X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2005

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    X   No         

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Exchange Act). Yes   X   No       

At March 31, 2005, the latest practicable date for determination, 340,498,735 shares of common stock, without par value, of the registrant were outstanding.

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____________
The accompanying notes are an integral part of the Consolidated Financial Statements.

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____________
⁽¹⁾ The Consolidated Balance Sheet at December 31, 2004 has been derived from the audited Consolidated Financial Statements at that date.

The accompanying notes are an integral part of the Consolidated Financial Statements.

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____________

____________
The accompanying notes are an integral part of the Consolidated Financial Statements.

PAGE 7

Dominion Resources, Inc. (Dominion) is a holding company headquartered in Richmond, Virginia. Its principal subsidiaries are Virginia Electric and Power Company (Virginia Power), Consolidated Natural Gas Company (CNG) and Dominion Energy, Inc. (DEI). Dominion and CNG are registered public utility holding companies under the Public Utility Holding Company Act of 1935 (1935 Act).

Virginia Power is a regulated public utility that generates, transmits and distributes electricity within an area of approximately 30,000-square-miles in Virginia and northeastern North Carolina. Virginia Power serves approximately 2.3 million retail customer accounts, including governmental agencies and wholesale customers such as rural electric cooperatives, municipalities, power marketers and other utilities. Virginia Power has trading relationships beyond the geographic limits of its retail service territory and buys and sells natural gas, electricity and other energy-related commodities.

CNG operates in all phases of the natural gas business, explores for and produces gas and oil and provides a variety of energy marketing services. Its regulated gas distribution subsidiaries serve approximately 1.7 million residential, commercial and industrial gas sales and transportation customer accounts in Ohio, Pennsylvania and West Virginia and its nonregulated retail energy marketing businesses serve approximately 1.1 million residential and commercial customer accounts in the Northeast, Mid-Atlantic and Midwest. CNG operates an interstate gas transmission pipeline system in the Northeast, Mid-Atlantic and Midwest and a liquefied natural gas (LNG) import and storage facility in Maryland. Its producer services operations involve the aggregation of natural gas supply and related wholesale activities. CNG's exploration and production operations are located in several major gas and oil producing basins in the United States, both onshore and offshore.

DEI is involved in merchant generation, energy trading and marketing and natural gas and oil exploration and production.

Dominion has substantially exited the core operating businesses of Dominion Capital, Inc. (DCI) as required by the Securities and Exchange Commission (SEC) under the 1935 Act. Currently, Dominion is required to divest substantially all remaining DCI holdings by January 2006. DCI's primary business was financial services, including loan administration, commercial lending and residential mortgage lending.

Dominion manages its daily operations through four primary operating segments: Dominion Delivery, Dominion Energy, Dominion Generation and Dominion Exploration & Production. In addition, Dominion reports a Corporate and Other segment that includes Dominion's corporate, service company and other operations (including unallocated debt), corporate-wide enterprise commodity risk management and optimization services, DCI and the net impact of Dominion's discontinued telecommunications operations that were sold in May 2004. Assets remain wholly owned by its legal subsidiaries.

Note 2.    Significant Accounting Policies

As permitted by the rules and regulations of the SEC, the accompanying unaudited Consolidated Financial Statements contain certain condensed financial information and exclude certain footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (generally accepted accounting principles). These unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes in Dominion's Annual Report on Form 10-K for the year ended December 31, 2004.

In the opinion of Dominion's management, the accompanying unaudited Consolidated Financial Statements contain all adjustments, including normal recurring accruals, necessary to present fairly Dominion's financial position as of March 31, 2005, and its results of operations and cash flows for the three months ended March 31, 2005 and 2004.

PAGE 8

Dominion makes certain estimates and assumptions in preparing its Consolidated Financial Statements in accordance with generally accepted accounting principles. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates.

The accompanying unaudited Consolidated Financial Statements include, after eliminating intercompany transactions and balances, the accounts of Dominion and all majority-owned subsidiaries, and those variable interest entities (VIEs) where Dominion has been determined to be the primary beneficiary.

Dominion reports certain contracts and instruments at fair value in accordance with generally accepted accounting principles. Market pricing and indicative price information from external sources are used to measure fair value when available. In the absence of this information, Dominion estimates fair value based on near-term and historical price information and statistical methods. For individual contracts, the use of differing assumptions could have a material effect on the contract's estimated fair value. See Note 2 to the Consolidated Financial Statements in Dominion's Annual Report on Form 10-K for the year ended December 31, 2004 for a more detailed discussion of Dominion's estimation techniques.

The results of operations for the interim periods are not necessarily indicative of the results expected for the full year. Information for quarterly periods is affected by seasonal variations in sales, rate changes, electric fuel and energy purchases and purchased gas expenses and other factors.

Certain amounts in the 2004 Consolidated Financial Statements have been reclassified to conform to the 2005 presentation.

Dominion enters into buy/sell and related agreements as a means to reposition its offshore Gulf of Mexico crude oil production to more liquid marketing locations onshore. Dominion typically enters into either a single or a series of buy/sell transactions in which it sells its crude oil production at the offshore field delivery point and buys similar quantities at Cushing, Oklahoma for sale to third parties. Dominion is able to enhance profitability by selling to a wide array of refiners and/or trading companies at Cushing, one of the largest crude oil markets in the world, versus restricting sales to a limited number of refinery purchasers in the Gulf of Mexico. These transactions require physical delivery of the crude oil and the risks and rewards of ownership are evidenced by title transfer, assumption of environmental risk, transportation scheduling and counterparty nonperformance risk.

