Dominion Resources Inc. and Consolidated Natural Gas Co. (CNG)have agreed to sell CNG’s Virginia Natural Gas (VNG) distributionsubsidiary in exchange for Virginia regulators’ support for theirproposed merger.

Under the terms of the agreement with the Virginia StateCorporation Commission (SCC), Dominion Resources will have one yearfollowing the completion of the merger to sell VNG to a thirdparty. If the sale is not completed by then, VNG is to be spun offas an independent company with the common stock being distributedto Dominion Resources’ shareholders. The deadlines are subject to”reasonable” extensions granted by the SCC.

The SCC imposed this condition – the sale of VNG – on itsapproval of the merger because VNG, which serves about 223,00 gascustomers in Virginia, is the only area where the utility serviceterritories of Dominion Resources and CNG overlap.

The Dominion Resources-CNG transaction already has been approvedby regulators in Pennsylvania and West Virginia. It still requiresclearances from Virginia and North Carolina regulators, and severalfederal agencies.

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