analysis of Dominion and its operating subsidiaries and its outlook within the financial community. Enhance Dominion's position in the energy industry. Balance and diversify shareholder investment in Dominion through a wide range of activities. Provide feedback to Dominion and its operating subsidiaries regarding investor concerns, trading and ownerships. Hold periodic analysts meetings, and provide various operating data as requested or required by investors.

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     22. Environmental Compliance. Provide consulting, cleanup, and other activities as required by Dominion Companies to ensure full compliance with applicable environmental statutes and regulations.

     23. Customer Services. Provide services and systems dedicated to customer service, including billing, remittance, credit, collections, customer relations, call centers, energy conservation support and metering.

     24. Energy Marketing. Provide services and systems dedicated to energy marketing, including marketing and trading of energy commodities, and energy price risk management and development of marketing and sales programs in physical and financial markets.

     25. Treasury/Finance. Provide services related to managing all administrative activities associated with financing, including management of capital structure; cash, credit and risk management activities; investment and commercial banking relationships; oversight of decommissioning trust funds and general financing activities.

     26. External Affairs. Provide services in support of corporate strategies for managing relationships with federal, state and local governments, agencies and legislative bodies. Formulate and assist with public relations, advertising, and external/internal communications programs and with the administration of corporate contribution and community affairs programs.

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EXHIBIT II

SERVICES THE COMPANY AGREES TO RECEIVE FROM DRS

SERVICE		YES	NO
1.	Accounting
2.	Auditing
3.	Legal and Regulatory
4.	Information Technology, Electronic Transmission and Computer Services
5.	Software Pooling
6.	Employee Benefits/Pension Investment
7.	Human Resources
8.	Operations
9.	Executive and Administrative
10.	Business and Operations Services
11.	Exploration and Development
12.	Risk Management
13.	Marketing
14.	Medical
15.	Corporate Planning
16.	Supply Chain
17.	Rates
18.	Research
19.	Tax
20.	Corporate Secretary
21.	Investor Relations
22.	Environmental Compliance
23.	Customer Services
24.	Energy Marketing
25.	Treasury/Finance
26.	External Affairs

EXHIBIT III

METHODS OF ALLOCATION FOR DRS

DRS shall allocate costs among companies receiving service from it under this and similar service contracts using the following methods:

I The costs of rendering service by DRS will include all costs of doing business including interest on debt but excluding a return for the use of equity capital for which no charge will be made to Dominion Companies.

II A. DRS will maintain a separate record of the expenses of each department. The expenses of each department will include:

1. those expenses that are directly attributable to such department, and

2. an appropriate portion of those office and housekeeping expenses that are not directly attributable to a department but which are necessary to the operation of such department.

B. Expenses of the department will include salaries and wages of employees, rent and utilities, materials and supplies, depreciation, and all other expenses attributable to the department. The expenses of a department will not include:

1. those incremental out-of-pocket expenses that are incurred for the direct benefit and convenience of an individual Dominion Company or group of Dominion Companies,

2. DRS overhead expenses that are attributable to maintaining the corporate existence of DRS, and all other incidental overhead expenses including those auditing fees, internal auditing department expenses and accounting department expenses attributable to DRS.

C. DRS will establish annual budgets for controlling the expenses of each department and for determining estimated costs to be included in interim monthly billing.

III A. Employees in each department will be divided into two groups:

1. Group A will include those employees rendering service to Dominion Companies, and

2. Group B will include those office and general service employees, such as secretaries, file clerks and administrative assistants, who generally assist employees in Group A or render other housekeeping services and who are not engaged directly in rendering service to each Dominion Company or a group of Dominion Companies.

B. Expenses set forth in Section II. above will be separated to show:

1. salaries and wages of Group A employees, and

2. all other expenses of the department.

C. There will be attributed to each dollar of a Group A employee's salary or wage, that percentage of all other expenses of such employee's department (as defined in B above), that such employee's salary or wage is to the total Group A salaries and wages of that department.

D. Group A employees in each department will maintain a record of the time they are employed in rendering service to each Dominion Company or group of Dominion Companies. An hourly rate will be determined by dividing the total expense attributable to a Group A employee as determined under subsection C above by the productive hours reported by such employee.

IV The charge to the Dominion Company for a particular service will be determined by multiplying the hours reported by Group A employees in rendering such service to each Dominion Company by the hourly rates applicable to such employees. When such employees render service to a group of Dominion Companies, the charge to each Dominion Company will be determined by multiplying the hours attributable to the Dominion Company under the allocation formulas set forth in Section IX of this Exhibit by the hourly rates applicable to such employees.