Under the primary guidance of Emerging Issues Task Force (EITF) Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, Dominion presents the sales and purchases related to its crude oil buy/sell arrangements on a gross basis in its Consolidated Statements of Income. The EITF is currently discussing Issue No. 04-13, Accounting for Purchases and Sales of Inventory with the Same Counterparty, which specifically focuses on purchase and sale transactions made pursuant to crude oil buy/sell arrangements. The EITF is evaluating whether these types of transactions should be presented net in the Consolidated Statements of Income. While resolution of this issue may affect the income statement presentation of these revenues and expenses, there would be no impact on Dominion's results of operations or cash flows. Amounts currently shown on a gross basis in Dominion's Consolidated Statements of Income that could be impacted by further EITF deliberations in this ar ea are summarized below.

PAGE 9

The following table illustrates the pro forma effect on net income and earnings per share (EPS) if Dominion had applied the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation:

SFAS 123R and SAB 107

In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (SAB 107) that provides additional guidance in applying the provisions of SFAS No. 123 (revised 2004), Share-Based Payment (SFAS No. 123R). SFAS No. 123R requires that compensation cost relating to share-based payment transactions be recognized in the financial statements based on the fair value of the equity or liability instruments issued. SFAS 123R covers a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. SAB 107 describes the SEC staff's expectations in determining the assumptions that underlie fair value estimates and discusses the interaction of SFAS No. 123R with certain existing SEC guidance. The provisions of SAB 107 will be applied upon adoption of SFAS 123R. In April 2005, the SEC announced that it would allow additional time to implement the requirements of SFAS 123R. As a result, SFAS 123R will become effective for Dominion's unvested awards outstanding as of January 1, 2006 as well as for awards granted, modified, repurchased or cancelled on or after that date. Compensation expense expected to be recognized for unvested stock options outstanding at adoption is not expected to be material and Dominion's accounting for restricted stock awards is not expected to change significantly under the new standard. Dominion is currently evaluating the financial statement impact of applying SFAS No. 123R to future grants of stock-based awards.

PAGE 10

In January 2005, Dominion completed the acquisition of three electric power generation facilities from USGen New England, Inc. (USGen) for $642 million in cash. The plants, collectively referred to as Dominion New England, include the 1,521-megawatt Brayton Point Station in Somerset, Massachusetts; the 743-megawatt Salem Harbor Station in Salem, Massachusetts; and the 426-megawatt Manchester Street Station in Providence, Rhode Island. The operations of Dominion New England are included in the Dominion Generation operating segment.

The purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of the acquisition. Dominion may make adjustments during 2005 to the initial purchase price allocation to reflect the receipt of additional information, including actuarial valuations and independent appraisals of property.

In February 2005, Dominion paid $42 million in cash and assumed $62 million of debt in connection with the termination of a long-term power purchase agreement and acquisition of the related generating facility used by Panda-Rosemary LP (Rosemary), a non-utility generator, to provide electricity to Dominion. The transaction is part of an ongoing program that seeks to achieve competitive cost structures at Dominion's utility generation business and is expected to reduce annual capacity payments by $21 million in 2005 and $18 million in years thereafter. The purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. In connection with the termination of the agreement, Dominion recorded a charge of $77 million ($47 million after-tax) in other operations and maintenance expense in the Consolidated Statement of Income.

In March 2005, Dominion received $424 million in cash for the sale of a fixed-term overriding royalty interest in certain of its natural gas reserves for the period March 2005 through February 2009. The sale reduced Dominion's proved natural gas reserves by approximately 76 billion cubic feet (bcf). While Dominion is obligated under the agreement to deliver to the purchaser its portion of future natural gas production from the properties, it retains control of the properties and rights to future development drilling. If production from the properties subject to the sale is inadequate to deliver the approximately 76 bcf of natural gas scheduled for delivery to the purchaser, Dominion has no obligation to make up the shortfall. Cash proceeds received from this VPP transaction were recorded as deferred revenue. Dominion will recognize revenue from the transaction as natural gas is produced and delivered to the purchaser. Dominion previously entered into VPP transactions in 2004 and 2003 f or approximately 83 bcf for the period May 2004 through April 2008 and 66 bcf for the period August 2003 through July 2007, respectively.

Note 7.     North Carolina Rate Matter

In April 2004, the North Carolina Utilities Commission (North Carolina Commission) commenced an investigation into Dominion's North Carolina base rates and subsequently ordered Dominion to file a general rate case to show cause why its North Carolina base rates should not be reduced. The rate case was filed in September 2004 and in March 2005, the North Carolina Commission approved a settlement reached by Dominion with parties in the case that included a prospective $12 million annual reduction in current base rates and a five-year base rate moratorium among the parties to the settlement. The North Carolina Commission approved Dominion's revised rate schedules and made the base rate reduction effective as of April 14, 2005.

