Your Board of Directors is soliciting this proxy for the 2007 Annual Meeting of Shareholders and recommends that you vote FOR:

Your Board recommends that you vote AGAINST the shareholder proposals presented on pages 30 and 32.

Record Date

All shareholders that owned common stock at the close of business on February 23, 2007 are entitled to vote at the Annual Meeting. There were 350,206,598 shares of Dominion Resources, Inc. common stock outstanding on that date.

Householding

For registered shareholders and Dominion Direct^® participants, a single copy of the annual report has been sent to multiple shareholders who reside at the same address. Any shareholder who would like to receive a separate annual report may call or write us at the address below, and we will promptly deliver it.

If you received multiple copies of the annual report and would like to receive combined mailings in the future, please contact us at the address below. Shareholders who hold their shares in “street name” — an account with a broker or a bank — should contact their broker regarding combined mailings.

Dominion Resources, Inc.

Shareholder Services

P.O. Box 26532

Richmond, VA 23261

1-800-552-4034

shareholder.services@dom.com

Electronic Delivery

Registered shareholders and Dominion Direct^® participants can elect to view future proxy statements and annual reports on the Internet by marking the appropriate box on your proxy card or by following the instructions provided when voting by Internet or by telephone. If you choose this option, you will receive a proxy card by mail, along with instructions on how to access the proxy statement and annual report at a specific Internet site. Your choice will remain in effect until you notify Dominion that you wish to resume mail delivery of these documents. If you hold your shares in street name, please refer to the information provided by your bank or broker for instructions on how to elect this option. If you elect to receive your proxy statement and annual report via the Internet, you can still request paper copies by contacting us at the email or postal address or phone number above.

Voting

Methods. You may vote in person at the Annual Meeting or by proxy. For shares that you hold directly as a registered shareholder or shares held in Dominion Direct^®, you have three ways to vote by proxy:

If you vote and change your mind on any issue, you may revoke your proxy by:

Beneficial Owners. If your shares are held in street name with your broker or by a nominee and you wish to vote by telephone, Internet or mail, please follow the instructions found on the Voting Instruction Card enclosed with this proxy statement. Please note that under New York Stock Exchange (NYSE) rules, if you do not provide voting instructions to your broker, your shares will not be voted on any proposal for which your broker does not have discretionary authority to vote (broker non-votes). For this meeting, brokers cannot vote without instructions on the shareholder proposals (Items 3 and 4). If you are a beneficial owner and wish to vote your shares at the Annual Meeting, you should mark the Voting Instruction Card to indicate that you plan to attend and vote your shares at the meeting. The institution that holds your shares will then provide you with a legal proxy, which will be required along with a ballot that will be provided at the meeting.

Registered Shareholders and Dominion Direct^® Participants. Your proxy card shows the number of full and fractional shares you own. If you are a participant in our Dominion Direct^® stock purchase plan, the number includes shares we hold in your Dominion Direct^® account. All shares will be voted according to your instructions if you properly vote your proxy by one of the methods listed above. If you sign your proxy and do not make a selection, your shares will be voted as recommended by the Board. No vote will be recorded for shares unless a properly signed proxy is returned.

Employee Savings Plan Participants. You will receive a request for Voting Instructions from the Trustee for the Plans. The share amounts listed on that form include the full and fractional shares in your Plan account(s). You may instruct the Trustee by:

Complete instructions can be found on the Voting Instruction Card included with this proxy statement. Whichever method you choose, the Trustee will vote according to your instructions and will keep your vote confidential. If you do not vote your Savings Plan shares, an independent fiduciary hired by the Plan Administrator will vote your shares. All voting instructions must be received by 6:00 a.m. EDT on Monday, April 23, 2007.

How Votes are Counted. Each of your shares will be counted as one vote. A majority of the shares outstanding on February 23, 2007 constitutes a quorum for this meeting. Abstentions and broker non-votes are included in determining a quorum.

The 10 nominees for director receiving the most votes will be elected.

The ratification of the appointment of our auditor and the shareholder proposals presented on pages 30 and 32 require more votes in favor than the number of votes against in order for them to be approved. Abstentions and broker non-votes are not counted as a vote in favor or against and, therefore, will not affect the outcome of these items.

Attending the Meeting

Shareholders who plan to attend the meeting will be asked to present valid picture identification, such as a driver’s license or passport. Registered shareholders must bring a copy of their Dominion Direct^® statement or dividend check stub as proof of ownership. If you hold stock in street name, you must bring a copy of your recent brokerage statement, and if you plan to vote at the meeting, you must have a legal proxy. If you are an authorized proxy, you must present the proper documentation. Registration will begin at 8:30 a.m., and seating will be available on a first come, first served basis. Cameras (including cell phones with cameras), recording devices and other electronic devices will not be permitted at the meeting. Rules of the meeting will be printed on the back of the agenda that you will be given at the meeting.

Solicitation and Tabulation

We will pay for soliciting proxies from our shareholders, and some of our employees may telephone shareholders after the initial mail solicitation. We also have retained Georgeson Inc., a proxy solicitation firm, to assist in the solicitation of proxies for a fee of $14,000 and reimbursement of expenses. In addition, we may reimburse brokerage firms and other custodians, nominees and fiduciaries for their reasonable expenses in sending proxy materials to the beneficial owners of stock. We have retained Corporate Election Services, Inc. to tabulate the votes and to assist with the Annual Meeting.

Matters Before the 2007 Annual Meeting

Management and the Board are not aware of any matters that may come before the Annual Meeting other than the matters disclosed in this proxy statement.

Proposals for the 2008 Annual Meeting

For a shareholder proposal to be considered for possible inclusion in the 2008 proxy statement, Dominion’s Corporate Secretary must receive it no later than close of business November 16, 2007. Shareholders should refer to Securities and Exchange Commission (SEC) rules, which set standards for eligibility and specify the types of proposals that are not appropriate for inclusion in the proxy statement.

If you wish to bring any matter (other than the nomination of director candidates) before the 2008 Annual Meeting, you must notify the Corporate Secretary in writing no later than the close of business January 28, 2008. Under our bylaws, the notice must contain the following information regarding each matter:

If you do not provide the proper notice by January 28, 2008, the chairman of the meeting may exclude the matter, and it will not be acted upon at the meeting. If the chairman does not exclude the matter, the proxies may vote in the manner they believe is appropriate, as SEC rules allow. Dominion plans to hold its 2008 Annual Meeting on April 25, 2008.

GOVERNANCE AND THE BOARD

In 2006, the Committee responsible for governance took a comprehensive view of Dominion’s governance practices in light of the SEC’s new rules and made several recommendations to the Board. Among the recommendations made was changing that Committee’s name to the Compensation, Governance and Nominating (CGN) Committee to clearly define the Committee’s governance role. The CGN Committee also recommended revisions to its charter, Dominion’s corporate governance guidelines, director independence standards and bylaws, as well as the establishment of related party transaction guidelines. The Board has adopted the CGN Committee’s recommendations.

The revised CGN Committee charter has the following new provisions: (i) a requirement that the Committee review and discuss the Compensation Discussion and Analysis (CD&A) prepared by management and decide whether to recommend to the Board that it be included in this proxy statement and (ii) a description of the Committee’s responsibility regarding related party transactions. The revised corporate governance guidelines have the following new provisions: (i) a “clawback” policy for the recovery of performance-based compensation in the event financial results are restated due to fraud, negligence or intentional misconduct and (ii) a policy that any director submitting a resignation will abstain from participating in deliberations or voting regarding such resignation. In addition, the revised CGN Committee charter, corporate governance guidelines and director independence standards contain a new provision that two members of the CGN Committee must be considered outside directors under Section 162(m) of the Internal Revenue Code. Finally, Dominion’s bylaws have been amended to provide for a director nominee’s resignation in the event that such nominee does not receive a majority vote and to conform with revisions to the Virginia Corporation Act. All of these documents can be found in the governance section of our website (www.dom.com). The corporate governance guidelines, CGN Committee Charter and director independence standards are also printed in the Appendix.

Dominion’s Code of Ethics, which applies to our Board of Directors, principal executive, financial and accounting offi-cers, and all employees also can be found in the governance section of our website. Any waivers or changes to our Code of Ethics relating to our senior executives will be posted on this section of our website. You may write to the Corporate Secretary at the address found on the back cover of this proxy statement for a copy of the Code of Ethics and any of our governance documents at no charge.

RELATED PARTY TRANSACTIONS

Dominion’s related party transaction guidelines were recommended by the CGN Committee and established by the Board in February 2007 in order to recognize the process the Board will use in identifying potential conflicts of interest arising out of financial transactions, arrangements and relations between Dominion and any related persons. The term related

person includes not only Dominion’s directors and executive officers, but others related to them by certain family or business ties. The guidelines spell out in greater detail the practices outlined in Dominion’s Code of Ethics and procedures already followed by Dominion and the CGN Committee. The guidelines are printed in the Appendix to this proxy statement and can be found on our website (www.dom.com).