V To the extent appropriate and practical, the foregoing computations of hourly rates and charges may be determined for groups of employees within reasonable salary range limits.

VI Those expenses of DRS that are not included in the annual expense of a department under Section II. above will be charged to Dominion Companies receiving service as follows:

A. Incremental out-of-pocket costs incurred for the direct benefit and convenience of a Dominion Company or group of Dominion Companies will be charged directly to such Dominion Company or group of Dominion Companies. Such costs incurred for a group of Dominion Companies will be allocated on the basis of an appropriate formula.

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B. DRS overhead expenses referred to in Section II above will be charged to the Dominion Company either on the proportion of direct charges to that Dominion Company or under the allocation formulas set forth in Section IX of this Exhibit.

VII Notwithstanding the foregoing basis of determining cost allocations for billing purposes, cost allocations for certain services involving machine operations, production or service units, or facilities cost will be determined on an appropriate basis established by DRS.

VIII Monthly bills will be issued for the services rendered to the Dominion Company on an actual basis. However, if such actual information is not available at the time of preparation of the monthly bill, estimates may be used. Estimates will normally be predicated on service department budgets and estimated productive hours of employees for the year. At the end of each yearquarter, estimated figures will be revised and adjustments will be made in amounts billed to give effect to such revision.

IX When Group A employees render services to a group of Dominion Companies, the following formulas shall be used to allocate the time of such employees to the individual Dominion Companies receiving such service:

A. The Service Department or Function formulas to be used when employees render services to all Dominion Companies participating in such service, for the services indicated are set forth below.

Service Department or Function		Basis of Allocation
Accounting:
Payroll Processing		Number of employees on the previous December 31st.
Accounts Payable Processing		Number of accounts payable documents processed during the preceding year ended December 31st.
Fixed Assets Accounting		Dominion Company fixed assets added, retired or transferred during the preceding year ended December 31st.
Accounts Receivable Processing		Number of payments processed during the preceding year ended December 31st.
Information Technology, Electronic Transmission, and Computer Services:
LDC/EDC Computer Applications		Number of customers at the end of the preceding year ended December 31st.
Other Computer Applications		Number of users or usage of specific computer systems at the end of the preceding year ended December 31st.
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Service Department or Function		Basis of Allocation
Network Computer Applications		Number of network devices at the end of the preceding year ended December 31st.
Telecommunications Applications		Number of telecommunications units at the end of the preceding year ended December 31st
Employee Benefits/Pension Investment:
Employee Benefits/ Pension Investments		The number of employee and annuitant accounts as of the preceding December 31st.
Human Resources:
Human Resources		The number of employees as of the preceding December 31st.
Business and Operations Services:
Energy Services		Energy sale and deliveries for the preceding year ended December 31st.
Facility Services		Square footage of office space as of the preceding year ended December 31st.
Fleet Administration		Number of vehicles as of the preceding December 31st
Security		The number of employees as of the preceding December 31st.
Gas Supply		Gas volumes purchased for each Dominion Company for the preceding year ended December 31st.
Risk Management:
Risk Management		Insurance premiums for the preceding year ended December 31st.
Marketing:
Shared Projects		Annual marketing plan expenses for the preceding year ended December 31st.
Other Indirect Costs		Total marketing direct and shared project costs billed to each Dominion Company for the preceding year ended December 31st.
Medical:
Medical Services		Number of employees on the previous December 31st.

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Service Department or Function	Basis of Allocation
Corporate Planning:
Corporate Planning	Total capitalization recorded at preceding December 31st.
Supply Chain:
Purchasing	Dollar value of purchases for the preceding year ended December 31st.
Materials Management	Material inventory assets as of the preceding year ended December 31st.
Tax:
Tax Accounting and Compliance	The sum of the total income and total deductions as reported for Federal Income Tax purposes on the last return filed.
Customer Services:
Customer Payment (Remittance) Processing	Number of customer payments processed during the preceding year ended December 31st.
Other Customer Services	For metering, the number of gas or electric meters for the preceding year ended December 31st; otherwise the number of customers for the preceding year ended December 31st.
Treasury/ Finance:
Treasury and Cash Management	Total capitalization recorded at preceding December 31st.
Rates	Total regulated company operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), other purchased products and royalties, for the preceding year ended December 31st.
Research	Gross revenues from the sale of natural gas (including intercompany sales) and electricity, recorded during the preceding year ended December 31st.