The settlement provides for the specific recovery of certain costs incurred in prior years. As a result, Dominion established regulatory assets totaling $35 million representing the North Carolina portion of previously incurred costs associated with the termination of certain long-term power purchase agreements with non-utility generators and restoration costs incurred in 2003 due to Hurricane Isabel. This benefit was partially offset by a $1.8 million pre-tax charge for the write off of the North Carolina portion of previously deferred start-up and integration costs associated with joining a regional transmission organization (RTO) and the establishment of a $9 million regulatory liability related to the overrecovery of costs associated with a demand side management program. The net impact of all amounts recorded in the first quarter of 2005 related to the settlement was an after-tax benefit of $16 million.

PAGE 11

Dominion's operating revenue consists of the following:

Potentially dilutive securities with the right to purchase approximately 1.5 million and 3.6 million common shares for the three months ended March 31, 2005 and 2004, respectively, were not included in the respective period's calculation of diluted EPS because the exercise and purchase prices included in those instruments were greater than the average market price of the common shares.

 PAGE 12

The following table presents total comprehensive income (loss):

________________
⁽¹⁾ Primarily due to unfavorable changes in the fair value of certain commodity derivatives resulting from an increase in commodity prices. The increase in commodity prices resulted in an increase in the net derivative liability reported in Dominion's Consolidated Balance Sheet.
⁽²⁾ Primarily reflects unrealized gains and losses on investments held in decommissioning trusts.

Dominion is exposed to the impact of market fluctuations in the price of natural gas, electricity and other energy-related products marketed and purchased as well as currency exchange and interest rate risks of its business operations. Dominion uses derivative instruments to mitigate its exposure to these risks and designates derivative instruments as fair value or cash flow hedges for accounting purposes. Selected information about Dominion's hedge accounting activities follows:

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The following table presents selected information related to cash flow hedges included in accumulated other comprehensive income (loss) (AOCI) in the Consolidated Balance Sheet at March 31, 2005:

The amounts that will be reclassified from AOCI to earnings will generally be offset by the recognition of the hedged transactions (e.g., anticipated sales) in earnings, thereby achieving the realization of prices contemplated by the underlying risk management strategies and will vary from the expected amounts presented above as a result of changes in market prices, interest rates and foreign exchange rates.

As a result of a delay in reaching anticipated production levels in the Gulf of Mexico, Dominion discontinued hedge accounting for certain cash flow hedges related to forecasted oil production effective March 1, 2005. The discontinuance of hedge accounting for these contracts resulted in the following losses:

• $17 million ($11 million after-tax) reclassified from AOCI to earnings for contracts that settled in the three months ended March 31, 2005;
• $13 million ($8 million after-tax) reclassified from AOCI to earnings for contracts that will settle in future periods; and
• $19 million ($12 million after-tax) due to subsequent changes in the fair value of these contracts.

Note 12.     Ceiling Test

Dominion follows the full cost method of accounting for gas and oil exploration and production activities prescribed by the SEC. Under the full cost method, capitalized costs are subject to a quarterly ceiling test. Under the ceiling test, amounts capitalized are limited to the present value of estimated future net revenues to be derived from the anticipated production of proved gas and oil reserves, assuming period-end hedge-adjusted prices. Approximately 13% of Dominion's anticipated production is hedged by qualifying cash flow hedges, for which hedge-adjusted prices were used to calculate estimated future net revenue. Whether period-end market prices or hedge-adjusted prices were used for the portion of production that is hedged, there was no ceiling test impairment as of March 31, 2005.

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FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities, (FIN 46R) addresses consolidation of VIEs. An entity is considered a VIE under FIN 46R if it does not have sufficient equity for it to finance its activities without assistance from variable interest holders or if its equity investors lack any of the following characteristics of a controlling financial interest:

• control through voting rights,
• the obligation to absorb expected losses, or
• the right to receive expected residual returns.

FIN 46R requires the primary beneficiary of a VIE to consolidate the VIE and to disclose certain information about its significant variable interests. The primary beneficiary of a VIE is the entity that receives the majority of a VIE's expected losses, expected residual returns, or both.

As discussed in Note 5, in February 2005, Dominion paid $42 million in cash and assumed $62 million of debt to terminate a power purchase agreement and to acquire the related generating facility from a supplier entity that Dominion had determined to be a VIE and, in which, its power purchase agreement represents a significant variable interest. Prior to acquisition of the facility, Dominion determined that it is not the primary beneficiary. Dominion purchased $3 million and $6 million of electric generation capacity and $2 million of electric energy under this power purchase agreement in the three months ended March 31, 2005 and 2004, respectively.

In January 2005, Dominion entered into a long-term contract with a limited liability corporation (LLC) to purchase synthetic fuel produced from coal. Certain variable pricing terms in the contract protect the equity holder from expected losses, and therefore, the LLC was determined to be a variable interest entity. Dominion's only obligation under the contractual arrangement is to purchase the synthetic fuel that the LLC produces. After completing its FIN 46R analysis, Dominion concluded that although its interests in the contract, as a result of its pricing terms represented a significant variable interest in the LLC, Dominion is not the primary beneficiary. Dominion paid $22 million to the LLC for coal and synthetic fuel produced from coal in the three months ended March 31, 2005. Dominion is not subject to any risk of loss from the contractual arrangement, as the only obligation to the VIE is to purchase the synthetic fuel that the VIE produces according to the terms of the applicable purchase contract. < /P>

In accordance with FIN 46R, Dominion consolidates certain variable interest lessor entities through which Dominion has financed and leased several power generation projects, as well as its corporate headquarters and aircraft. The Consolidated Balance Sheets as of March 31, 2005 and December 31, 2004 reflect net property, plant and equipment of $964 million and $963 million, respectively, and $1.1 billion of debt related to these entities. The debt is nonrecourse to Dominion and is secured by the entities' property, plant and equipment.