We collect information about potential related party transactions (those in which a related person may have a material interest) in our annual questionnaires completed by directors and executive officers. Potential related party transactions are first reviewed and assessed by the Corporate Secretary and the General Counsel to consider the materiality of the transactions and then reported to the CGN Committee. The CGN Committee reviews and considers relevant facts and circumstances and determines whether to ratify, approve or deny the related party transactions identified. Since January 1, 2006, there have been no related party transactions involving Dominion that were required either to be approved under Dominion’s policies or reported under the SEC related party rules.

NOMINATION PROCESS

Nominating Committee

The CGN Committee, which is comprised entirely of independent directors, is responsible for reviewing the qualifications of and selecting director candidates for nomination by the Board. As stated in the Committee’s charter and the Board’s governance guidelines, the Committee selects candidates who represent a mix of backgrounds and experiences that the Committee believes will enhance the quality of the Board’s deliberations and decisions. These attributes may include a candidate’s character, judgment, diversity of experience, acumen and ability to act on behalf of shareholders. Business and financial experience and governmental and community service are relevant criteria. In selecting candidates, the Committee assesses and considers the Board’s diversity, in its broadest sense, reflecting, but not limited to, geography, gender and ethnicity.

The Committee also considers whether a director candidate is independent in accordance with Dominion’s independence standards. Based on its deliberations, the Committee recommends director candidates, the majority of whom are independent, to the Board for nomination.

Director Nominations

A current member of the Board, a member of management or a shareholder may submit director nominations to the CGN Committee. The Committee considers all nominee recommendations and uses the nomination process described above in selecting nominees. Under our bylaws, if you wish to nominate a director at a shareholders’ meeting you must be a shareholder and deliver written notice to our Corporate Secretary at least 60 days before the meeting. If the meeting date has not been publicly announced 70 days before the meeting, then notice can be given up to 10 days following the public announcement. Any notice must include the following information:

DETERMINATION OF INDEPENDENCE

The CGN Committee evaluates all directors and director nominees under Dominion’s independence standards (found in the Appendix), including consideration of the matters described above under Related Party Transactions, that might impair a director’s independence. Based on its review in January and February 2007, the Committee recommended to the full Board that all nominees except Mr. Farrell, be determined independent. In considering the Committee’s recommendations, the Board determined that Mr. Farrell is not independent because he is a current Dominion employee. The CGN Committee also considered the employment of Dr. Brown’s, adult, financially independent daughter by Dominion’s services company and determined that Dr. Brown does not have a material interest in his daughter’s employment at Dominion. The Committee recommended and the Board concurred that such employment does not affect his independence.

As part of its director independence evaluation in 2006, the Board determined that Mr. Capps, who is not standing for re-election in 2007, was not considered independent because of his recent employment with Dominion. The Board also determined that Dr. Simmons, who also is not standing for re-election in 2007, was considered independent. In making its determination, the Board considered the employment of Dr. Simmons’ adult, financially independent son by Dominion’s services company and determined that he does not have a material interest in such employment.

COMMUNICATIONS WITH DIRECTORS

Shareholders and other interested persons may communicate directly with Dominion’s non-management directors in two ways — by email or by writing to them.

Email. Emails may be sent directly to our non-management directors at www.dom.com/about/governance/contact.jsp. You may direct your communications to our non-management directors as a group or to any committee of the Board. The Board has directed the Corporate Secretary or her representative to monitor the non-management directors’ electronic mailbox and, as appropriate, to review, sort and summarize communica-

tions or forward certain communications (such as customer complaints) to other company personnel. All emails received in the non-management directors’ electronic mailbox are treated as any emails received by Dominion. They are first isolated and scanned for viruses, malicious/disruptive code, spam/junk email and profanity, and are forwarded only if free of these items. When appropriate, the Corporate Secretary consults with the General Counsel and Audit Committee chairman, who then determine whether to communicate further with the Audit Committee and/or the full Board. The non-management directors have access at all times to their electronic mailbox, as well as a report that tracks how communications have been handled.

Postal mail. Letters may be sent to the non-management directors or one or more directors by writing to the Board of Directors, c/o Corporate Secretary, Dominion Resources, Inc., P.O. Box 26532, Richmond, Virginia 23261. The same procedures described above will be followed for postal mail. Inappropriate communications (such as commercial solicitations) will not be forwarded to the Board.

SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE

Our directors and officers report their stock transactions to the SEC. As part of our annual review and confirmation of share ownership, Dr. Brown discovered that a managed Individual Retirement Account of his had acquired Dominion common stock in February and June 2003 without his knowledge. These shares have now been reported on a Form 4.

EXECUTIVE SESSIONS

The CGN Committee chairman leads executive sessions of non-management, independent directors at the conclusion of each regularly scheduled Board meeting.

COMMITTEES & MEETING ATTENDANCE

The Board met eight times in 2006. Each Board member attended at least 92% of the Board meetings and all meetings of the committees on which he or she served. All 2006 Board nominees attended the 2006 Annual Meeting of Shareholders.

Effective following the 2006 Annual Meeting, Dominion’s Board changed its committee memberships and modified its committee structure to merge the Finance Committee with the Risk Oversight Committee. Messrs. Kington and Harris moved from the Audit and Finance Committees, respectively, to become members of the CGN Committee and Mr. Leatherwood moved from the CGN Committee to chair the newly constituted Finance and Risk Oversight Committee. In June, that committee adopted a charter that describes its responsibilities and can be found on the governance section of Dominion’s website. The current committee memberships are listed on the following page.

(1) The annual cash retainer is $40,000 for all non-employee directors. The Audit and CGN Committee chairmen each receive an annual cash retainer of $15,000, while the chairman of the Finance and Risk Oversight Committee receives a $5,000 annual cash retainer. Non-employee directors receive $2,000 in cash for each Board, Audit or CGN Committee meeting attended and $1,500 for each Finance and Risk Oversight Committee meeting attended. These directors may defer any portion or all of their compensation under the Non-Employee Director Compensation Plan. In the case of Mr. Capps, the amount listed represents the annual fee paid for his services as a consultant and Board member pursuant to his agreement with Dominion approved by the Board and dated May 26, 2005.

(2) Each non-employee director, except Mr. Capps, receives an annual stock retainer valued at approximately $40,000. On the date of the grant, the awards were valued at $75.17 per share. Non-employee directors may defer any portion or this entire stock retainer. In addition, non-employee directors elected to the Board after January 1, 1995 and who were not yet 62 years old, receive an annual deferred stock grant valued at approximately $40,000. On the date of grant, this award was valued at $75.17 per share. (See share ownership table for February 9, 2007 balances).

(3) While Mr. Capps does not receive stock awards as a director of Dominion, in 2005 as a Dominion executive he received a restricted stock award of 57,098 shares contingent upon his services as a consultant. The company continues to accrue expenses for this award. During 2006, 19,032 shares vested and the remaining shares will vest in 2007 and 2008. The 2006 expense was $1,550,560.

(4) All Other Compensation

Footnotes:

(a) With the exception of Mr. Capps, amounts represent dividend equivalents earned on the Directors Stock Accumulation Plan (SAP) balances (see share ownership table for February 9, 2007 balances). For directors elected to the Board prior to 2004, the SAP provided non-employee directors a one-time stock award equivalent in value to approximately 17 times the annual cash retainer. Stock units were credited to a book account and a separate account continues to be credited with additional stock units equal in value to dividends on all stock units held in the director’s account. A director must have 17 years of service to receive all of the stock units awarded and accumulated under this Plan. Reduced distributions are made where a director has at least 10 years of service or has reached age 62. Dividend earnings under the Plan are paid at the same rate declared by the company for all shareholders. In the case of Mr. Capps, this amount represents dividends paid on his outstanding restricted stock.

(b) Amounts represent tax liabilities associated with reimbursement of expenses as described below in Expense Reimbursements.

(c) This amount represents benefits provided for Mr. Capps in a 2005 agreement which includes $36,589 for home security systems; and $29,324 for a vehicle allowance, club fees, home computer equipment and technical support. The cost of technical support is calculated based on the full weighted-cost of an employee’s time. Mr. Capps has the use of office space at no incremental cost to the company. The company reimburses Mr. Capps for nominal clerical help.

(d) This amount represents benefits provided in accordance with the Consolidated Natural Gas Company (CNG) merger agreement for financial planning, downtown office parking space, cell phone and laptop. Mr. Davidson has the use of office space and nominal clerical help at no incremetal cost to the company.

Expense Reimbursements

We reimburse directors for travel, lodging and related expenses they incur in attending Board and committee meetings. These reimbursements include the expenses incurred by directors’ spouses in accompanying the directors to one Board meeting and the Annual Meeting each year, along with any taxes related to such payments as disclosed in the table above. In addition, directors and their spouses may accompany the chief executive officer (CEO) or other senior executive on corporate aircraft for both business and personal travel. The company imputes income to the director for all spousal travel and any personal travel.

