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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2008

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission file number 000-50039





OLD DOMINION ELECTRIC COOPERATIVE

(Exact Name of Registrant as Specified in
Its Charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|VIRGINIA                                                       |  | 23-7048405                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|4201 Dominion Boulevard, Glen Allen, Virginia                  |  | 23060                               
|(Address of Principal Executive Offices)                       |  | (Zip Code)                          

(804) 747-0592

(Registrants Telephone Number, Including Area Code)





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

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions
of larger accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                         |  |   |  |                           |  |  
|------------------------ |  | - |  | ------------------------- |  | -
|Larger accelerated filer |  |  ̈ |  | Accelerated filer         |  |  ̈
|                         |  |   | 
|Non-accelerated filer    |  | x |  | Smaller reporting company |  |  ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x

The Registrant is a membership corporation and has no authorized or outstanding equity securities.









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OLD DOMINION ELECTRIC COOPERATIVE

INDEX



|                              |  |                                                                                                                                                |  |           
|----------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------
|                              |  |                                                                                                                                                |  | PageNumber
|PART I. Financial Information |  |                                                                                                                                               
|                              |  |                                                                                                                                               
|Item 1.                       |  | Financial Statements                                                                                                                           |  |           
|                              |  |                                                                                                                                               
|                              |  | Condensed Consolidated Balance Sheets  June 30, 2008 (Unaudited) and December 31, 2007                                                        |  | 3         
|                              |  |                                                                                                                                               
|                              |  | Condensed Consolidated Statements of Revenues, Expenses and Patronage Capital (Unaudited)  Three and Six Months Ended
 June 30, 2008 and 2007 |  | 4         
|                              |  |                                                                                                                                               
|                              |  | Condensed Consolidated Statements of Comprehensive Income (Unaudited) - Three and Six Months Ended June 30, 2008 and 2007                      |  | 4         
|                              |  |                                                                                                                                               
|                              |  | Condensed Consolidated Statements of Cash Flows (Unaudited)  Six Months Ended June 30, 2008 and
2007                                          |  | 5         
|                              |  |                                                                                                                                               
|                              |  | Notes to Condensed Consolidated Financial Statements                                                                                           |  | 6         
|                              |  |                                                                                                                                               
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                          |  | 8         
|                              |  |                                                                                                                                               
|Item 3.                       |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                     |  | 16        
|                              |  |                                                                                                                                               
|Item 4.                       |  | Controls and Procedures                                                                                                                        |  | 16        
|                              | 
|PART II. Other Information    |  |                                                                                                                                               
|                              |  |                                                                                                                                               
|Item 1.                       |  | Legal Proceedings                                                                                                                              |  | 17        
|                              |  |                                                                                                                                               
|Item 1A.                      |  | Risk Factors                                                                                                                                   |  | 17        
|                              |  |                                                                                                                                               
|Item 5.                       |  | Other Information                                                                                                                              |  | 18        
|                              |  |                                                                                                                                               
|Item 6.                       |  | Exhibits                                                                                                                                       |  | 19        



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OLD DOMINION ELECTRIC COOPERATIVE