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The acquisition of Dominion New England included certain emission allowances, which are considered to be intangible assets. Approximately $300 million of the purchase price was allocated to these allowances. The components of intangible assets are as follows:

_____________________
⁽¹⁾ At March 31, 2005, $69 million of net intangible assets were included in other current assets and $702 million were included in other assets on the Consolidated Balance Sheet.

All of Dominion's intangible assets, other than goodwill, are subject to amortization. Amortization expense for intangible assets was $30 million and $16 million for the three months ended March 31, 2005 and 2004, respectively. Annual amortization expense for intangible assets is estimated to be $109 million for 2005, $107 million for 2006, $95 million for 2007, $73 million for 2008 and $61 million for 2009.

Dominion, Virginia Power and CNG (collectively the Dominion Companies) use short-term debt, primarily commercial paper, to fund working capital requirements, as a bridge to long-term debt financing and as bridge financing for acquisitions, if applicable. The levels of borrowing may vary significantly during the course of the year, depending upon the timing and amount of cash requirements not satisfied by cash from operations. At March 31, 2005, the Dominion Companies had committed lines of credit totaling $3.75 billion. Although there were no loans outstanding, these lines of credit support commercial paper borrowings and letter of credit issuances. At March 31, 2005, the Dominion Companies had the following commercial paper and letters of credit outstanding and capacity available under credit facilities:

PAGE 16

Long-Term Debt

In February 2005, in connection with the acquisition of a non-utility generating facility from Rosemary, Virginia Power assumed $62 million of Rosemary's 8.625% senior notes that mature in 2016. In addition, in February and April of 2005, Virginia Power issued $2 million and $6 million, respectively, of 7.25% promissory notes, which mature in 2025 and 2032, respectively, in exchange for electric distribution facilities at certain military bases in connection with their privatization.

Dominion Resources, Inc. and its subsidiaries repaid $462 million of long-term debt during the three months ended March 31, 2005.

The new notes have been included in the diluted EPS calculation using the method described in EITF 04-8. Under this method, the number of shares included in the denominator of the diluted EPS calculation is calculated as the net shares issuable for the reporting period based upon the average market price for the period. This did not result in an increase to the average shares outstanding used in the calculation of Dominion's diluted EPS since the conversion price of $73.60 included in the notes was higher than the average market price of Dominion's common stock over this period.

Issuance of Common Stock

In the three months ended March 31, 2005, Dominion received proceeds of $216 million for 3.6 million shares issued through Dominion Direct® (a dividend reinvestment and open enrollment direct stock purchase plan), employee savings plans and the exercise of employee stock options. In February 2005, Dominion Direct® and the Dominion employee savings plans began purchasing Dominion common stock on the open market with the proceeds received through these two programs, rather than having additional new common shares issued.

In February 2005, Dominion was authorized by its Board of Directors to repurchase up to the lesser of 25 million shares or $2.0 billion of Dominion's outstanding common stock. In March 2005, Dominion repurchased 3.3 million shares for approximately $247 million. Of this amount, 2.9 million shares totaling $219 million were repurchased through an accelerated repurchase agreement with Lehman Brothers Holdings, Inc. (Lehman). Under the agreement, Lehman immediately borrowed shares that were sold to and canceled by Dominion and in turn purchased shares in the open market over a subsequent time period. The agreement was subject to a future contingent purchase price adjustment based on the actual cost of the shares purchased by Lehman. At March 31, 2005, Lehman had repurchased 100% of the shares under the agreement for $216 million. In April 2005, Lehman paid Dominion $2.8 million in cash to settle the transaction. Dominion will record the settlement payment as an addition to common shar eholders' equity in its Consolidated Balance Sheet.

PAGE 17

As described in Note 19 to the Consolidated Financial Statements in Dominion's Annual Report on Form 10-K for the year ended December 31, 2004, Dominion entered into a forward equity sale agreement (forward agreement) with Merrill Lynch International (MLI), as forward purchaser, relating to 10 million shares of Dominion's common stock. The forward agreement provides for the sale of two tranches consisting of 2 million and 8 million shares of Dominion common stock, respectively, each with stated maturity dates and settlement prices.

Dominion elected to cash settle the first tranche in December 2004 and made a payment to MLI for $5.8 million, representing the difference between Dominion's share price and the applicable forward sale price, multiplied by the 2 million shares. Additionally, Dominion elected to cash settle 3 million shares of the second tranche in February 2005 and made a payment to MLI for $17.4 million. Dominion recorded the settlement payments as reductions to common stock in its Consolidated Balance Sheets.

As a result of an extension agreement entered into in April 2005, the remaining 5 million shares of the second tranche must be settled by August 26, 2005. If gross share settlement were elected for the remainder of the second tranche at its maturity date, Dominion would receive aggregate proceeds of approximately $321 million and would deliver 5 million of its common shares. In the event any or all of the proceeds are not needed, Dominion has the option to either cash settle or net share settle the remainder of the second tranche of the forward agreement in whole, or in part, and may elect settlement earlier than the stated maturity date. If Dominion elects to cash or net share settle any portion of the remainder of the second tranche, the payment is based on the difference between Dominion's share price and the applicable forward sale price for the second tranche, multiplied by the number of shares being settled.