Director Compensation Plans

Non-Employee Directors Compensation Plan. Under this plan, the company issues the equity portion of non-employee directors’ compensation. The plan also allows directors to defer all or a portion of their annual retainer and meeting fees

into stock unit or cash accounts and provides for the annual deferred stock grant given to certain directors elected to the Board after January 1, 1995. Stock unit accounts are credited quarterly with additional stock units equal in value to dividends paid on Dominion common stock and cash accounts are credited monthly with interest at an annual rate established for the Fixed Rate Fund (which was 5% in 2006) under Dominion’s frozen Executive Deferred Compensation Plan. Shares of Dominion common stock equal in value to stock units held for directors under this plan are issued into a trust and directors retain all voting and other rights as shareholders. Distributions under this plan are made when a director ceases to serve on the Board. In addition, this plan provides a means for the Board to make restricted stock awards and option grants.

Frozen Directors Plans. In order to comply with tax law changes resulting from the enactment of the American Jobs Creation Act, on December 31, 2004, the Board froze the following directors’ plans: Deferred Cash Compensation Plan, Stock Compensation Plan, and Stock Accumulation Plan (described in Footnote (a) under “All Other Compensation” on this page). These plans provided a means to compensate directors and allowed directors to defer that compensation, whether in cash or stock, until they ceased to be a director or reached a specified age. In the case of the Deferred Cash Compensation Plan, deferred fees were credited to either an interest bearing account or a Dominion common stock equivalent account. Under the frozen plan, interest (at the same rate as under the Non-Employee Directors Compensation Plan) or dividend equivalents continue to accrue and may be held in trust until distributions are made. Prior to 2005, the stock portion of a director’s retainer was paid under the Stock Compensation Plan and directors had the option to defer receipt of that stock.

Other Benefits

Charitable Contribution Program. This program was discon- tinued in January 2000. For directors elected before that time, Dominion funded the program by purchasing life insurance policies on the directors. Those policies have been fully funded and participating directors (currently Messrs. Capps, Harris, Leatherwood and Wollard, and Drs. Lambert, Royal and Simmons) will derive no financial or tax benefits from the program, because all insurance proceeds and charitable tax deductions accrue solely to Dominion. However, upon a participating director’s death, $500,000 will be paid in 10 installments to the qualifying charitable organization(s) designated by that director.

Matching Gifts Program. Dominion will match a director’s donations, on a 1-to-1 basis, to one or more 501(c)3 organizations up to a maximum of $5,000 per year. If the donation is to an organization on whose board the director serves or for which the director volunteers more than 50 hours of work during a year, Dominion will match the donation on a 2-to-1 basis, up to the $5,000 maximum.

Presented below is information about each nominee for director. Each nominee is an incumbent director recommended by the CGN Committee and nominated by the Board. Directors are elected annually; therefore, each director’s term of office will end at the next Annual Meeting of Shareholders when his

or her successor has been elected. Your proxy will be voted to elect the nominees unless you tell us otherwise. If any nominee is not available to serve (for reasons such as death or disability), your proxy will be voted for a substitute nominee if the Board of Directors nominates one.

SHARE OWNERSHIP

DIRECTOR AND OFFICER SHARE OWNERSHIP TABLE

Footnotes:

SIGNIFICANT SHAREHOLDER

Audit Committee Report

Our Committee operates under a written charter, which can be found on our website, and was most recently revised in January 2005.

Our Committee reviews and oversees Dominion’s financial reporting process and related disclosure and internal controls. Each November, we develop the coming year’s meeting schedule and agendas, which include reviews of Dominion’s internal controls testing, disclosure controls and procedures, charter requirements, charitable giving, auditor independence requirements, pre-approval of fees, and other issues that we, management and the independent auditors feel should be addressed more closely.

During 2006, we reviewed and discussed the following with management and the independent auditors:

Our Committee conducts pre-meeting sessions to review with management a single topic in more detail. The topics are chosen as part of a November planning process. In 2006, sessions focused on: environmental risks, including clean air and water regulations and climate change; a review of emerging accounting issues and a technical accounting update; an overview of Dominion’s workforce including its workforce profile and planning strategies; and an overview of the company’s law department and its practice areas. In addition to the Committee members, other members of the Board attended each of these sessions.

At four of the Committee’s meetings, we met with the internal and independent auditors, with and without management present, to discuss the plans for, and scope and results of, their audits and reviews of Dominion’s internal controls and the overall quality of Dominion’s financial reporting.

Management has represented that Dominion’s consolidated financial statements were prepared in accordance with generally accepted accounting principles. We reviewed and discussed the audited consolidated financial statements with management and the independent auditors. In accordance with the

requirements established by the Statement on Auditing Standards No. 61, Communication with Audit Committees (as amended by Auditing Standards 89 and 90), this discussion included a review of significant accounting estimates and controls, and the quality of Dominion’s accounting principles.

We have received written disclosures and letters from the independent auditors required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees and the NYSE governance standards regarding internal quality control procedures. We have discussed with the independent auditors the issue of their independence from Dominion, including any non-audit services performed by them.

2006 Consolidated Financial Statements

Relying on these reviews and discussions, we recommended to the Board of Directors, and the Board approved, the inclusion of the audited financial statements and management’s annual report on internal control over financial reporting in Dominion’s Annual Report on Form 10-K for the year ended December 31, 2006, for filing with the SEC.

Independent Auditors for 2007

Our Committee discussed with management and reviewed with the independent auditors their plans and proposed fees for auditing the 2007 consolidated financial statements and internal controls over financial reporting of Dominion and its subsidiaries, as well as their proposed audit-related and non-audit services and fees. Based on our discussions and review of the proposed fee schedule, we have retained Deloitte & Touche LLP, a registered public accounting firm, independent of us, as Dominion’s independent auditors for 2007, and in accordance with our pre-approval policy, approved the fees for the services presented to us. We determined that the non-audit related services proposed to us do not impair Deloitte & Touche’s independence, and that it is more economical and efficient to use them for the proposed services. Permission for any other specific non-audit related services will require prior approval by our Committee or its chairman. When appropriate, Dominion seeks competitive bids for non-audit related services.

David A. Wollard, Chairman

Ronald J. Calise

Robert S. Jepson, Jr.

Margaret A. McKenna

February 28, 2007

Fees and Pre-Approval Policy

The Audit Committee has a pre-approval policy for Deloitte & Touche’s services and fees. Attached to the policy is a schedule that details the services to be provided and an estimated charge for such services. At its December 2006 meeting, the Committee approved the schedule of services and fees for 2007. As provided by Dominion’s pre-approval policy, any changes to the schedule may be approved by the Committee chairman, and reported to the full Committee at its next meeting.

The following table presents fees paid to Deloitte & Touche for the fiscal years ended December 31, 2006 and 2005.

Audit fees are for the audit and review of Dominion’s financial statements in accordance with the standards of the Public Company Accounting Oversight Board of the United States, including Section 404 testing, comfort letters, statutory and regulatory audits, consents and other services related to SEC matters.

Non-Audit Services

Audit-related fees are for assurance and related services that are associated with the audit or review of Dominion’s financial statements, including employee benefit plan audits, due diligence services and financial accounting and reporting consultation.

Tax fees are for tax compliance services, tax consulting services, and related costs.

Other Information About the Auditors

Representatives of Deloitte & Touche will be present at the Annual Meeting. They will have an opportunity to make a statement if they desire, and will be available to respond to shareholder questions.

ITEM 2 — RATIFICATION OF APPOINTMENT OF AUDITORS

Dominion’s Audit Committee has retained Deloitte & Touche LLP, an independent registered public accounting firm, as Dominion’s independent auditors for 2007.

Our Compensation, Governance and Nominating Committee operates under a written charter that can be found on our website and was most recently updated in January of this year.

Our Committee reviews and oversees Dominion’s executive compensation programs and the process by which compensation and benefits are determined. To assist us with these responsibilities, we have hired Pearl Meyer & Partners (PMP) as our independent compensation consultant. We meet in person with a managing director of PMP at least once a year and have her participate in other meetings by teleconference as circumstances warrant.

During 2006, we reviewed and discussed the following with management and our independent consultant:

During 2006, we met with our independent consultant, without management present to review and discuss CEO compensation and other matters. We also met several times with our CEO and discussed his succession and that of key executive positions, as well as the overall performance of his leadership team.

Compensation Discussion and Analysis

In preparation for filing this proxy statement, our Committee reviewed management’s CD&A that describes in more detail our Committee’s process and decisions with regard to Dominion’s executive compensation programs. During our review of the CD&A, we discussed the content of the CD&A with management. We subsequently recommended to the Board of Directors that, based on our review and discussion, the CD&A be included in this proxy statement and incorporated by reference in Dominion’s Annual Report on Form 10-K.

Frank S. Royal, Chairman

John W. Harris

Robert S. Jepson, Jr.

Mark J. Kington

David A. Wollard

February 27, 2007

EXECUTIVE COMPENSATION PHILOSOPHY —

THE OBJECTIVES OF DOMINION’S PROGRAM

Dominion’s executive compensation program is designed to attract, motivate and retain a superior management team, while ensuring that our annual and long-term incentive programs align management’s financial success with that of our shareholders. Management and Dominion’s Board of Directors, through the oversight of its CGN Committee, believe in putting a substantial portion of our senior executives’ compensation at risk based on performance goals established by the CGN Committee. While we benchmark and set general compensation levels relative to Dominion’s peer group of companies (detailed below) and market data, we administer our program to meet the needs and requirements of Dominion. Market data is used as a “reality check” in evaluating our compensation decisions for our senior executives.