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEETS



|                                                |  |                |           |   |                  |   |           |  
|----------------------------------------------- |  | -------------- | --------- | - | ---------------- | - | --------- | -
|                                                |  | June 30,2008   |           |   | December 31,2007 |  
|                                                |  | (in thousands) |          
|                                                |  | (unaudited)    |           |   |                  |  
|ASSETS:                                         |  |                |           |   |                  |   |           |  
|Electric Plant:                                 |  |                |           |   |                  |   |           |  
|In service                                      |  | $              | 1,557,096 |   |                  | $ | 1,541,970 |  
|Less accumulated depreciation                   |  |                | (574,918  | ) |                  |   | (546,879  | )
|                                                |  |                |           |   |                  |   |           |  
|                                                |  |                | 982,178   |   |                  |   | 995,091   |  
|Nuclear fuel, at amortized cost                 |  |                | 10,713    |   |                  |   | 13,869    |  
|Construction work in progress                   |  |                | 31,922    |   |                  |   | 22,767    |  
|                                                |  |                |           |   |                  |   |           |  
|Net Electric Plant                              |  |                | 1,024,813 |   |                  |   | 1,031,727 |  
|                                                |  |                |           |   |                  |   |           |  
|Investments:                                    |  |                |           |   |                  |   |           |  
|Nuclear decommissioning trust                   |  |                | 87,292    |   |                  |   | 94,408    |  
|Lease deposits                                  |  |                | 186,836   |   |                  |   | 183,559   |  
|Unrestricted investments and other              |  |                | 71,963    |   |                  |   | 56,302    |  
|                                                |  |                |           |   |                  |   |           |  
|Total Investments                               |  |                | 346,091   |   |                  |   | 334,269   |  
|                                                |  |                |           |   |                  |   |           |  
|Current Assets:                                 |  |                |           |   |                  |   |           |  
|Cash and cash equivalents                       |  |                | 144,960   |   |                  |   | 101,813   |  
|Deposits by counterparties                      |  |                | 48,850    |   |                  |   |          |  
|Accounts receivable                             |  |                | 16,049    |   |                  |   | 13,073    |  
|Accounts receivable-members                     |  |                | 99,701    |   |                  |   | 94,011    |  
|Fuel, materials and supplies                    |  |                | 34,772    |   |                  |   | 21,862    |  
|Deferred energy                                 |  |                | 12,729    |   |                  |   | 21,091    |  
|Prepayments                                     |  |                | 2,844     |   |                  |   | 3,593     |  
|                                                |  |                |           |   |                  |   |           |  
|Total Current Assets                            |  |                | 359,905   |   |                  |   | 255,443   |  
|                                                |  |                |           |   |                  |   |           |  
|Deferred Charges:                               |  |                |           |   |                  |   |           |  
|Regulatory assets                               |  |                | 40,487    |   |                  |   | 33,886    |  
|Other                                           |  |                | 29,758    |   |                  |   | 16,422    |  
|                                                |  |                |           |   |                  |   |           |  
|Total Deferred Charges                          |  |                | 70,245    |   |                  |   | 50,308    |  
|                                                |  |                |           |   |                  |   |           |  
|Total Assets                                    |  | $              | 1,801,054 |   |                  | $ | 1,671,747 |  
|                                                |  |                |           |   |                  |   |           |  
|CAPITALIZATION AND LIABILITIES:                 |  |                |           |   |                  |   |           |  
|Capitalization:                                 |  |                |           |   |                  |   |           |  
|Patronage capital                               |  | $              | 315,006   |   |                  | $ | 309,112   |  
|Non-controlling interest                        |  |                | 12,172    |   |                  |   | 11,431    |  
|Long-term debt                                  |  |                | 788,865   |   |                  |   | 787,028   |  
|                                                |  |                |           |   |                  |   |           |  
|Total Capitalization                            |  |                | 1,116,043 |   |                  |   | 1,107,571 |  
|                                                |  |                |           |   |                  |   |           |  
|Current Liabilities:                            |  |                |           |   |                  |   |           |  
|Long-term debt due within one year              |  |                | 29,667    |   |                  |   | 29,667    |  
|Accounts payable                                |  |                | 110,500   |   |                  |   | 89,855    |  
|Accounts payable-members                        |  |                | 69,887    |   |                  |   | 68,598    |  
|Accounts payable-deposits due to counterparties |  |                | 48,917    |   |                  |   |          |  
|Accrued expenses                                |  |                | 57,461    |   |                  |   | 49,079    |  
|                                                |  |                |           |   |                  |   |           |  
|Total Current Liabilities                       |  |                | 316,432   |   |                  |   | 237,199   |  
|                                                |  |                |           |   |                  |   |           |  
|Deferred Credits and Other Liabilities:         |  |                |           |   |                  |   |           |  
|Asset retirement obligation                     |  |                | 60,284    |   |                  |   | 58,742    |  
|Obligations under long-term leases              |  |                | 186,592   |   |                  |   | 183,567   |  
|Regulatory liabilities                          |  |                | 92,073    |   |                  |   | 53,653    |  
|Other                                           |  |                | 29,630    |   |                  |   | 31,015    |  
|                                                |  |                |           |   |                  |   |           |  
|Total Deferred Credits and Other Liabilities    |  |                | 368,579   |   |                  |   | 326,977   |  
|                                                |  |                |           |   |                  |   |           |  
|Commitments and Contingencies                   |  |                |          |   |                  |   |          |  
|                                                |  |                |           |   |                  |   |           |  
|Total Capitalization and Liabilities            |  | $              | 1,801,054 |   |                  | $ | 1,671,747 |  
|                                                |  |                |           |   |                  |   |           |  