If, at March 31, 2005, Dominion had elected a cash settlement of the 5 million shares remaining in the second tranche, Dominion would have owed MLI $52.7 million, which would have been recorded as a reduction to common stock in Dominion's Consolidated Balance Sheet. If, at the time of cash settlement, Dominion's current share price were lower than the forward sale price, Dominion would receive a payment from MLI. For every dollar increase (decrease) in the value of Dominion's stock, the value of the settlement of the shares remaining in the second tranche from MLI's perspective would increase (decrease) by $5 million.

Income Taxes

As a matter of course, Dominion is regularly audited by federal and state tax authorities. Dominion establishes liabilities for probable tax-related contingencies in accordance with SFAS No. 5, Accounting for Contingent Liabilities, and reviews them in light of changing facts and circumstances. Although the results of these audits are uncertain, Dominion believes that the ultimate outcome will not have a material adverse effect on Dominion's financial position. At March 31, 2005 and December 31, 2004, Dominion's Consolidated Balance Sheets reflect $121 million and $54 million, respectively, of tax-related contingent liabilities, including accrued interest.

PAGE 18

In March 2005 and December 2004, Dominion recorded after-tax charges of $6 million and $112 million, respectively, related to its interest in a long-term power tolling contract with a 551 megawatt combined cycle facility located in Batesville, Mississippi. Dominion decided to divest its interest in the long-term power tolling contract in connection with its reconsideration of the scope of certain activities of the Dominion Clearinghouse (Clearinghouse), including those conducted on behalf of Dominion's business segments, and its ongoing strategy to focus on business activities within the Mid-America Interconnected Network (MAIN) to Maine region. The charges are based on Dominion's evaluation of bids received from third parties reflecting the expected amount of consideration that would be required by a third party for its assumption of Dominion's interest in the contract.

In April 2005, Dominion entered into a purchase and sale agreement with a third party that will result in the assignment and assumption of the long-term power tolling contract. The transaction is expected to close in the second quarter of 2005, subject to approval of the various affected parties.

As of March 31, 2005, Dominion and its subsidiaries had issued $7.2 billion of guarantees, including:

• $3.8 billion to support commodity transactions of subsidiaries;
• $1.5 billion for subsidiary debt reflected on the Consolidated Balance Sheet;
• $898 million related to a subsidiary leasing obligation for the Fairless Energy power station (Fairless);
• $509 million related to subsidiaries' nuclear obligations;
• $443 million for guarantees supporting other agreements of subsidiaries; and
• $31 million for guarantees supporting third parties and equity method investees.

The commodity transaction guarantees are put in place to allow Dominion's subsidiaries the flexibility to conduct business with counterparties without having to post substantial cash collateral. In order for Dominion to experience a liability for the $3.8 billion capacity of the guarantees, Dominion would have to fully utilize credit with every counterparty it has issued a guarantee, which management believes would be highly unlikely to occur. As of March 31, 2005, Dominion had entered into transactions with counterparties, whereby the net exposure under the guarantees related to these transactions was $635 million, which is included in the $732 million net amount due to these counterparties reported on Dominion's Consolidated Balance Sheet at March 31, 2005.

There are no significant liabilities reflected on Dominion's Consolidated Balance Sheets for its subsidiaries' power generation project leasing obligation, nuclear obligations or other miscellaneous obligations.

While the majority of these guarantees do not have a termination date, Dominion may choose at any time to limit the applicability of such guarantees to future transactions.

PAGE 19

In connection with Dominion's ongoing efforts to divest its remaining financial services investments, Dominion executed certain agreements in the fourth quarter of 2003 that resulted in the sale of certain DCI assets to a new collateralized debt obligation (CDO) structure. In the first quarter of 2005, the CDO structure was recapitalized under the direction of the CDO structure's management. In connection with the CDO recapitalization, Dominion exchanged $250 million of 3% paid-in kind (PIK) CDO notes for two new notes: a $100 million 7.5% current pay tranche and a $150 million 3% PIK tranche. Also, upon executing the exchange, Dominion's obligation to fund up to $55 million through 2007 for certain outstanding revolving loan commitments was cancelled and Dominion's commitment under a liquidity facility with the CDO structure was reduced from $30 million to $15 million.

The following table presents selected information related to Dominion's discontinued telecommunications operations:

In May 2004, Dominion completed the sale of its discontinued telecommunications operations to Elantic Telecom, Inc (ETI). In July 2004, ETI filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division. In April 2005, ETI's plan of reorganization to exit the Chapter 11 bankruptcy process was confirmed by the court. Dominion does not expect a material impact on its results of operations or financial position related to the bankruptcy. At March 31, 2005, Dominion has $9 million of remaining guarantees related to its discontinued telecommunications operations.