Our Process

Each year, the executive compensation program is comprehensively assessed and analyzed. The review process includes, but is not limited to, the following steps:

Management has the following involvement with the executive compensation process:

The Peer Group and Peer Group Comparisons

Dominion’s peer group is generally consistent from year to year, with merger and acquisition activity being the primary reason for any changes. The 2006 peer group consisted of a diversified group of ten energy companies: American Electric Power Company, Inc.; Constellation Energy Group, Inc.; Duke Energy Corporation; Entergy Corporation; Exelon Corporation; FirstEnergy Corporation; FPL Group, Inc.; Progress Energy, Inc.; Southern Company and TXU Corp. We have a separate group of peer companies for our E&P business unit: Anadarko Petroleum Corporation; Apache Corporation; Burlington Resources, Inc.; Devon Energy Corporation; EOG Resources, Inc.; Kerr McGee Corporation; Pioneer Natural Resources Company and XTO Energy Inc. Because of unusual compensation practices, XTO Energy Inc. is not fully used for compensation setting purposes.

The CGN Committee, PMP and Dominion’s executive compensation department use the peer company data to (i) compare

Dominion’s stock and financial performance against these peers using a number of different metrics and time periods; (ii) analyze compensation practices within our industry; and (iii) benchmark other benefits such as our Employment Continuity Agreements and the use of long-term equity vehicles. The general energy peer group is used for our named executive officers other than Mr. Radtke for whom the E&P peer group was used.

Elements of Dominion’s Executive Compensation Program

Our executive compensation program consists of three basic components:

BASE SALARY

Base salary compensates our officers, along with the rest of our workforce, for committing significant time to working on Dominion’s behalf. In considering annual salary increases, the following factors are assessed: (i) the competitive labor market; (ii) changes in an officer’s scope of responsibility, including promotions; and (iii) individual performance, special skills, experience and other relevant considerations.

While the base salary component of our program generally is targeted at or slightly above market median, our primary goal is compensating our executives at a level that best achieves our compensation philosophy and addresses internal equity issues. This results in actual pay for some positions that may be higher or lower than our stated target. We have found that peer group and survey results for particular positions can vary greatly from year to year, and we consider market trends for certain positions over a period of years rather than a one-year snapshot in setting compensation for those positions.

For 2006 base compensation, all officers received a base salary adjustment of at least 4%. Some officers received salary adjustments in excess of 4% for one of the following reasons: (i) increase or other change in job responsibility; (ii) specific market-based reasons; (iii) exceptional performance; (iv) unique retention or job competitiveness reasons; and/or (v) internal pay equity. Mr. Farrell received a 29% increase in base salary in 2006 when he assumed the duties of CEO of Dominion. Even with this increase, his base salary and targeted total cash compensation were below the median for his peers. The CGN Committee determined to bring his base salary to the market median over the course of a few years, based on his achievements and performance in office. The remaining named executive officers included in the Summary Compensation Table received the following 2006 base salary increases: Mr. Chewning – 13.6%; Mr. Radtke – 19%; Mr. McGettrick – 26.5%; and Mr. Johnson – 10%. Mr. Chewning’s increase resulted in his base pay being slightly above market median in recognition of his experience and superior job performance, and the complexity and scope of his responsibilities. Messrs. Radtke, McGettrick and Johnson’s base salaries continued to lag behind the market median based on the increasing size of their business units, the effects of several years with no or below market increases in base salary, and for Messrs. Radtke and McGettrick, the increasing

competitive nature of their positions. These increases were aimed at bringing their base salaries closer to market median and to reward excellent performance.

ANNUAL AND LONG-TERM INCENTIVE PROGRAMS

Our annual and long-term incentive programs continue to play a critical role in our compensation practices and our philosophy of aligning the interests of our officers with those of Dominion’s shareholders while rewarding performance. Our annual incentive program is a cash-based program focused on short-term goal accomplishments. Our long-term incentive program is weighted equally between a retention component (restricted stock) and a performance component (cash-based performance grant).

Performance-Based Compensation. The performance-based components of our incentive program (annual incentive plan and the cash performance grants of our long-term program) motivate and encourage our officers and employees to achieve operational excellence that will benefit Dominion’s shareholders. We use a blend of goals focused on Dominion’s financial achievements overall, specific business unit goals and individual goals. These components allow Dominion to encourage and reward officers and employees for achieving financial goals, as well as operating and stewardship goals such as safety and individual power plant performance. Taken together, the goals for any given year are designed to support our values of safety, ethics, excellence and One Dominion.

Annual and long-term incentives are an industry standard and a best practice to motivate employees to achieve performance goals for a portion of their compensation. Performance-based compensation is a large part of our executives’ compensation, with senior officers having the most compensation at risk based on performance. This correlates with the influence and responsibility each level of management has for delivering financial results to our shareholders.

For our CEO, Mr. Farrell, just over 50% of his targeted total compensation (annual and long term) is at risk and depends on the achievement of performance goals. For the other named executive officers, targeted compensation at risk ranged from 49% to 44%, and for a typical vice president, the percentage of targeted compensation at risk is approximately 38%. This compares to an average of approximately 11% of total pay at risk for non-officer employees. This structure ensures that if performance goals are not achieved, the officers have compensation that could be significantly lower than market median depending on the extent that goals are missed. If performance goals are exceeded, officers will receive compensation that is close to or at the market 75th percentile, depending on the extent that goals are exceeded. Additionally, a substantial portion of each officer’s total compensation is tied to the performance of Dominion’s stock through their restricted stock grants, ranging from 18% of targeted total compensation for a typical vice president up to 37% for Mr. Farrell. For Mr. Farrell, this results in almost 90% of his total direct compensation having a performance component.

As described in Dominion’s corporate governance guidelines located in the Appendix, the Board may seek to recover performance-based compensation paid to officers who are found to be personally responsible for fraud, negligence or intentional misconduct that causes a restatement of financial results filed with the SEC.

Annual Incentive Plan. Our Annual Incentive Plan focuses on short-term goals, and for the CEO, comprised more than half of his annual cash compensation for 2006. With the introduction of cash-based performance grants in 2006 as outlined below, the CEO and each eligible officer may receive a higher percentage of their total 2007 compensation (annual and long-term) earned in cash, based on goal accomplishment.

Under our Annual Incentive Plan, the CGN Committee establishes “target awards” for each executive. These target awards are expressed as a percentage of the individual executive’s base salary (for example, 50% x base salary). The target award is the amount of cash that will be paid, at year-end, if the plan is fully funded and the executive achieves 100% of the goals established at the beginning of the year. Under the Annual Incentive Plan, if goals are achieved or exceeded, the executive’s total cash compensation for the year is targeted to be at or slightly above market median. If the goals are not achieved, the executive’s total cash compensation may be significantly lower than market median, depending on the extent to which goals were not achieved. For 2006, Mr. Farrell’s annual incentive target was 110% of his base salary, consistent with the intent of having a substantial portion of his compensation at risk. Messrs. Chewning and Radtke’s 2006 target was 90% and Messrs. McGettrick and Johnson’s target was 80%.

Our 2006 Annual Incentive Plan was funded based on goals established and approved by the CGN Committee at the beginning of 2006. For the 2006 Annual Incentive Plan, the threshold consolidated earnings goal for any payout under the plan was reported operating earnings of $5.05 per share, with full funding at reported operating earnings of $5.15 per share. Additionally, if the company’s operating earnings exceeded $5.15 per share, then for every one cent reported over $5.15 per share, 3% in additional funding would be applied to the 2006 Annual Incentive Plan, up to a maximum of 200% funding. This results in the company and employees sharing equally in earnings above the $5.15 per share goal until the 200% maximum funding level is achieved.

To access the funded bonus pool, each executive must meet certain goals, including consolidated and business unit financial goals as well as operating, stewardship and Six Sigma targets. The consolidated earnings goal is designed to drive employee behavior and performance to ensure that shareholders receive an appropriate return on their investment in Dominion.

The business unit financial goals are set based on the levels necessary to achieve the consolidated earnings goal for Dominion. Also, individual business unit goals provide line-of-sight targets for officers and employees, and facilitate financial and business planning at the business unit level.

The operating and stewardship goals may not be financial, and can be customized for a business unit or individual. The

accomplishment of these goals often supports the business unit financial goals. The most common operating and stewardship goals have objectives in the following areas: safety; reliability; expenditures and production; forced outages; and service level requirements.

Finally, Six Sigma goals support Dominion’s mission to continue to use Six Sigma to increase productivity, improve service reliability, reduce costs and enhance customer service while bringing the benefits of these improvements to the bottom line.

Each executive’s goals are weighted according to his or her responsibilities. Payout under the plan is determined by multiplying the employee’s target bonus by the percentage the plan is funded (e.g., 100%) by the percentage that the employee’s own personal goal package is achieved (e.g., 90%).