The accompanying notes are an integral part of the condensed consolidated financial statements.



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OLD DOMINION ELECTRIC COOPERATIVE

CONDENSED CONSOLIDATED STATEMENTS OF REVENUES,

EXPENSES AND PATRONAGE CAPITAL (UNAUDITED)



|                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|----------------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                            |  | Three Months EndedJune 30, |         |   | Six Months EndedJune 30, |  
|                                                            |  | 2008                       |         |   | 2007                     |   |         | 2008 |  |   | 2007    |  
|                                                            |  | (in thousands)             |         |   | (in thousands)           |  
|Operating Revenues                                          |  | $                          | 239,141 |   |                          | $ | 226,619 |      |  | $ | 498,376 |   |  | $ | 455,329 |  
|                                                            |  |                            |         |  
|Operating Expenses:                                         |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Fuel                                                        |  |                            | 35,847  |   |                          |   | 29,424  |      |  |   | 71,517  |   |  |   | 62,517  |  
|Purchased power                                             |  |                            | 151,458 |   |                          |   | 139,140 |      |  |   | 326,423 |   |  |   | 305,456 |  
|Deferred energy                                             |  |                            | 5,420   |   |                          |   | 9,213   |      |  |   | 8,362   |   |  |   | (6,906  | )
|Operations and maintenance                                  |  |                            | 9,342   |   |                          |   | 12,961  |      |  |   | 17,057  |   |  |   | 22,937  |  
|Administrative and general                                  |  |                            | 9,120   |   |                          |   | 8,521   |      |  |   | 19,125  |   |  |   | 16,613  |  
|Depreciation, amortization and decommissioning              |  |                            | 9,668   |   |                          |   | 9,407   |      |  |   | 19,303  |   |  |   | 18,824  |  
|Amortization of regulatory asset/(liability), net           |  |                            | 140     |   |                          |   | 712     |      |  |   | (310    | ) |  |   | 893     |  
|Accretion of asset retirement obligations                   |  |                            | 771     |   |                          |   | 733     |      |  |   | 1,542   |   |  |   | 1,465   |  
|Taxes other than income taxes                               |  |                            | 1,918   |   |                          |   | 1,804   |      |  |   | 3,858   |   |  |   | 3,634   |  
|                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Total Operating Expenses                                    |  |                            | 223,684 |   |                          |   | 211,915 |      |  |   | 466,877 |   |  |   | 425,433 |  
|                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Operating Margin                                            |  |                            | 15,457  |   |                          |   | 14,704  |      |  |   | 31,499  |   |  |   | 29,896  |  
|                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Other (Expense)/Income, net                                 |  |                            | (33     | ) |                          |   | (18     | )    |  |   | (119    | ) |  |   | (61     | )
|Investment Income                                           |  |                            | 2,597   |   |                          |   | 3,625   |      |  |   | 4,924   |   |  |   | 6,633   |  
|Interest Charges, net                                       |  |                            | (14,514 | ) |                          |   | (15,201 | )    |  |   | (29,215 | ) |  |   | (30,287 | )
|                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net Margin Before Income Taxes and Non-Controlling Interest |  |                            | 3,507   |   |                          |   | 3,110   |      |  |   | 7,089   |   |  |   | 6,181   |  
|Income Taxes                                                |  |                            | (219    | ) |                          |   | (17     | )    |  |   | (454    | ) |  |   | (25     | )
|Non-Controlling Interest                                    |  |                            | (356    | ) |                          |   | (36     | )    |  |   | (741    | ) |  |   | (66     | )
|                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net Margin                                                  |  |                            | 2,932   |   |                          |   | 3,057   |      |  |   | 5,894   |   |  |   | 6,090   |  
|Patronage Capital - Beginning of Period                     |  |                            | 312,074 |   |                          |   | 296,110 |      |  |   | 309,112 |   |  |   | 293,077 |  
|                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Patronage Capital - End of Period                           |  | $                          | 315,006 |   |                          | $ | 299,167 |      |  | $ | 315,006 |   |  | $ | 299,167 |  
|                                                            |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  