PAGE 20

The following table illustrates the components of the provision for net periodic benefit cost for Dominion's pension and other postretirement benefit plans:

During the fourth quarter of 2004, Dominion performed an evaluation of its Clearinghouse trading and marketing operations, which resulted in a decision to exit certain energy trading activities and instead focus on the optimization of company assets. The financial impact of the Clearinghouse's optimization of company assets is now reported as part of the results of the business segments operating the related assets, in order to better reflect the performance of the underlying assets. As such, Clearinghouse activities such as fuel management, hedging, selling the output of, contracting and optimizing the Dominion Generation assets are reported in the Dominion Generation segment. Clearinghouse activities related to corporate-wide enterprise commodity risk management and optimization services that are not focused on any particular business segment are reported in the Corporate and Other segment. Aggregation of gas supply and associated gas trading and marketing activities performed by the Clearinghouse, as well as the prior year results of certain energy trading activities exited in connection with the reorganization continue to be reported in the Dominion Energy segment.

Additionally, in January 2005 in connection with the reorganization, commodity derivative contracts held by the Clearinghouse were assessed to determine if they contribute to the optimization of Dominion's assets. As a result of this review, certain commodity derivative contracts previously designated as held for trading purposes are now held for non-trading purposes. Under Dominion's derivative income statement classification policy described in Note 2 to the Consolidated Financial Statements in Dominion's Annual Report on Form 10-K for the year ended December 31, 2004, all changes in fair value, including amounts realized upon settlement, related to the reclassified contracts were previously presented in operating revenue on a net basis. Upon reclassification as non-trading, all unrealized changes in fair value and settlements related to those derivative contracts that are financially settled are now reported in other operations and maintenance expense. The statement of income related amounts for those rec lassified derivative sales contracts that are physically settled are now presented in operating revenue, while the statement of income related amounts for physically settled purchase contracts are reported in operating expenses.

Dominion is organized primarily on the basis of products and services sold in the United States. Dominion manages its operations through the following operating segments:

Dominion Delivery includes Dominion's regulated electric and gas distribution and customer service business, as well as nonregulated retail energy marketing operations.

PAGE 21

Dominion Energy includes Dominion's tariff-based electric transmission, natural gas transmission pipeline and storage businesses and an LNG facility. It also includes certain natural gas production and producer services, which consist of aggregation of gas supply, market-based services related to gas transportation and storage and associated gas trading and the prior year's results of certain energy trading activities exited in December 2004.

Dominion Generation includes the generation operations of Dominion's electric utility and merchant fleet as well as energy trading and marketing activities associated with the optimization of generation assets.

Dominion Exploration & Production (E&P) includes Dominion's gas and oil exploration, development and production operations. Operations are located in several major producing basins in the lower 48 states, including the outer continental shelf and deepwater areas of the Gulf of Mexico, and Western Canada.

Corporate and Other includes the operations of Dominion's corporate, service company and other operations (including unallocated debt), corporate-wide enterprise commodity risk management and optimization services, DCI and the net impact of Dominion's discontinued telecommunications operations that were sold in May 2004. In addition, the contribution to net income by Dominion's primary operating segments is determined based upon a measure of profit that executive management believes represents the segments' core earnings. As a result, certain specific items attributable to those segments are not included in profit measures evaluated by executive management in assessing the segment's performance or allocating resources among the segments. These specific items are instead reported in the Corporate and Other segment and include:

Three Months Ended March 31, 2005

• Charges reflecting Dominion's valuation of its interest in a long-term power tolling contract and the termination of a long-term power purchase agreement.

• A benefit from the reduction of accrued expenses associated with Hurricane Isabel restoration activities; and
• A charge related to the settlement of a class action lawsuit involving a dispute over Dominion's rights to lease fiber-optic cable along a portion of its electric transmission corridor.

Intersegment sales and transfers are based on underlying contractual arrangements and agreements and may result in intersegment profit or loss.

PAGE 22

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) discusses the results of operations and general financial condition of Dominion. MD&A should be read in conjunction with the Consolidated Financial Statements. The term "Dominion" is used throughout MD&A and, depending on the context of its use, may represent any of the following: the legal entity, Dominion Resources, Inc., one of Dominion Resources, Inc.'s consolidated subsidiaries, or the entirety of Dominion Resources, Inc. and its consolidated subsidiaries.

The reader will find the following information in this MD&A:

• Forward-Looking Statements
• Accounting Matters
• Results of Operations
• Segment Results of Operations
• Selected Information - Energy Trading Activities
• Sources and Uses of Cash
• Future Issues and Other Matters
• Risk Factors and Cautionary Statements That May Affect Future Results

Dominion makes forward-looking statements with full knowledge that risks and uncertainties exist that may cause actual results to differ materially from predicted results. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves. Additionally, other risks that may cause actual results to differ from predicted results are set forth in Risk Factors and Cautionary Statements That May Affect Future Results.

Dominion bases its forward-looking statements on management's beliefs and assumptions using information available at the time the statements are made. Dominion cautions the reader not to place undue reliance on its forward-looking statements because the assumptions, beliefs, expectations and projections about future events may, and often do, differ materially from actual results. Dominion undertakes no obligation to update any forward-looking statement to reflect developments occurring after the statement is made.

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As of March 31, 2005, there have been no significant changes with regard to the critical accounting policies and estimates disclosed in MD&A in Dominion's Annual Report on Form 10-K for the year ended December 31, 2004. The policies disclosed included the accounting for: derivative contracts at fair value; goodwill and long-lived asset impairment testing; asset retirement obligations; employee benefit plans; regulated operations; gas and oil operations; and income taxes.

