Investments

9 Months Ended

Sep. 30, 2011

Investments

Investments

Dominion

Equity and Debt Securities

Rabbi Trust Securities

Marketable equity and debt securities and cash equivalents held in Dominion’s rabbi trusts and classified as trading totaled $89 million and $93 million at September 30, 2011 and December 31, 2010, respectively. Net unrealized losses on trading securities totaled $5 million and $1 million for the three and nine months ended September 30, 2011, respectively. Net unrealized losses on trading securities totaled $1 million for the nine months ended September 30, 2010. Cost-method investments held in Dominion’s rabbi trusts totaled $17 million and $18 million at September 30, 2011 and December 31, 2010, respectively.

Decommissioning Trust Securities

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

	Amortized Cost		Total  Unrealized Gains(1)		Total  Unrealized Losses (1)				Fair Value
(millions)
September 30, 2011
Marketable equity securities
U.S.:
Large Cap	$	1,147	$	377	$	—			$	1,524
Other	36		4		—				40
Marketable debt securities:
Corporate bonds	294		18		(2		)		310
U.S. Treasury securities and agency debentures	460		24		(1		)		483
State and municipal	237		18		—				255
Other	29		1		(1		)		29
Cost method investments	113		—		—				113
Cash equivalents and other(2)	45		—		—				45
Total	$	2,361	$	442	$	(4	)	(3)	$	2,799
December 31, 2010
Marketable equity securities:
U.S.:
Large Cap	$	1,161	$	515	$	—			$	1,676
Other	39		11		—				50
Marketable debt securities:
Corporate bonds	310		18		(1		)		327
U.S. Treasury securities and agency debentures	380		12		(1		)		391
State and municipal	244		7		(4		)		247
Other	19		—		—				19
Cost method investments	108		—		—				108
Cash equivalents and other(2)	79		—		—				79
Total	$	2,340	$	563	$	(6	)	(3)	$	2,897

(1) Included in AOCI and the decommissioning trust regulatory liability.

(2) Includes pending purchases of securities of $23 million and $43 million at September 30, 2011 and December 31, 2010, respectively.

(3) The fair value of securities in an unrealized loss position was $158 million and $252 million at September 30, 2011 and December 31, 2010, respectively.

The fair value of Dominion’s marketable debt securities held in nuclear decommissioning trust funds at September 30, 2011 by contractual maturity is as follows:

	Amount
(millions)
Due in one year or less	$	93
Due after one year through five years	304
Due after five years through ten years	316
Due after ten years	364
Total	$	1,077

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
(millions)
Proceeds from sales	$	465	$	398	$	1,404	$	1,538
Realized gains(1)	23		16		55		89
Realized losses(1)	62		4		82		58

(1) Includes realized gains or losses recorded to the decommissioning trust regulatory liability.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
(millions)
Total other-than-temporary impairment losses(1)	$	54		$	4		$	69		$	52
Losses recorded to decommissioning trust regulatory liability	(16		)	(1		)	(22		)	(17		)
Losses recognized in other comprehensive income (before taxes)	(2		)	—			(3		)	(2		)
Net impairment losses recognized in earnings	$	36		$	3		$	44		$	33

(1) Amount includes other-than-temporary impairment losses for debt securities of $3 million and $1 million for the three months ended September 30, 2011 and 2010, respectively, and $5 million and $4 million for the nine months ended September 30, 2011 and 2010, respectively.

Virginia Power

Decommissioning Trust Securities

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

	Amortized Cost		Total  Unrealized Gains(1)		Total  Unrealized Losses(1)				Fair Value
(millions)
September 30, 2011
Marketable equity securities:
U.S.:
Large Cap	$	459	$	154	$	—			$	613
Other	18		2		—				20
Marketable debt securities:
Corporate bonds	180		10		(1		)		189
U.S. Treasury securities and agency debentures	189		7		—				196
State and municipal	93		7		—				100
Other	22		1		(1		)		22
Cost method investments	113		—		—				113
Cash equivalents and other(2)	32		—		—				32
Total	$	1,106	$	181	$	(2	)	(3)	$	1,285
December 31, 2010
Marketable equity securities
U.S.:
Large Cap	$	469	$	207	$	—			$	676
Other	20		5		—				25
Marketable debt securities:
Corporate bonds	205		10		—				215
U.S. Treasury securities and agency debentures	141		2		—				143
State and municipal	103		1		(2		)		102
Other	15		—		—				15
Cost method investments	108		—		—				108
Cash equivalents and other(2)	35		—		—				35
Total	$	1,096	$	225	$	(2	)	(3)	$	1,319

(1) Included in AOCI and the decommissioning trust regulatory liability.

(2) Includes pending purchases of securities of $14 million and $35 million at September 30, 2011 and December 31, 2010, respectively.

(3) The fair value of securities in an unrealized loss position was $101 million and $159 million at September 30, 2011 and December 31, 2010, respectively.

The fair value of Virginia Power’s debt securities at September 30, 2011, by contractual maturity is as follows:

	Amount
(millions)
Due in one year or less	$	11
Due after one year through five years	164
Due after five years through ten years	199
Due after ten years	133
Total	$	507

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
(millions)
Proceeds from sales	$	242	$	248	$	838	$	959
Realized gains(1)	10		6		21		43
Realized losses(1)	22		1		30		21

(1) Includes realized gains or losses recorded to the decommissioning trust regulatory liability.

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2011			2010			2011			2010
(millions)
Total other-than-temporary impairment losses(1)	$	19		$	2		$	26		$	21
Losses recorded to decommissioning trust regulatory liability	(16		)	(1		)	(22		)	(17		)
Net impairment losses recognized in earnings	$	3		$	1		$	4		$	4

(1) Amount includes other-than-temporary impairment losses for debt securities of $2 million and $1 million for the three months ended September 30, 2011 and 2010, respectively, and $4 million and $2 million for the nine months ended September 30, 2011 and 2010, respectively.