The goal weightings for bonuses under the 2006 Annual Incentive Plan for officers were as follows:

For the named executive officers, bonuses were based solely on the consolidated earnings goal, with the CGN Committee having discretion to reduce final payouts to the extent appropriate, based on any goal accomplishment that was less than 100% for the corporate-wide Six Sigma goal, and for Messrs. Radtke, McGettrick and Johnson, any goal accomplishment that was less than 100% for their business unit financial goals or their own personal operating/stewardship goals. The reductions could be as much as the percentages set forth in the table above for each category for other officers. Due to the broad scope of their duties, Messrs. Farrell and Chewning did not have operating and stewardship goals, as these goals tend to be business-unit specific.

We compared Dominion’s actual financial performance for 2006 with the consolidated and business unit earnings goals. We achieved operating earnings of $5.17 per share in 2006 before any additional funding under our plan. Taking into account the funding formula described above, the 2006 Annual Incentive Plan was funded at the 103% level, with additional 3% funding available to cover any upside from the Six Sigma stretch goals described above. Dominion reported $5.16 per share in operating earnings as a result of funding these additions, with shareholders and employees sharing equally in the operating earnings over $5.15 per share.

The Six Sigma goal for 2006 was a corporate-wide positive financial impact of $100 million, with a stretch goal of $150 million, which would result in an increase of 4% in each employee’s payout score if the stretch goal were achieved. Dominion as a whole and each business unit exceeded their Six Sigma stretch goal, with corporate-wide savings of $224 million achieved in 2006. This resulted in all employees, except for our named executive officers, receiving an additional 4% to their payout score for determining 2006 payouts, with a total

possible payout of 107% of their target bonus. Our named executive officers received 106% plan funding because their bonuses were based on consolidated earnings goals only, including the earnings kicker; however, their goal score was capped at 100%. Actual amounts earned under the 2006 Annual Incentive Plan by each of the named executive officers are set forth in the Summary Compensation Table under the heading “Non-Equity Incentive Plan Compensation” on page 20.

The Long-Term Incentive Program. For 2006, Dominion transitioned its long-term program from retention-based restricted stock, with alignment to shareholders, to a long-term program that is both (i) aligned with the long-term interests of shareholders through restricted stock grants and (ii) designed to put a substantial portion of the long-term compensation at risk based on the achievement of performance measures with the introduction of cash performance grants. Grants are typically made on or before April 1 of each year, and we do not time the grant dates based on the release of material information or expectations of stock price changes. Newly promoted officers receive pro-rata grants for the current year’s program based on the fair market value of the stock as of their date of employment or election to office.

Dominion has not issued stock options since 2002, although options remain outstanding from prior programs and are reported in the Outstanding Equity Awards at Fiscal Year-End Table on page 22, with options exercised in 2006 disclosed in the Option Exercises and Stock Vested Table on page 22.

While the CGN Committee reviews prior grants to the CEO before approving new long-term grants, the determination of the appropriate grant for the CEO and other senior executives in any given year is based on the results of the process we described above for our executive compensation program. We do not “deduct” prior compensation paid to our executives from the compensation being considered for the current year. Similarly, if a newer executive does not have prior grants outstanding due to his or her short tenure, we do not increase the compensation paid to the executive due to a lack of outstanding grants from prior years.

Performance Grants. For 2006, we transitioned to a long-term incentive program that is 50% performance-contingent, payable in cash rather than stock. These grants were made on April 1, 2006, and are at-risk based on the achievement of two goals discussed below. The reasons for shifting a portion of the program to cash were (i) the significant ownership of Dominion stock by executives and the high rate of compliance with our share ownership requirements; (ii) provide a more immediate award following achievement of goals; and (iii) improve the tax efficiency of awards as no shares need to be sold to pay taxes, and any net cash award could be used to pay taxes on vesting restricted stock awards.

The 2006 cash-based performance grants have a two-year term, with two equally weighted goals: (1) our total shareholder return (TSR) for the 21 month period ended December 31, 2007, relative to the TSR of a group of industry peers selected by the CGN Committee; and (2) return on invested capital (ROIC) for the two-year period ended December 31, 2007.

For the performance grants which were awarded in April 2006, the 2006 peer group was adjusted, with NiSource, Inc. and PPL Corporation added to the peer group, and Constellation Energy Group excluded for this grant as it was a merger candidate at that time. The grants are 100% performance-based with payouts ranging from 0%-200% of target. The goals for the 2006 grant, scoring for such goals and possible payouts for the named executive officers are set forth in the Grants of Plan-Based Awards Table on page 21.

Restricted Stock Grants. Officers also received restricted stock grants on April 1, 2006. Restricted stock grants serve as a retention tool as they are forfeited upon voluntary termination and align the interests of officers with the interests of our shareholders. Officers who have not achieved their ownership targets are expected to hold vested restricted stock, net of shares used to cover taxes.

The CGN Committee approved the 2006 long-term grants based on a stated dollar value for the award based on its earlier compensation review. Restricted stock was issued for 50% of the total long-term grant value, with the number of shares issued determined by using the fair value of Dominion’s common stock the day before the date of grant (average of high and low stock price). The grants have cliff vesting at the end of the three-year restricted period and officers receive dividends on the shares during the restricted period. The full grant date fair value of each named executive officer’s 2006 restricted stock grant is disclosed in the Grants of Plan-Based Awards Table on page 21.

Vesting Terms for the 2006 Restricted Stock Grants and Performance Grants. Both grants are forfeited in their entirety if the officer voluntarily terminates his or her employment or is terminated with cause before the vesting date. The grants have pro-rata vesting for termination without cause, retirement, death or disability, rewarding the officers or their estate only for the period of time they provided services to Dominion. For the performance grants, the pro-rata payout is based on expected or actual goal performance at the end of the performance cycle.

In the event of a Change in Control* at Dominion, the restricted shares have pro-rata vesting up to the change in control date, rewarding officers only for prior service. If the officers subsequently are terminated without cause, or constructively terminate their employment, under the terms of the grant, any remaining unvested shares will vest at that point. For the cash performance grants, as any goals would likely be materially changed as a result of any Change in Control, payout of these grants will accelerate and will be equal to the greater of the target grant amount or the payout that would be made based on the assumptions used for goal performance in the company’s latest financial statements as of the day before the Change in Control occurred.

* A Change in Control occurs if (i) any person or group becomes a beneficial owner of 20% or more of the combined voting power of Dominion voting stock or (ii) as a direct or indirect result of, or in connection with, a cash tender or exchange offer, merger or other business combination, sale of assets, or contested election, the Directors constituting the Dominion Board before any such transactions cease to represent a majority of Dominion or its successor’s Board within two years after the last of such transactions.

EMPLOYEE AND EXECUTIVE BENEFITS

Dominion’s officers participate in many of the same employee benefit programs as other employees. The core employee benefit programs include two tax-qualified retirement plans, medical coverage, dental coverage, vision coverage, life insurance, disability coverage, travel accident coverage, vacation, company-paid short-term disability and long-term disability coverage. There are other miscellaneous employee benefit programs, such as flexible spending accounts, health savings accounts, employee assistance programs, employee leave policies and other incidental programs available to employees generally. Our tax-qualified retirement plans are a 401(k) plan and a defined benefit pension plan (Pension Plan). We make a matching contribution to each employee’s 401(k) plan account of 50 cents for each dollar contributed on the first 6% of compensation (up to IRS limits) if less than 20 years of service, and 67 cents for each dollar contributed on the first 6% of compensation (up to IRS limits) if the employee has at least 20 years of service. The amount of the company matching contributions under the 401(k) for the named executive officers ranged from $6,600 to $8,800. Amounts forgone due to IRS limits were paid to executives in cash and ranged from $6,495 to $23,400. All of these matching contribution amounts are shown in the All Other Compensation footnote to the Summary Compensation Table following this section. The defined benefit pension plan pays benefits under a formula that is explained in Pension Benefits and the change in pension value for 2006 is included in the Summary Compensation Table on page 20.

We also have two supplemental retirement plans for our executives. The Benefit Restoration Plan makes up for certain limits related to Pension Plan benefits imposed by the Internal Revenue Code as more fully explained in Pension Benefits on page 23. The Pension Plan and Benefit Restoration Plan pay benefits calculated on base salary. To accommodate changes in tax law, the Dominion Benefit Restoration Plan was frozen as of December 31, 2004 (Frozen BRP) and a New Benefit Restoration Plan was implemented effective January 1, 2005 (New BRP). There is no change in the total benefit provided as a result of this new plan.

The Executive Supplemental Retirement Plan provides an annual retirement benefit equal to 25% of a participant’s final cash compensation (base salary plus target annual bonus) for a period of ten years or life as more fully explained in Pension Benefits on page 23. To accommodate changes in the tax law, the Executive Supplemental Retirement Plan was frozen as of December 31, 2004 (Frozen ESRP) and a New Executive Supplemental Retirement Plan was implemented effective January 1, 2005 (New ESRP). There is no change in the ben-efit provided as a result of this new plan.