Other

As discussed in Note 2 to the Consolidated Financial Statements, Dominion enters into buy/sell and related agreements as a means to reposition its offshore Gulf of Mexico crude oil production to more liquid marketing locations onshore. Under the primary guidance of EITF Issue No. 99-19, Dominion presents the sales and purchases related to its crude oil buy/sell arrangements on a gross basis in its Consolidated Statements of Income. The EITF is currently discussing Issue No. 04-13, which specifically focuses on purchase and sale transactions made pursuant to crude oil buy/sell arrangements. The EITF is evaluating whether these types of transactions should be presented net in the Consolidated Statements of Income. While resolution of this issue may affect the income statement presentation of these revenues and expenses, there would be no impact on Dominion's results of operations or cash flows. The portion of Dominion's operating revenue related to buy/sell activity for the first quarter of 2005 was approximately 2%. Reported production volumes are not impacted, as only the initial sale of Dominion's production is included in reported production volumes. It is estimated that approximately 48% of Dominion's first quarter 2005 oil production was marketed through the use of one or more crude oil buy/sell agreements.

Results of Operations

Following is a summary of contributions by operating segments to net income for the first quarter ended March 31, 2005 and 2004:

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The combined first quarter net income contribution of Dominion's primary operating segments increased $32 million primarily due to:

• A higher contribution from nonregulated retail energy marketing operations, largely resulting from higher gas margins;
• A higher contribution from producer services reflecting the impact of losses in the prior year related to certain energy trading activities that were exited in December 2004; and
• A contribution from the newly acquired Dominion New England power plants; partially offset by
• A lower contribution from regulated electric generation operations primarily due to fuel expenses in excess of rate recovery and comparably milder weather, partially offset by the establishment of certain regulatory assets and liabilities in connection with the North Carolina rate case settlement and reduced purchased power capacity expenses; and
• A lower contribution from exploration and production operations due to:

• Losses related to the discontinuance of hedge accounting for certain oil hedges primarily resulting from a delay in reaching anticipated production levels in the Gulf of Mexico, and subsequent changes in the fair value of those hedges during the first quarter;
• The impact in the prior year of favorable changes in the fair value of certain oil options; and
• An increase in production costs and lower gas production reflecting the sale of mineral rights under the VPP agreements and the sale of the majority of Dominion's natural gas and oil properties in British Columbia, Canada; partially offset by
• An increase in revenue recognized in connection with deliveries under VPP agreements, higher average realized prices for gas and oil, the recognition of business interruption insurance revenue associated with Hurricane Ivan and higher oil production as compared to 2004, reflecting production from the deepwater Gulf of Mexico Devils Tower and Front Runner projects.

The increased contribution by the operating segments in 2005 was more than offset by the impact of the following specific items recognized in 2005 and reported in the Corporate and Other segment:

• A $47 million after-tax charge resulting from the termination of a long-term power purchase agreement; and
• A $6 million after-tax charge primarily reflecting an adjustment of Dominion's valuation of its interest in a long-term power tolling contract as a result of its exit from certain energy trading activities.

The consolidated results also include the impact of significant specific items recognized in 2004. These items were reported in the Corporate and Other segment, and included:

• $26 million of after-tax charges related to Dominion's investment in and planned divestiture of DCI assets
• $8 million of after-tax losses associated with Dominion's telecommunications business, which was sold in May 2004;
• A $7 million after-tax charge related to an agreement to settle a class action lawsuit involving a dispute over Dominion's rights to lease fiber-optic cable along a portion of its electric transmission corridor; partially offset by
• An $18 million after-tax benefit associated with the disposition of CNG International's (CNGI) investment in Australian pipeline assets that were sold in 2004; and
• A $10 million after-tax benefit from the reduction of accrued expenses associated with Hurricane Isabel restoration activities.

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Presented below are selected amounts related to Dominion's results of operations.

An analysis of Dominion's results of operations for the first quarter of 2005 compared to the first quarter of 2004 follows:

Regulated electric sales revenue increased 3% to $1.3 billion, primarily reflecting:

• A $12 million increase due to the impact of a comparatively higher fuel rate for non-Virginia jurisdictional customers and increased sales volumes. This increase in regulated electric sales revenue was more than offset by an increase in Electric fuel and energy purchases, net expense;
• A $14 million increase from customer growth associated with new customer connections;
• A $16 million increase due to other factors, such as the impact of economic conditions on customer usage, as well as variations in seasonal rate premiums and discounts; partially offset by
• A $10 million decrease associated with milder weather.

Regulated gas sales revenue increased 18% to $778 million, largely resulting from a $94 million increase due to higher rates for regulated gas distribution operations primarily related to the recovery of higher gas prices and a $66 million increase resulting from the return of customers from Energy Choice programs, partially offset by a $24 million decrease associated with milder weather, the impact of economic conditions on customer usage and other factors. The effect of this net increase in regulated gas sales revenue was largely offset by a comparable increase in Purchased gas, net expense.

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Nonregulated electric sales revenue increased 111% to $714 million, primarily reflecting the combined effects of:

• A $230 million increase in revenue from merchant generation operations, largely due to the newly acquired Dominion New England power plants and the commencement of commercial operations at Fairless in June 2004; and
• A $149 million increase from energy trading and marketing activities primarily related to the designation of certain commodity derivative contracts as held for non-trading purposes effective January 1, 2005, which were previously held for trading purposes as discussed in Note 21 to the Consolidated Financial Statements. This increase was largely offset by a comparable increase in Electric fuel and energy purchases, net expense.

