Dominion

To Our Stakeholders

We cannot solve 21st century energy and environmental challenges with a 20th century mindset.

Nor can we engage in wishful thinking and assume that the nation's current energy system – built over generations at great expense and effort – can be transformed quickly and easily without compromising the safety, reliability and affordability that society has come to expect.

The way we obtain, develop and use energy going forward is as vital a national issue as there is. Harmonizing society’s dual aspirations for economic growth, security and a rising standard of living with effective environmental protection is placing unprecedented pressure on business, government and the non-profit sector to collaborate on a sustainable energy strategy that reflects today’s economic and environmental priorities.

To succeed in this important endeavor, our nation will need effective public policies and stable regulatory structures that address a host of interdependent issues, including:

• Rising long-term energy demand and ways to moderate it;
• Access to and development of new supply sources, both conventional and alternative;
• Capital formation and investment to modernize aging energy infrastructure;
• Research and development of new carbon-reducing technologies; and
• A projected shortage of scientists and engineers – the people who drive innovation and productivity gains in our economy.

Values Drive Dominion's Sustainability Commitment

This is the broader context within which Dominion views its sustainability challenges.

We start with a legacy of public service and community involvement that goes back more than a century. That kind of longevity does not happen by accident. It results from patience, a long-term perspective and a values-based culture anchored in safety, ethical behavior, performance excellence and teamwork – what we like to call "One Dominion." These four core values anchor all of our citizenship and sustainability initiatives and inform everything we are and do as an organization.

Whenever I meet with employee groups, I always begin with a success story or achievement that illustrates one or more of our shared values in action.

For example, in 2011 the employees at one of our hydroelectric stations in North Carolina surpassed 40 years without a lost-time accident. That level of performance deserves special recognition. It demonstrates extraordinary attention to safety and teamwork – two of our core values – enduring qualities that are central to Dominion's culture, corporate character and long-term success.

2011 Performance and Progress

2011 proved to be a milestone year in our efforts to elevate Dominion's commitment to sustainability.

On the governance front, we created a formalized structure that includes a 12-member Executive Sustainability Council to provide strategic direction, set goals and monitor performance; a new Director of Sustainability to lead our program initiatives and to engage internal and external stakeholders; and a cross-functional Employee Sustainability Team to help implement programs, benchmark best practices and share information across the organization.

To encourage accountability, we set preliminary goals that correspond to our four sustainability focus areas:

• Investing in tomorrow’s energy technologies;
• Reducing our environmental footprint;
• Providing green opportunities for our customers and communities; and
• Engaging our employees and other stakeholders. 

These focus areas serve as the foundation of our sustainability strategy and the basis for further development going forward. We will measure performance against them and begin reporting our progress in the next edition of our Citizenship & Sustainability Report.

To broaden our commitment to transparency and disclosure, we added a number of new performance metrics of interest to our stakeholders, most notably in the environmental area. We also participated for the first time in the Carbon Disclosure Project's water resources survey to share information about our water use and risk management program. We will continue to refine our data collection, measurement and reporting processes as a means of advancing our accountability systems and sustainability commitment.

2012 Priorities

We have long encouraged our customers to be smart energy consumers and improve the energy efficiency of their homes and businesses. In 2012, we intend to be more rigorous about practicing what we preach. So we are taking steps to better understand and manage the energy footprint at company facilities.

We have also committed to transition our light-duty commercial vehicle fleet to a green fleet. In 2012, we intend to replace all of the sedans and sport utility vehicles whose leases expire with electric vehicles, hybrid models or other alternative-fuel vehicles where appropriate.

And we will continue to promote sustainable partnerships with governments, academia and NGOs that add value to our citizenship initiatives and our efforts to minimize the physical footprint of our operations.

I look forward to reporting on our progress in subsequent editions of this report. In the meantime, I invite you to review our 2011/2012 Citizenship & Sustainability Report and learn more about Dominion's economic, social and environmental performance and some of the many dedicated employees who make it all possible. Please send any comments or questions to sustainability@dom.com.

Thomas F. Farrell II
Chairman, President & CEO
July 2012