OLD DOMINION ELECTRIC COOPERATIVE

CONDENSED CONSOLIDATED STATEMENTS

OF COMPREHENSIVE INCOME (UNAUDITED)



|                                                           |  |                            |       |                          |   |       |  |      |       |  |   |       |  
|---------------------------------------------------------- |  | -------------------------- | ----- | ------------------------ | - | ----- |  | ---- | ----- |  | - | ----- | -
|                                                           |  | Three Months EndedJune 30, |       | Six Months EndedJune 30, |  
|                                                           |  | 2008                       |       | 2007                     |   | 2008  |  | 2007 |      
|                                                           |  | (in thousands)             |       | (in thousands)           |  
|Net Margin                                                 |  | $                          | 2,932 |                          | $ | 3,057 |  | $    | 5,894 |  | $ | 6,090 |  
|Other Comprehensive Income:                                |  |                            |       |                          |   |       |  |      |       |  |   |       |  
|Unrealized (loss) on derivative contracts(1)               |  |                            |      |                          |   |      |  |      |      |  |   | (435  | )
|                                                           |  |                            |       |                          |   |       |  |      |       |  |   |       |  
|Other Comprehensive Income Before Non-controlling interest |  |                            | 2,932 |                          |   | 3,057 |  |      | 5,894 |  |   | 5,655 |  
|Less: Non-controlling interest in comprehensive income     |  |                            |      |                          |   |      |  |      |      |  |   | 435   |  
|                                                           |  |                            |       |                          |   |       |  |      |       |  |   |       |  
|Comprehensive income                                       |  | $                          | 2,932 |                          | $ | 3,057 |  | $    | 5,894 |  | $ | 6,090 |  
|                                                           |  |                            |       |                          |   |       |  |      |       |  |   |       |  



|(1) | Unrealized (loss) on derivative contracts net of taxes of $0.3 million for the six months ended June 30, 2007.
|--- | --------------------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of the condensed consolidated financial statements.



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OLD DOMINION ELECTRIC COOPERATIVE

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)