Nonregulated gas sales revenue increased 12% to $745 million, predominantly due to:

• A $51 million increase in revenue from gas marketing activities due to the optimization of physical gas transportation capacity positions and the effect of favorable price changes on unsettled contracts; and
• A $41 million increase in revenue from sales of gas purchased by exploration and production operations to facilitate gas transportation and satisfy other agreements. This increase in nonregulated gas sales revenue was largely offset by a corresponding increase in Purchased gas, net expense; partially offset by
• A $22 million decrease in revenue from nonregulated retail energy marketing operations, due to lower volumes ($70 million) reflecting a decrease in average customer accounts, partially offset by higher prices ($48 million).

Gas and oil production revenue increased 8% to $411 million, primarily as a result of:

Other revenue increased 75% to $487 million, largely due to:

• A $120 million increase in coal sales revenue resulting from higher coal prices and increased sales volumes;
• A $47 million increase in revenue from sales of purchased oil by exploration and production operations; and
• A $44 million increase due to the recognition of business interruption insurance revenue associated with Hurricane Ivan.

The increases in other revenue related to coal sales and sales of purchased oil were largely offset by corresponding increases in Liquids, pipeline capacity and other purchases expense.

Operating Expenses and Other Items

Electric fuel and energy purchases, net expense increased 62% to $841 million, primarily reflecting the combined effects of:

• A $133 million increase related to merchant generation operations, largely due to the newly acquired Dominion New England power plants and the commencement of commercial operations at Fairless in June 2004;
• A $116 million increase related to energy trading and marketing activities discussed above in Nonregulated electric sales revenue; and
• A $75 million increase related to regulated utility operations primarily resulting from the elimination of fuel deferral accounting for the Virginia jurisdiction. The increase also reflects higher generation volumes in the current year.

Purchased electric capacity expense decreased 12% to $134 million, as a result of the termination of four long-term power purchase agreements in connection with the purchase of the related generating facilities in 2004 and 2005.

Purchased gas, net expense increased 11% to $1.2 billion, principally resulting from:

• A $122 million increase associated with regulated gas sales discussed above in Regulated gas sales revenue;
• A $42 million increase related to purchases of gas by exploration and production operations to facilitate gas transportation and satisfy other agreements, as discussed in Nonregulated gas sales revenue; partially offset by
• A $38 million decrease associated with nonregulated retail energy marketing operations, reflecting decreased volumes ($68 million) partially offset by higher prices ($30 million).

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Liquids, pipeline capacity and other purchases expense increased 98% to $337 million, primarily reflecting a $110 million increase in the cost of coal purchased for resale and a $47 million increase related to purchases of oil by exploration and production operations, each of which are discussed in Other revenue.

Other operations and maintenance expense increased 40% to $814 million, resulting from:

• A $77 million charge resulting from the termination of a long-term power purchase agreement;
• A $46 million increase related to salaries, wages and benefits, including a $25 million increase in incentive-based compensation expense, a $7 million increase due to wage increases and other factors and a $14 million increase in pension and medical benefits;
• $49 million of losses related to the discontinuance of hedge accounting for certain oil hedges primarily resulting from a delay in reaching anticipated production levels in the Gulf of Mexico, and subsequent changes in the fair value of those hedges during the first quarter;
• A $31 million increase related to merchant generation operations, largely due to the newly acquired Dominion New England power plants and the commencement of commercial operations at Fairless in June 2004; and
• The impact of the following benefits recognized in 2004:

• A $35 million benefit due to favorable changes in the fair value of certain oil options related to exploration and production operations; and
• A $16 million benefit from the reduction of accrued expenses associated with Hurricane Isabel restoration activities.

• These increases were partially offset by a $24 million net benefit recognized by regulated utility operations resulting from the establishment of certain regulatory assets and liabilities in connection with settlement of the North Carolina rate case.

Depreciation, depletion and amortization expense (DD&A) increased 9% to $346 million, largely due to incremental depreciation expense resulting from the acquisition of Dominion New England and other property additions.

Dominion Delivery includes Dominion's regulated electric and gas distribution and customer service business, as well as nonregulated retail energy marketing operations.

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Presented below, on an after-tax basis, are the key factors impacting Dominion Delivery's operating results:

Dominion Delivery's net income contribution increased $18 million, primarily reflecting:

• An increase in the contribution from nonregulated retail energy marketing operations, largely resulting from higher gas margins;
• A benefit recognized by regulated utility operations resulting from the establishment of certain regulatory assets in connection with settlement of the North Carolina rate case; and
• Customer growth in the electric franchise service area, primarily reflecting new residential customers; partially offset by
• An increase in salaries, wages and benefits expense resulting from increases in incentive-based compensation expense, pension and medical benefits and wage increases and other factors; and
• Comparably milder winter weather in regulated electric and gas service territories.

Dominion Energy includes Dominion's tariff-based electric transmission, natural gas transmission pipeline and storage businesses and an LNG facility. It also includes certain natural gas production and producer services, which consist of aggregation of gas supply, market-based services related to gas transportation and storage and associated gas trading and the prior year's results of certain energy trading activities exited in December 2004.

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Presented below, on an after-tax basis, are the key factors impacting Dominion Energy's operating results: