AGREEMENT BETWEEN

PJM INTERCONNECTION, L.L.C.,

AND

VIRGINIA ELECTRIC AND POWER COMPANY

(PJM SOUTH TRANSMISSION OWNER AGREEMENT)

The following sheets reflect all revisions approved by FERC in orders issued through March 30, 2005 and compliance filings through April 4, 2005.

PJM SOUTH TRANSMISSION OWNER AGREEMENT

This SOUTH TRANSMISSION OWNER AGREEMENT dated as of the 11th day of May, 2004, is made by and between Virginia Electric and Power Company (Dominion Virginia Power) and PJM Interconnection, L.L.C. (hereinafter, PJM) (hereinafter referred to collectively as the Parties and individually as a Party).

WITNESSETH:

1. Under an order dated November 25, 1997, and subsequent orders, the FERC approved the PJM Open Access Transmission Tariff and various filings and agreements, and amendments thereto, under which, as an Independent System Operator (ISO), PJM provides transmission and related services, including the administration of electricity markets and related financial instruments, consistent with the requirements of FERC Order No. 888, Promoting Wholesale Competition Through Open-Access Non-discriminatory Transmission Services By Public Utilities, 1991-96 FERC Stats. & Regs., Regs. Preambles 31,036 (1996). Under the November 25, 1997 FERC order and other orders, the PJM Tariff, and various agreements and amendments thereto approved therein, PJM has served as the ISO for the transmission systems owned by certain owners of transmission facilities subject to PJMs functional control (all or parts of Pennsylvania, New Jersey, Maryland, Delaware, Virginia, West Virginia, Ohio, and Washington, D.C.). On December 20, 2002, PJM received approval from FERC as the Regional Transmission Organization (RTO) within the meaning of Regional Transmission Organizations, III FERC Stats. & Regs., Regs. Preambles 31,089 (1999), on rehg, III FERC Stats. & Regs., Regs. Preambles 31,092 (2000) (hereinafter Order 2000) for the MAAC Control Zone and the PJM West Region.

2. Dominion Virginia Power, the South Transmission Owner, owns, controls or leases transmission facilities outside the MAAC Control Zone which, as of the effective date of this Agreement are not subject to control by any ISO or RTO. Dominion Virginia Power has determined, under the terms and conditions of this Agreement and the Operating Agreement, as defined herein and as amended to implement this Agreement to transfer functional control of its transmission facilities to PJM to enable PJM (a) to serve as the RTO of its transmission facilities (such facilities comprising the PJM South Region as defined herein), (b) to administer the terms and conditions of the PJM Tariff, as amended to implement this Agreement, (c) to provide for the distribution of revenue received from charges thereunder in accordance with this Agreement and the PJM Tariff, and (d) to develop and maintain the Regional Transmission Expansion Plan with respect to facilities in the PJM South Region.

3. The Parties intend to commence performance under this Agreement by November 1, 2004, subject to requisite regulatory approvals, vendor availability, and other factors outside the Parties control.

4. Dominion Virginia Power may establish an Independent Transmission Company within the meaning of Order 2000 or other FERC order and, subject to FERC approval, may desire to transfer certain rights and obligations pertaining to its transmission facilities from PJM to the Independent Transmission Company, while PJM continues to perform certain functions, including administration of markets.

NOW THEREFORE, in consideration of the foregoing and the mutual covenants and promises made herein, the Parties agree as follows:

ARTICLE 1 DEFINITIONS

Unless the context otherwise specifies or requires, capitalized terms used herein shall have the respective meanings assigned herein for all purposes of this Agreement (such definitions to be equally applicable to both the singular and the plural forms of the terms defined). Unless otherwise specified, all references herein to Articles or Sections are to Articles or Sections of this Agreement. As used in this Agreement:

1.1 Administrative Committee shall consist of (a) the Administrative Committee established under the East TOA, (b) the Administrative Committee established under the West TOA, and (c) Dominion Virginia Power.

1.1A Agreement shall mean this South Transmission Owner Agreement, as it may be amended from time to time.

1.2 Affiliate shall have the same meaning as in the Operating Agreement.

1.3 Applicable Regional Reliability Council shall mean the reliability council under 202 of the Federal Power Act, the rules of procedures of which, pursuant to written agreement, a Member has agreed to be bound.

1.4 Control Area shall have the same meaning as in the Operating Agreement.

1.5 Control Zone shall have the same meaning as in the Operating Agreement.

1.5A East Transmission Owners Agreement shall have the meaning given in the Operating Agreement.

Filed to comply with order of the Federal Energy Regulatory Commission, Docket No. ER04-829, et al., issued October 5, 2004, 109 FERC 61,012.

1.6 FERC shall mean the Federal Energy Regulatory Commission, or any successor agency, commission or department exercising jurisdiction over this Agreement.

1.7 Good Utility Practice shall mean any of the practices, methods, and acts engaged in or approved by a significant portion of the electric utility industry during the relevant time period, or any of the practices, methods, and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good business practices, reliability, safety and expedition. Good Utility Practice is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather is intended to include acceptable practices, methods, and acts generally accepted in the region.

Filed to comply with order of the Federal Energy Regulatory Commission, Docket No. ER04-829, et al., issued October 5, 2004, 109 FERC 61,012.

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