|                                                                                   |  |                          |         |   |      |   |          |  
|---------------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ---- | - | -------- | -
|                                                                                   |  | Six Months EndedJune 30, |        
|                                                                                   |  | 2008                     |         |   | 2007 |  
|                                                                                   |  | (in thousands)           |        
|Operating Activities:                                                              |  |                          |         |   |      |   |          |  
|Net Margin                                                                         |  | $                        | 5,894   |   |      | $ | 6,090    |  
|Adjustments to reconcile net margins to net cash provided by operating activities: |  |                          |         |   |      |   |          |  
|Depreciation, amortization and decommissioning                                     |  |                          | 19,303  |   |      |   | 18,823   |  
|Other non-cash charges                                                             |  |                          | 6,784   |   |      |   | 4,874    |  
|Non-controlling interest                                                           |  |                          | 741     |   |      |   | 66       |  
|Amortization of lease obligations                                                  |  |                          | 6,078   |   |      |   | 5,779    |  
|Interest on lease deposits                                                         |  |                          | (6,000  | ) |      |   | (5,628   | )
|Change in current assets                                                           |  |                          | (69,677 | ) |      |   | 26,625   |  
|Change in deferred energy                                                          |  |                          | 8,362   |   |      |   | (6,906   | )
|Change in current liabilities                                                      |  |                          | 79,233  |   |      |   | 35,970   |  
|Change in regulatory assets and liabilities                                        |  |                          | 40,167  |   |      |   | 13,378   |  
|Deferred charges and credits                                                       |  |                          | (13,341 | ) |      |   | (1,223   | )
|                                                                                   |  |                          |         |   |      |   |          |  
|Net Cash Provided by Operating Activities                                          |  |                          | 77,544  |   |      |   | 97,848   |  
|                                                                                   |  |                          |         |   |      |   |          |  
|Financing Activities:                                                              |  |                          |         |   |      |   |          |  
|Obligations under long-term leases                                                 |  |                          | (330    | ) |      |   | (275     | )
|                                                                                   |  |                          |         |   |      |   |          |  
|Net Cash Used for Financing Activities                                             |  |                          | (330    | ) |      |   | (275     | )
|                                                                                   |  |                          |         |   |      |   |          |  
|Investing Activities:                                                              |  |                          |         |   |      |   |          |  
|Purchases of available for sale securities                                         |  |                          | (45,800 | ) |      |   | (203,134 | )
|Proceeds from sale of available for sale securities                                |  |                          | 23,600  |   |      |   | 165,054  |  
|Decrease in other investments                                                      |  |                          | 5,308   |   |      |   | 7,323    |  
|Electric plant additions                                                           |  |                          | (11,869 | ) |      |   | (10,249  | )
|Acquisition of transmission assets                                                 |  |                          | (5,306  | ) |      |   |         |  
|                                                                                   |  |                          |         |   |      |   |          |  
|Net Cash Used for Investing Activities                                             |  |                          | (34,067 | ) |      |   | (41,006  | )
|                                                                                   |  |                          |         |   |      |   |          |  
|Net Change in Cash and Cash Equivalents                                            |  |                          | 43,147  |   |      |   | 56,567   |  
|Cash and Cash Equivalents - Beginning of Period                                    |  |                          | 101,813 |   |      |   | 52,018   |  
|                                                                                   |  |                          |         |   |      |   |          |  
|Cash and Cash Equivalents - End of Period                                          |  | $                        | 144,960 |   |      | $ | 108,585  |  
|                                                                                   |  |                          |         |   |      |   |          |  

The accompanying notes are an integral part of the condensed consolidated financial statements.



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OLD DOMINION ELECTRIC COOPERATIVE

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS



|1. | In the opinion of our management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, which include only normal recurring adjustments,
necessary for a fair statement of our consolidated financial position as of June 30, 2008, and our consolidated results of operations, comprehensive income, and cash flows for the three and six months ended June 30, 2008 and 2007. The
consolidated results of operations for the three and six months ended June 30, 2008, are not necessarily indicative of the results to be expected for the entire year. These financial statements should be read in conjunction with the financial
statements and notes thereto included in our 2007 Annual Report on Form 10-K filed with the Securities and Exchange Commission.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. | Presentation. The accompanying financial statements reflect the consolidated accounts of Old Dominion Electric Cooperative (ODEC  or we or
our) and TEC Trading, Inc. (TEC). We are a not-for-profit wholesale power supply cooperative, incorporated under the laws of the Commonwealth of Virginia in 1948. We have two classes of members. Our Class A members are
twelve customer-owned electric distribution cooperatives engaged in the retail sale of power to member consumers located in Virginia, Delaware, Maryland, and parts of West Virginia. Our sole Class B member is TEC, a taxable corporation owned by
our member distribution cooperatives. Our board of directors is composed of two representatives from each of the member distribution cooperatives and one representative from TEC.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In accordance with Financial Accounting Standards Board (FASB) Interpretation No. 46R, Consolidation of Variable Interest Entities,
an Interpretation of Accounting Research Bulletin No. 51 (the Interpretation), TEC is considered a variable interest entity for which we are the primary beneficiary. We have eliminated all intercompany balances and
transactions in consolidation. The assets and liabilities and non-controlling interest of TEC are recorded at carrying value and the net assets consolidated were $12.2 million and $11.4 million at June 30, 2008, and December 31, 2007,
respectively. As TEC is 100% owned by our twelve member distribution cooperatives, its equity is presented as a non-controlling interest in our consolidated financial statements. Our non-controlling, 50% or less, ownership interest in other entities
is recorded using the equity method of accounting.

