Dominion's Brayton Point Coal Plant Is Financially Unsustainable Despite Billion Dollar Investment In Upgrades Shows New Report

   Dominion's Brayton Point Coal Plant Is Financially Unsustainable Despite
 Billion Dollar Investment In Upgrades Shows New Report From Conservation Law
                                  Foundation

'Perfect Storm' of Conditions Suppressing Earnings Expected to Continue
Through 2020

PR Newswire

BOSTON, Feb. 28, 2013

BOSTON, Feb. 28, 2013 /PRNewswire/ --An independent analysis of the financial
performance of Dominion Resources' Brayton Point power plant in Somerset,
Massachusetts, released today by the Institute for Energy Economics and
Financial Analysis,projected a bleak future for the 50-year-old coal-fired
facility, the largest remaining coal plant in New England. The report, Dark
Days Ahead: Financial Factors CloudFuture Profitability at Dominion's Brayton
Point, found that the once profitable power plant's earnings before interest,
taxes, depreciation and amortization (EBITDA) are plummeting due to a perfect
storm of market conditions that are projected to continue at least through the
end of the decade. The report shows that those conditions make it unlikely
that Brayton Point will ever recoup its recent $1 billion investment in
upgrades to the facility, or return to profitability. The report was
commissioned by Conservation Law Foundation (CLF), which has been a regional
leader in shaping New England's transition away from coal toward a clean
energy future.

The authors will present their findings in a teleconference for press and
analysts at 11:00 AM EST today. Registration is required.

"Brayton Point is looking at losing money for the foreseeable future," said
David Schlissel, who co-authored the report with financial expert Tom
Sanzillo. "The market conditions have changed and are continuing to change for
old coal plants. There is nothing on the horizon that shows that this power
plant will be able to return to financial health; in fact, even the most
optimistic scenario shows that Brayton Point cannot produce earnings that
would cover its costs and produce a return for equity investors at any time
through 2020."

The report points to a set of changed conditions that together are putting
severe downward pressure on Brayton Point's earnings, which dropped from $345
million in 2009 to $24 million in 2012, a decrease of some 93 percent. The
report details the causes for the dive in earnings, most notably, the steep
decline in natural gas prices and related drops in wholesale energy market
prices and capacity prices.

The report provides two extremely conservative scenarios of future
performance: an "optimistic scenario," in which generation from Brayton Point
coal Units 1-3 is projected to rise to a 60% capacity factor through the years
2013-2020, and a "less optimistic" scenario, which assumes that the units'
generation will not exceed 40% for any year in the period. In 2012, Brayton
Point's Units 1-3 operated at an average 16% capacity factor. Thus, the
report says, earnings from those units could be much lower than projected.

In both scenarios, based on forward-looking conditions, the report shows that
it is unlikely that future energy market prices, ISO-NE capacity market
prices, plant generation and coal prices will lead to earnings high enough to
provide its owner with adequate recovery of capital or return on that
investment.

N. Jonathan Peress, VP and director of Conservation Law Foundation's Clean
Energy and Climate Change program,commented, "Brayton Point, like many other
old coal plants in New England and around the country, is at a tipping point.
Dominion and its shareholders need to decide whether to keep pumping money
into Brayton Point with little chance of a return, or to let it go. This
report provides compelling evidence for the Town of Somerset to begin planning
for Brayton Point's retirement, and a healthier future for that community in
all respects."

The Institute for Energy Economics and Financial Analysis (IEEFA) conducts
research and analyses on financial and economic issues related to energy and
the environment.

Conservation Law Foundation (CLF) protects New England's environment for the
benefit of all people. Using the law, science and the market, CLF creates
solutions that preserve natural resources, build healthy communities, and
sustain a vibrant economy region-wide. Founded in 1966, CLF is a nonprofit,
member-supported organization with offices in Maine, Massachusetts, New
Hampshire, Rhode Island and Vermont.

CONTACT:
Karen Wood, CLF, (617) 850-1722, kwood@clf.org

SOURCE Conservation Law Foundation

Website: http://www.clf.org