We maintain the Benefit Restoration Plan and the Executive Supplemental Retirement Plan to provide a competitive level of retirement benefits to our executives. The Pension Plan and its related Benefit Restoration Plan provide a benefit that is calculated on base salary, credited age, credited service and a social security off-set. Because a more substantial portion of our executives’ total compensation is paid as incentive compensation than for

other employees, the Pension Plan and Benefit Restoration Plan alone would not produce the same percentage of replacement income in retirement for executives as for other employees. The Executive Supplemental Retirement Plan is intended to partially make up for the limitation of these two plans due to their use of base salary only. The Executive Supplemental Retirement Plan includes bonuses in its calculations, but does not include long-term incentive compensation. As a result, a significant portion of the potential compensation for our executives is excluded from calculation in any retirement plan benefit. The present value of accumulated benefits under these plans is disclosed in the Pension Benefits Table on page 23.

We also maintain a voluntary Executive Life Insurance Program for our executives. The plan provides for whole-life insurance policies to executives with a death benefit that is a multiple (one to three times) of each executive’s base salary. This insurance is in addition to the term insurance that is provided as an employee benefit. The executive is the owner of the policy and the company will make premium payments to the later of 10 years or age 64. Executives are taxed on the value of the insurance provided by the company. The premiums for these policies are included in the All Other Compensation footnote to the Summary Compensation Table on page 20.

Perquisites. We provide perquisites for our executives that are considered reasonable and in line with market practice. In addition to incidental perquisites associated with maintaining an office, we offer the following limited number of perquisites to our executives:

Tax Gross-Up. While these perquisites are generally taxable, the company provides a tax gross-up for the limited personal use of the company plane that does occur, spousal travel or expenses for business entertainment purposes and in a limited number of cases, club memberships. As mentioned above, we are no longer paying for any clubs and therefore there will no longer be associated taxes or gross-ups on those club memberships.

Other Agreements. As a fully integrated electric and gas holding company with an E&P subsidiary, we are part of a constantly changing and increasingly competitive environment. In order to secure and retain the services and focus of key management executives, we have entered into agreements with each of our named executive officers to provide certain retirement benefits or other protections in certain circumstances, including Employment Continuity Agreements with each executive. The specific terms of these agreements are discussed in Pension Benefits and the tables under Potential Payments Upon Termination or Change in Control. Also, in connection with our strategic process and the possible divestiture of a substantial portion of our E&P assets, we entered into special employment letters with Mr. Radtke and each officer in our E&P business unit. These agreements are intended to retain our E&P management team through this process and to offer them protection and motivation to help Dominion achieve the maximum shareholder value from the process. Mr. Radtke’s agreement was entered into in January 2007, and provides him with benefits similar to those he would receive in a Change in Control as outlined on page 28. However, the final structure and specifics of any transaction will dictate whether any excise taxes will be due on these amounts.

STOCK OWNERSHIP

The CGN Committee reviews our share ownership guidelines annually, along with the ownership of the named executive officers individually and the officer group as a whole. We believe these guidelines and management’s internal policies emphasize stock ownership and retention that align management’s interests with the interests of our shareholders. Restricted stock and options do not count towards an officer’s ownership target. Each of our named executive officers has exceeded their ownership target.

Stock Ownership Guidelines. Targeted ownership levels are the lesser of the following:

Executives may participate in Dominion’s Executive Stock Purchase Tool Kit to assist them in achieving their stock ownership target levels. Participants in the Tool Kit receive “bonus shares” for 25% of the value of their investment in Dominion stock. The programs are: (i) a bonus exchange program, where goal-based stock is issued in exchange for annual incentive payouts; and (ii) a stock acquisition program, with participants making one-time or periodic purchases of company stock through Dominion Direct^®. Participation in either of the Tool Kit programs ceases once an executive reaches his or her stock ownership target level.*

Deductibility of Compensation

Under Section 162(m) of the Internal Revenue Code, we may not deduct certain forms of compensation in excess of $1 million paid to our CEO or any of the four other most highly compensated executive officers. However, certain performance-based compensation is specifically exempt from the deduction limit.

It is our intent to provide competitive executive compensation while maximizing Dominion’s tax deduction to the extent reasonable. The CGN Committee considers the Section 162(m) implications when approving certain plans and pay-outs. However, the CGN Committee reserves the right to approve, and in some cases has approved, non-deductible compensation if they believe it is in Dominion’s best interest.

Accounting for Stock-based Compensation

Effective January 1, 2006, we measure and recognize compensation expense in accordance with Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (SFAS 123R), which requires that compensation expense relating to share-based payment transactions be recognized in the financial statements based on the fair value of the equity or liability instruments issued.

Prior to January 1, 2006, we accounted for our stock-based compensation plans under the measurement and recognition provisions of Accounting Principles Board Opinion No. 25,

Accounting for Stock Issued to Employees, and related interpretations. Under this method, stock option awards generally did not result in compensation expense, since their exercise price was typically equal to the market price of our common stock on the date of grant.

The CGN Committee considers the accounting treatment of equity and performance based compensation when approving awards.

* In 1999, the Board approved Stock Purchase and Loan programs intended to encourage and facilitate executives’ ownership of common stock through the availability of loans guaranteed by Dominion. Officers borrowed money from an independent bank to purchase stock, for which they were personally liable and which Dominion guaranteed. Because of restrictions on company loans or guarantees to officers under the Sarbanes-Oxley Act of 2002, Dominion ceased these programs and as of December 31, 2006, there were no longer any loans outstanding. Mr. Radtke received subsidies under this program during 2006 until his loan was repaid in November 2006, as disclosed in the All Other Compensation footnote to the Summary Compensation Table on page 20.

Footnotes:

(a) Unless noted, the amounts in this column for all officers are comprised of the following: personal use of a company vehicle; personal use (except for Mr. McGettrick) of corporate aircraft; financial planning, health and wellness allowance; and club fees. For Messrs. Farrell and Chewning, personal use of the corporate aircraft was $36,923 and $27,303, respectively. For personal flights, all direct operating costs are included in calculating aggregate incremental cost. Direct operating costs include the following: fuel, airport fees, catering, ground transportation and crew expenses (any food, lodging and other costs). The fixed costs of owning the aircraft and employing the crew are not taken into consideration, as more than 96% of the use of the corporate aircraft is for business purposes. For Mr. Farrell, club fees were $26,555 which includes a one-time transfer fee for a corporate membership for his use while serving as CEO.

While some of the club fees are for personal memberships which may be used for business purposes, a majority of the fees reflected are for corporate memberships. Although we consider corporate club fees as a perquisite, a majority of the use of corporate club memberships is for business purposes. The aggregate

incremental cost for club fees is based on actual costs incurred. As of January 1, 2007, the company is eliminating the club perquisite program for executives, and they will be personally responsible for all dues.

In addition to these formal perquisite programs, executives may also receive some perquisites from time to time that have no incremental cost to the company. These would include (i) use of the company’s travel department for making travel arrangements that may have a personal component to them; (ii) flights on the company plane when a seat is available for the spouse or other guest of an executive; (iii) an assigned parking spot; and (iv) occasional use of their administrative assistant or other company employees for assistance with charitable, community or personal matters.

(b) Paid under the terms of the company’s 401(k) Plan.

(c) Represents payment of “lost” savings plan match due to IRS limits. This lost match was paid in cash to the named executive officers outside of the 401(k) Plan.

(d) This loan was paid off in November 2006. See footnote description under Stock Ownership Guidelines in CD&A on page 19.

(1) On March 31, 2006, the CGN Committee approved the 2006 long-term compensation awards for our officers which consisted of a restricted stock grant and a cash performance grant. The 2006 restricted stock award was granted on April 1, 2006. Under our 2005 Incentive Compensation Plan, fair market value is defined as the average of the high and low prices of Dominion stock as of the last day on which the stock is traded preceding the date of grant. The fair market value for the April 1, 2006 restricted stock grant was $69.53 per share and was determined by taking the average of the high and low prices of Dominion stock on March 31, 2006 (grant approval date).

(2) These amounts represent potential payouts under the 2006 Annual Incentive Plan. Actual payouts earned are reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 20. Under our annual incentive program, our officers are eligible for an annual performance-based award. The CGN Committee establishes target awards for each executive based on his or her salary level and expressed as a percentage of the individual executive’s base salary. The target award is the amount of cash that will be paid if the plan is fully funded and the executive achieves 100% of the goals established at the beginning of the year. For the 2006 Annual Incentive Plan, funding is based on the achievement of consolidated operating earnings goals with the maximum funding capped at 200%.

For our officers who are among the top most highly compensated group for 2006, which includes all of our named executive officers, payout under the 2006 Annual Incentive Plan is based solely on the achievement of the Corporate funding goal, with the CGN Committee having the discretion to lower actual payouts to ensure that such awards are consistent with those granted to other plan participants. The 2006 target percentages of base salary for our named executive officers are as follows: Thomas F. Farrell, II – 110%; Thomas N. Chewning and Duane C. Radtke – 90%; Mark F. McGettrick and Jay L. Johnson – 80%.