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B. Company Group Formulas to be used in the absence of a service department or function formula or when service rendered by employees is for a different group of Dominion Companies than those companies regularly participating in such service:

Company Group	Basis of Allocation
All Dominion Companies (includes all Dominion Companies except DRS)	Total operating expenses, excluding purchased gas expense, purchased power expense (including fuel expense), other purchased products and royalties, for the preceding year ended December 31st for the affected Dominion Companies.

C. If the use of a basis of allocation would result in an inequity because of a change in operations or organization, then DRS may adjust the basis to effect an equitable distribution.

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EX-99.5

Exhibit K-3.2

REVISED VIRGINIA POWER SUPPORT AGREEMENT

THIS AGREEMENT is entered into as of the 1st day of January, 2001, by and between Virginia Electric and Power Company, a Virginia public service corporation ("Virginia Power") and Dominion Resources Services, Inc., a Virginia corporation ("DRS").

WHEREAS, Virginia Power is an electric utility engaged in the sale of electric service at retail within its service territories in Virginia and at wholesale within those territories and elsewhere in the United States;

WHEREAS, DRS is a wholly owned subsidiary of Dominion Resources, Inc. ("Dominion"), a registered holding company subject to regulation as such by the Securities and Exchange Commission ("SEC") under the Public Utility Holding Company Act of 1935 ("1935 Act");

WHEREAS, DRS was formed to provide centralized services to Dominion and its subsidiaries ("Dominion Companies") as a subsidiary service company under Rule 88 of the SEC's rules and regulations for implementation of the 1935 Act, 17 C. F. R. Section 250.88;

WHEREAS, DRS is an "affiliated interest" of Virginia Power within the meaning of the Utility Affiliates Act, Chapter 4 of Title 56 of the Code of Virginia, and therefore contracts and arrangements for the furnishing of services by Virginia Power to DRS are subject to approval of the SCC;

WHEREAS, by its Order Approving, in part, and Denying, In Part, Petitioners' Requests, issued December 29, 1999 in Case No. PUA990068, the Virginia State Corporation Commission ("SCC") approved under the Affiliates Act, subject to certain conditions, the Virginia Power Support Agreement under which Virginia Power agreed to provide certain services to DRS in an effort to promote efficiencies and effectively utilize resources and expertise and to thereby facilitate the provision by DRS of centralized services to the Dominion Companies ("Original Support Agreement");

WHEREAS, DRS is an affiliate of Virginia Power and therefore certain types of contracts between DRS and Virginia Power are subject to the requirements of North Carolina G. S. 62-153;

WHEREAS, by its Order on Affiliated Contracts issued January 27, 2000 in Docket No. E-22, Sub 385, the North Carolina Utilities Commission ("NCUC") approved the Original Support Agreement under North Carolina G.S. 62-153, subject to certain conditions;

WHEREAS, by its Order Authorizing Acquisition of Public Utility Companies and Related Transactions, Approving Service company Arrangements, and Reserving Jurisdiction issued December 15, 1999, SEC Release No. 3-27113; 70-9477, the SEC approved the formation of and proposed operation of DRS, including its performance under Original Service Agreement; and

WHEREAS, DRS and Virginia Power wish to replace the Original Support Agreement with this revised agreement which will reduce the number of services provided by Virginia Power to DRS and make certain other changes designed to simplify and clarify the methods for allocation of costs by Virginia Power.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. General Services to be Provided by Virginia Power. Exhibit A hereto lists and describes all of the services that may be provided by Virginia Power to DRS for the benefit of DRS and/or the existing or future subsidiaries or affiliates of Dominion. Such services are and will be provided to DRS only on the mutual agreement of Virginia Power and DRS and in accordance with the terms and conditions set forth herein.
2. Compensation and Allocation. Virginia Power and DRS recognize the importance of DRS paying the appropriate compensation for the services provided hereunder, so that there is no subsidization of either party by the other. To that end, Virginia Power will maintain accurate records of its operations that will enable it to determine the costs of the services that it provides to DRS, and those books and records will be open to examination by any state or federal commission having jurisdiction over arrangements and services to be furnished, and the staffs of those commissions. DRS will compensate Virginia Power for the services provided hereunder by payment of the costs incurred to provide those services. Exhibit B hereto contains rules for determining and allocating costs for services provided to DRS by Virginia Power.
3. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without regard to their conflicts of law provisions.
4. Entire Agreement. This Agreement, together with its exhibits, constitutes the entire understanding and agreement of the parties with respect to its subject matter, and effective upon the execution of this Agreement by the respective parties hereof, any and all prior agreements, understanding, or representations with respect to this subject matter are hereby terminated and cancelled in their entirety.
5. Waiver. No waiver by any party hereto of a breach of any provision of this Agreement shall constitute a waiver of any preceding or succeeding breach of the same or any other provision hereof.
6. Non - Exclusive Rights and Obligations. Nothing herein shall be construed to require DRS to obtain any of the services enumerated herein from Virginia Power, nor to require Virginia Power to provide any of such services to DRS.

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7. Effective Date and Term. This Agreement shall become effective January 1, 2001 and it shall continue in effect until terminated by either Virginia Power or DRS giving the other sixty (60) days advance written notice of termination.

 This Agreement is subject to termination or modification at any time to the extent its performance may conflict with the provisions of the 1935 Act, as amended or with any rule, regulation or order of the SEC adopted before or after the making of this Agreement. This Agreement shall be subject to the approval of any state commission or other state regulatory body whose approval is, by the laws of such state, a legal prerequisite to the execution and delivery or the performance of this Agreement.

8. SCC Approval. Pursuant to the SCC's Order Approving Merger in Joint Petition of Dominion Resources, Inc. and Consolidated Natural Gas Company, For approval of agreement and plan of merger under Chapter 5 of Title 56 of the Code of Virginia, Case No. PUA990020, issued on September 17, 1999, Virginia Power shall have no obligation under this Agreement except to the extent the Commission has approved such obligation.
9. NCUC APPROVAL. Pursuant to the NCUC's Order Approving Merger In the Matter of Application by Dominion Resources, Inc., for Authorization under G.S. 62-111 to Engage in a Business Combination Transaction, Docket No. E-22, Sub 380, issued on October 18, 1999, Virginia:

(i) may not make or incur a charge under this Agreement except in accordance with North Carolina law and the rules, regulations and orders of the NCUC promulgated thereunder; and

(ii) may not seek to reflect in rates any cost incurred or revenue level earned under an agreement subject to the 1935 Act to the extent disallowed by the NCUC.

10. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of this 1st day of January, 2001.

Attest: Virginia Electric and Power Company

_________________________ By___________________________________

Attest: Dominion Resources Services, Inc.

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_________________________ By____________________________________

Thomas N. Chewning, Executive Vice President
and Chief Financial Officer

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EXHIBIT A

DESCRIPTION OF APPROVED SERVICES TO BE OFFERED BY
VIRGINIA ELECTRIC AND POWER COMPANY TO DOMINION RESOURCES
SERVICES, INC. UNDER THE REVISED VIRGINIA POWER SUPPORT AGREEMENT

1. Accounting. Provide advice and assistance in accounting matters, including the development of accounting practices, procedures and controls, the maintenance of the general ledger and related systems, the preparation and analysis of financial statement reports, and the processing of certain customer transactions.
2. Regulatory Provide advice and assistance with respect to regulatory issues as well as regulatory compliance under Federal and State laws.
3. Information Technology, Electronic Transmission and Computer Services. Assist with the operation of an information technology function including the development, implementation and operation of a centralized data processing facility and the management of a telecommunications network. This function includes the central processing of computerized applications and support of individual applications. Provide computer resource/network availability, including enterprise telecommunications infrastructure, mainframe and distributed computing hardware, operating systems, business systems and applications, internet, intranet and mail environments, software licenses and maintenance agreements.
4. Human Resources Advise and assist in the formulation and administration of employee relations policies and programs relating to labor relations, personnel administration, training, wage and salary administration and safety.
5. Operations. Advise and assist in the study, planning, engineering and construction of energy plant facilities. Assist in the development of long-range operational programs. Offer management, consulting and advisory/technical services with respect to the physical operation of energy plant facilities and the purchase, sale and transfer of affiliated companies.
6. Business and Operations Services. Advise and assist in all matters relating to operational capacity and the preparation and coordination of operating studies. Provide assistance with management of the purchase, sale, movement, transfer and accounting of fuel and gas volumes. Compile and communicate information relevant to operations. Perform general business and operations support services, including travel services, fleet, mail, plant and facilities operation, maintenance and management.
7. Marketing. Assist in the planning, formulation and implementation of marketing programs, as well as provide associated marketing services to assist with improving customer satisfaction, load retention and shaping, growth of energy sales and deliveries, energy conservation and efficiency. Assist in carrying out policies and programs for the development of plant locations and of industrial, commercial and wholesale markets and assist with community redevelopment and rehabilitation programs.