(3) As described in footnote (1), the long-term compensation award for our officers consisted of two components of equal value: a restricted stock grant and a performance grant. The restricted stock fully vests at the end of three years with dividends paid during the restricted period at the same rate declared by Dominion for all shareholders. The restricted stock award also provides for pro-rata vesting if an officer dies, become disabled, retires, is terminated without cause or if there is a Change in Control.

The performance grant will be paid in cash in 2008 and can range from 0% to 200% of the target award. The amount earned by our officers will depend on the level of achievement of two equally weighted metrics: 1) our total shareholder return (TSR) for the twenty-one month period ended December 31, 2007 relative to the TSR of a group of industry peers selected by the CGN Committee; and 2) return on invested capital (ROIC) for the two-year period ended December 31, 2007. The payout for TSR performance can range from 0% to 200% of the target award and will be interpolated between the following levels:

Payout for ROIC performance will range from 0% to 200% of the target award and will be interpolated between the ranges established by the CGN Committee. The performance grant also provides for some form of pro-rata payout in the event an officer retires, dies, becomes disabled, or is terminated without cause. In the event of a Change in Control, payout will accelerate and be equal to the greater of the target amount or the payout amount that would be made for the company’s goal performance based on the company’s financial statements as of the day before the Change in Control. See CD&A on page 17 for the definition of a Change in Control.

(1) All options presented in this table are fully vested and exercisable. There are no unexercisable options outstanding.

(2) Based on closing stock price of $83.84 on December 29, 2006 which was the last day of our fiscal year on which Dominion stock was traded.

(3) Shares vest on February 24, 2008.

(4) 50% of shares will vest on May 11, 2007 based on achievement of certain performance criteria; the remaining shares vest on May 11, 2009.

(5) Shares vest on April 1, 2009.

(6) Shares vested on January 26, 2007.

Footnotes:

(1) These options were exercised pursuant to a Rule 10b5-1 trading plan.

(2) These shares were acquired under the Bonus Exchange Program of the Executive Stock Purchase Tool Kit in January 2003.

(1) The years of credited service and the present value of accumulated benefits were determined by our plan actuaries, using the appropriate accrued service and pay and other assumptions similar to those used for accounting and disclosure purposes.

Dominion Pension Plan

The Dominion Pension Plan is a tax-qualified defined benefit pension plan. All executives are participants in the Pension Plan.

The Pension Plan provides unreduced retirement benefits at termination of employment at or after age 65 or, with three years of service, at age 60. Reduced retirement is available after age 55 with three years of service. For retirement between ages 55 and 60, the benefit is reduced 0.25% per month for each month after age 58 and before age 60 and 0.50% per month for each month between ages 55 and 58. All named executive officers have more than three years of service.

The Pension Plan basic benefit is calculated using a formula based on (1) age at retirement; (2) final average earnings; (3) estimated Social Security benefits; and (4) credited service. Final average earnings are the average of the participant’s 60 highest consecutive months of base pay during the last 120 months worked. Earnings are limited to the IRS maximum which was $220,000 for 2006. Bonuses are not included in base pay. Credited service is measured in months, up to a maximum of 30 years of credited service. The estimated Social Security benefit taken into account is the assumed Social Security benefit payable starting at age 65 or actual retirement date, if later, assuming that the participant has no further employment after leaving Dominion.

(2) Years of service for the qualified plan is actual years accrued from date of participation. Pre-2005 service is accrued service up to 12/31/2004. Service for the New Benefit Restoration Plan and the New Supplemental Retirement Plan is the pro-rata portion of the contractual service from date of participation.

These factors are then applied in a formula. The formula has different percentages for credited service before 2001 and after 2000. The benefit is the sum of the amounts from these two formulas.

For Credited Service before 2001:

Credited Service is limited to a total of 30 years for all parts of the formula and Credited Service after 2000 is limited to 30 years minus Credited Service before 2001.

If a vested participant does not start receiving benefit payments at termination, the participant can start receiving benefit payments at any time after age 55. For terminated vested participants (terminate employment before age 55) the early retirement reduction factors for the portion of the benefits earned

after 2000 are as follows: age 64 – 9%; age 63 – 16%; age 62 –23%; age 61 – 30%; age 60 – 35%; age 59 – 40%; age 58 –44%; age 57 – 48%; age 56 – 52%; and age 55 – 55%.

Benefit payment options are a (1) single life annuity; (2) 50% joint and survivor annuity; (3) 100% joint and survivor annuity; and (4) Social Security leveling option with any of the other three benefit forms. The normal form of benefit is the single life annuity. All of the options are actuarial equivalent to the single life annuity. The Social Security leveling option pays a larger benefit equal to the estimated Social Security benefits until the participant is age 62 and then reduced payments after age 62.

The Pension Plan also includes a Special Retirement Account (SRA), which is in addition to the pension benefit. The SRA is credited with 2% of base pay each month as well as interest based on the 30-year Treasury bond rate. The SRA can be paid in a lump sum or paid as part of an annuity with the other benefits under the Pension Plan.

Dominion Benefit Restoration Plans

Dominion sponsors the New Benefit Restoration Plan, effective as of January 1, 2005 (New BRP), and the Frozen Benefit Restoration Plan, frozen as of December 31, 2004 (Frozen BRP) which are discussed under Employee and Executive Benefits on page 18. Neither plan is tax qualified.

The Frozen BRP provides benefits accrued before 2005 that are intended to be exempt from Section 409A of the Internal Revenue Code. The New BRP was adopted to accommodate the enactment of and is intended to comply with Section 409A of the Internal Revenue Code for benefits accrued after 2004. The overall restoration benefit was not changed by adoption of the New BRP.

The restoration benefit offers an additional incentive to attract and retain talented executives for Dominion by compensating them for the reduction in their benefits under Dominion’s Pension Plan resulting from the application of limitations on compensation and benefits imposed on tax-qualified pension plans by the Internal Revenue Code.

A Dominion employee is eligible to participate in the New BRP if he or she is a member of management or a highly compensated employee and has had his or her benefit under the Dominion Pension Plan reduced or limited by the Internal Revenue Code. Dominion designates an employee to participate in the New BRP. The Frozen BRP has been closed to new participants since December 31, 2004. A participant remains a participant in either plan until he or she ceases to be eligible for any reason other than retirement or until his or her status as a participant is revoked by Dominion.

Upon retirement, the New BRP provides a monthly restoration benefit equal to the monthly benefit the participant would have received under Dominion’s Pension Plan but for the limitations imposed by the Internal Revenue Code, reduced by the monthly benefit the participant actually receives under Dominion’s Pension Plan, reduced further by the monthly benefit the participant receives under the Frozen BRP. Upon retirement, the Frozen BRP provides a monthly

restoration benefit equal to the monthly benefit the participant would have received under Dominion’s Pension Plan but for the limitations imposed by the Internal Revenue Code, reduced by the monthly benefit the participant actually receives under Dominion’s Pension Plan, in each case determined as though the participant had separated from service with Dominion no later than December 31, 2004.

As discussed above, the Internal Revenue Code limits the amount of compensation that may be taken into account under a qualified retirement plan to no more than a certain amount each year. For 2006, the limit was $220,000. The Internal Revenue Code also limits the total annual benefit that may be provided to a participant under a qualified defined benefit plan. For 2006, this limitation was the lesser of (i) $175,000 or (ii) the average of the participant’s compensation during the three consecutive years in which the participant had the highest aggregate compensation.

In each plan, retirement means the participant’s termination of employment with Dominion at a time when the participant is entitled to receive benefits under Dominion’s Pension Plan. A participant who terminates employment prior to retirement is generally not entitled to a restoration benefit. However, a participant who becomes totally and permanently disabled prior to retirement or who dies prior to reaching retirement eligibility is entitled to the restoration benefit.

Dominion may grant additional months of service and years of age to participants for purposes of these plans and the supplemental retirement plans described below. Extra age and service credit is granted for mid-career recruiting and retention purposes. Mr. Farrell will be credited with 25 years of service at age 55, and will be credited with 30 years of service at age 60. Mr. Chewning has been credited with 30 years of service. Mr. Radtke will receive 20 years of credited service at age 62. Mr. McGettrick will receive 5 years of additional credited age and service at age 50. Also, if Mr. McGettrick is terminated other than for cause prior to age 50, he will be credited with the number of years needed to bridge him to 55 years of age and the additional years of service that he would have earned had he remained employed by the company until age 55. Mr. Johnson will be credited with 20 years of service once he completes 10 years of actual service. Additional age and years of service may be credited in certain situations pursuant to the terms of individual retirement agreements and arrangements for the named executive officers and is described in Potential Payments Upon Termination or Change in Control.

A participant’s accrued restoration benefit is calculated based on the default annuity form under Dominion’s Pension Plan. Under the New BRP, the restoration benefit is generally paid in the form of a single cash lump sum, unless the participant elects to receive a single life or 50% or 100% joint and survivor annuity. Under the Frozen BRP, the restoration benefit is usually paid in the form of a single cash lump sum, unless the participant elects to receive a single life or 50% or 100% joint and survivor annuity.

For purposes of these plans and the supplemental retirement plans described below, the present value of the accumulated benefit is calculated using actuarial and other factors as determined by the plan actuaries and approved by Dominion’s Administrative Benefit Committee. Actuarial assumptions used for December 31, 2006 calculations include: discount rate of 6.20%; Frozen BRP and Frozen ESRP lump sum rate of 4.85%; New BRP and New ESRP lump sum rate of 5.45%; Frozen BRP cost of living adjustment of 1.625%; and the 1994 Group Annuity Mortality tables for post-retirement only.

Dominion Executive Supplemental Retirement Plans

Dominion sponsors the New Executive Supplemental Retirement Plan, effective as of January 1, 2005 (New ESRP), and the Frozen Executive Supplemental Retirement Plan, frozen as of December 31, 2004 (Frozen ESRP) which are discussed under Employee and Executive Benefits on page 18. Neither plan is tax qualified.

The Frozen ESRP provides benefits accrued before 2005 that are intended to be exempt from Section 409A of the Internal Revenue Code. The New ESRP was adopted specifi-cally to accommodate the enactment of and is intended to comply with Section 409A of the Internal Revenue Code for benefits accrued after 2004. The overall supplemental retirement benefit was not changed by adoption of the New ESRP.

The supplemental retirement benefit offers an additional incentive to attract and retain talented executives for Dominion. In light of the competitive industry in which it does business, Dominion feels that the normal pension plan benefit (even as increased by the restoration benefit) is insuffi-cient to fulfill this purpose on its own.

Any elected officer of the company is eligible to participate in the New ESRP. Dominion designates an officer to participate. The Frozen ESRP has been closed to new participants since December 31, 2004. A participant remains a participant in either plan until he or she ceases to be an elected officer or until participation is revoked by Dominion.

The New ESRP provides for an annual retirement benefit equal to 25% of a participant’s final cash compensation, based on his or her compensation and subject to age and years of service as of retirement, reduced by the annual retirement benefit provided under the Frozen ESRP. The Frozen ESRP provides for an annual retirement benefit equal to 25% of a participant’s final cash compensation, based on his or her compensation and subject to age and years of service as of December 31, 2004. The retirement benefit is only payable for ten years unless Dominion designates the participant to receive lifetime benefits as described below.

A participant’s final cash compensation includes, as of the relevant determination date, the participant’s annual rate of base salary then in effect plus the target amount payable under the company’s annual incentive plan for the year in which the determination is made. Final cash compensation does not include the value of equity awards, gains from the exercise of stock options, long-term cash incentive awards, perquisites or any other form of compensation.

A participant in either plan is entitled to the full retirement benefit if he or she separates from service with Dominion after reaching age 55 and achieving 60 months of service. Months of service generally include any months of service with Dominion, except that, for new participants who join the New ESRP on or after December 1, 2006, months of service only include months of service with Dominion while a participant in the New ESRP. Current named executive officers who are entitled to a full ESRP retirement benefit are: Messrs. Chewning, Radtke and Johnson.

A participant who separates from service with Dominion with at least 60 months of service but who has not yet reached age 55 is entitled to a reduced retirement benefit, calculated by multiplying the full retirement benefit described above by a fraction, the numerator of which equals the participant’s total number of months of service since becoming a participant, and the denominator of which equals the total number of months between the date the participant became a participant and age 55. Partial months are disregarded in this calculation. Mr. Farrell and Mr. McGettrick are the only named executive officers who are not entitled to a full retirement benefit. See the discussion above regarding additional months of service and years of age.

A participant who separates from service with Dominion with less than 60 months of service is generally not entitled to a retirement benefit. However, a participant who becomes totally and permanently disabled prior to separation from service is entitled to a full retirement benefit, regardless of age or months of service. In addition, the beneficiary of a participant who dies prior to reaching retirement eligibility is entitled to the participant’s full retirement benefit.

A participant’s accrued retirement benefit is initially calculated as an annual amount payable in monthly installments for a period of 120 months. However, the New ESRP allows Dominion to designate certain participants as eligible for a retirement benefit for their lifetimes. Messrs. Farrell and Chewning will receive this benefit for their lifetime. Mr. Radtke will receive this benefit for his lifetime if employed with the company at age 62, and Mr. McGettrick if employed with the company at age 60. Mr. Johnson will receive this benefit for his lifetime after he has completed 10 years of actual service with Dominion.

Under the New ESRP, the retirement benefit is generally paid in the form of a single cash lump sum unless a participant (other than a lifetime participant) elects monthly installment payments guaranteed for 120 months or a lifetime participant elects a single life annuity with 120 guaranteed monthly payments. Under the Frozen ESRP, the retirement benefit is usually paid in the form of a single cash lump sum unless the participant elects monthly installments guaranteed for 120 months, or unless a lifetime participant elects a single life annuity with 120 guaranteed monthly payments.

NONQUALIFIED DEFERRED COMPENSATION

Dominion does not currently offer any nonqualified deferred compensation plans to its officers or other employees. The Aggregate Balance at Last FYE column includes salary and bonus deferrals, lost company savings plan match and vested restricted stock which would have been reported in prior years’ Summary Compensation Tables.

The Nonqualified Deferred Compensation Table reflects, in aggregate, the plan balances for two former plans offered to Dominion officers and other highly compensated employees: The Dominion Resources, Inc. Executives’ Deferred Compensation Plan, which was amended and restated as of December 31, 2004 to “freeze” the plan as of that date (Frozen Deferred Compensation Plan); and The Dominion Resources, Inc. Security Option Plan, which was amended and restated effective December 31, 2004 to “freeze” the plan as of that date (Frozen DSOP). While the Frozen DSOP was not a deferred compensation plan, but an option plan, we are including information regarding the plan and any balances under the plan in this table to make full disclosure about possible future payments to officers under the employee benefit plans.

The Frozen Deferred Compensation Plan includes amounts previously deferred from one of the following categories of compensation: (i) salary; (ii) bonus; (iii) vesting restricted stock; and (iv) gains from stock option exercises. The plan also provided for company contributions of lost company savings plan match contributions and transfers from several CNG deferred compensation plans. The Frozen Deferred Compensation Plan provides for 28 investment funds for the plan balances, including a Dominion Stock Fund. Participants may change investment elections on any business day. Any vesting restricted stock and gain from stock option exercises that were deferred are kept in the Dominion Stock Fund. Earnings are calculated based on the performance of the underlying investment fund. No preferential earnings are paid, and therefore no earnings from these plans are included in the Summary Compensation Table on page 20.

The named executive officers invested in the following funds which had rates of returns for 2006 as noted below. Except for the Dominion Fixed Income Fund, all of the funds have the same rate of returns as corresponding publicly available mutual funds.

The Dominion Fixed Income Fund is an option that provides a fixed return rate set prior to the beginning of the year. The investment management department of Dominion determines the rate based on its estimate of the rate of return on Dominion assets in the trust for the Frozen Deferred Compensation Plan.

Under the terms of the Frozen Deferred Compensation Plan, participants have the ability to change their distribution schedule for benefits under the plan with six months notice to the plan administrator. Participants may elect the following Benefit Commencement Dates:

The default Benefit Commencement Date is February after the year in which the participant retires. Participants may elect multiple Benefit Commencement Dates; however, all new elections must be made at least six months before an existing Benefit Commencement Date. Withdrawals less than six months prior to an existing Benefit Commencement Date are subject to a 10% early withdrawal penalty. Account balances must be fully paid out no later than February 28, ten calendar years after a participant retires or becomes disabled. If a participant retires from the company, he or she may continue to defer an account balance provided that the total balance is distributed by this deadline. In the event of termination of employment, for reasons other than death, disability or retirement, before an elected Benefit Commencement Date, benefit payments will be distributed in a lump sum as soon as administratively practicable. Hardship distributions, prior to an elected Benefit Commencement Date, are available under certain limited circumstances.

Participants may elect to have their benefit paid in a lump sum payment or equal annual installments over a period of whole years from 1 to 10 years. Once they begin receiving annual installment payments, they can make a one-time election to either 1) receive their remaining account balance in the form of a lump sum distribution or 2) change their remaining installment payment period. Any election must be approved by the company before it is effective. All distributions are made in cash with the exception of the Deferred Restricted Stock Account and the Deferred Stock Option Account, which are distributed in the form of Dominion common stock.

The Frozen DSOP enabled employees to defer all or a portion of their salary and bonus and receive options on various mutual funds. Participants also received lost company matching contributions to the savings plan in the form of options under this plan. DSOP Options can be exercised at any time before their expiration date. On exercise, the participant receives the excess of the value, if any, of the underlying mutual funds over the strike price. The participant can currently choose among options on 26 mutual funds, and there is not a Dominion stock alternative nor a fixed income fund. Participants may change options among the mutual funds on any business day. Benefits grow/decline based on the total

return of the mutual funds selected. Any options that expire do not have any value. Options expire under the following terms:

The named executive officers held options on the following

publicly available mutual funds which had the rates of returns for 2006 as noted below.