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8. Budgeting and Planning. Advise and assist in studying and planning in connection with operations, budgets, economic forecasts, rate structures, capital expenditures and special projects.
9. Purchasing. Advise and assist in the purchase of materials, supplies and services and the preparation and negotiation of purchasing agreements.
10. Rates. Advise and assist in the analysis of rate structures, the formulation of rate policies and the negotiation of large contracts. Provide consulting in connection with proceedings before regulatory bodies involving rates and operations.
11. Research. Investigate and conduct research into problems relating to production utilization, testing, manufacture, transmission, storage and distribution of energy. Evaluate and conduct research and development in promising areas and advise and assist in the solution of technical problems arising out of operations.
12. Customer Service. Provision of services and systems dedicated to customer service, including billing, remittance, credit, collections, customer relations, call centers, energy conservation support and metering.
13. Energy Marketing. Provide services and systems dedicated to energy marketing, including marketing and trading of gas and electric power, energy price risk management, and development of marketing and sales programs in physical and financial markets.
14. Office Space and Equipment. Leasing of land, buildings, furnishings and equipment, including computer hardware and software and transportation equipment.
15. External Affairs. Provide services in support of corporate strategies for managing relationships with federal, state and local governments, agencies and legislative bodies. Formulate and assist with public relations and communications programs and administration of corporate contribution and community affairs programs.

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EXHIBIT B

METHODS OF ALLOCATION FOR VIRGINIA POWER

Virginia Power shall allocate costs independently to DRS using the following methods:

1. The costs of rendering service by Virginia Power will include all costs of doing business including interest on debt and a return for the use of equity capital.
2. A. Virginia Power will maintain a separate record of the expenses of each department. The expenses of each department will include:

1. those expenses that are directly attributable to such department, and

2. an appropriate portion of those office and housekeeping expenses that are not directly attributable to a department but which are necessary to the operation of such department.

B. Expenses of the department will include salaries and wages of employees, materials and supplies, and all other expenses attributable to the department. The expenses of a department will not include:

1. those incremental out-of-pocket expenses that are incurred for the direct benefit and convenience of an individual company or group of companies,

2. Virginia Power overhead expenses that are attributable to maintaining the corporate existence of Virginia Power, and all other incidental overhead expenses including rent and utilities, depreciation, and those auditing fees, internal auditing department expenses and accounting department expenses attributable to Virginia Power.

C. Virginia Power will establish annual budgets for controlling the expenses of each department and for determining estimated costs to be included in interim monthly billing.

3. A. There will be attributed to the salary or wage of an employee who directly provides services to DRS, a percentage of all other expenses of such employee's department.

B. Employees who directly provide service to DRS will maintain a record of the time they are employed in rendering such service to DRS. An hourly rate will be determined by dividing the total salary or wage expense attributable to the employee by the productive hours reported by such employee.

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4. The charge to DRS for a particular service will be determined by multiplying the hours reported by employees in rendering such service to DRS by the hourly rates applicable to such employees.
5. To the extent appropriate and practical, the foregoing computations of hourly rates and charges may be determined for groups of employees within reasonable salary range limits.
6. Those expenses of Virginia Power that are not included in the annual expense of a department under Section II. above will be charged to DRS as follows:

A. Incremental out-of-pocket costs incurred for the direct benefit and convenience of DRS will be charged directly to DRS.

B. Virginia Power overhead expenses referred to in Section II. above will be charged to DRS in the proportion that the charges made to DRS for costs, other than those set forth in this Section VI, are to the total of all department costs as defined in Section II.

7. Notwithstanding the foregoing basis of determining cost allocations for billing purposes, cost allocations for certain services involving machine operations, production or service units, or facilities cost will be determined on an appropriate basis established by Virginia Power.
8. Monthly bills will be issued for the services rendered to DRS on an actual basis. However, if such actual information is not available at the time of preparation of the monthly bill, estimates may be used. Estimates will normally be predicated on service department budgets and estimated productive hours of employees for the year. At the end of each quarter, estimated figures will be revised and adjustments will be made in amounts billed to give effect to such revision.
9. If the use of a basis of allocation would result in an inequity because of a change in operations or organization, then Virginia Power may adjust the basis to effect an equitable distribution.

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