Our rates are set periodically by a formula that was accepted for filing by the Federal
Energy Regulatory Commission (FERC) with an effective date of February 19, 2005, but are not regulated by the respective states public service commissions.

We comply with the Uniform System of Accounts as prescribed by FERC. In conformity with accounting principles generally accepted in the United States
(GAAP), the accounting policies and practices applied by us in the determination of rates are also employed for financial reporting purposes.

The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Actual results could differ from those
estimates.



|3. | Commitments and Contingencies.
|-- | ------------------------------

Norfolk Southern

On January 15, 2008, ODEC, Virginia Electric and Power Company (Virginia Power) and Norfolk Southern Railway Company
(Norfolk Southern) filed a stipulated calculation. A damage hearing was held on April 8, 2008, and the court took the issues presented at the hearing under advisement. On April 17, 2008, the court entered its final order in
favor of Norfolk Southern. On July 8, 2008, we, along with Virginia Power filed a petition for appeal with the Supreme Court of Virginia and on July 29, 2008, Norfolk Southern filed its brief in opposition to our petition for appeal. We
are pursuing an appeal with the Supreme Court of Virginia.

We recorded a liability related to the Norfolk Southern dispute and the current
period charges are being collected through rates. If it is ultimately determined that we owe any such amounts to Norfolk Southern, the amounts are not expected to have a material impact on our financial position or results of operations due to our
ability to collect such amounts through rates charged to our member distribution cooperatives. For further description of our legal proceedings for Norfolk Southern, see Note 15 of the Notes to Consolidated Financial Statements in our 2007 Annual
Report on Form 10-K.



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|4. | New Accounting Pronouncements.
|-- | ------------------------------

We adopted the
provision of the Financial Accounting Standards Board (FASB) Statement No. 157, Fair Value Measurements (SFAS No. 157) on January 1, 2008. SFAS No. 157 clarifies that the term fair value is
intended to mean a market-based measure, not an entity-specific measure and gives the highest priority to quoted prices in active markets in determining fair value. SFAS No. 157 requires disclosures about the extent to which companies measure
financial assets and liabilities at fair value, the methods and assumptions used to measure fair value, and the effect of fair value measures on earnings. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007.

The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis (at least annually) as of
June 30, 2008:



|                                       |  |                |         |                                                            |   |                                           |  |                                        |   |  |   |       
|-------------------------------------- |  | -------------- | ------- | ---------------------------------------------------------- | - | ----------------------------------------- |  | -------------------------------------- | - |  | - | ------
|                                       |  | June 30,2008   |         | Quoted Pricesin ActiveMarkets forIdentical Assets(Level 1) |   | SignificantOtherObservableInputs(Level 2) |  | SignificantUnobservableInputs(Level 3)
|                                       |  | (in thousands)
|Nuclear Decommissioning Trust (a)      |  | $              | 87,292  |                                                            | $ | 87,292                                    |  | $                                      |  |  | $ |      
|Unrestricted investments and other (b) |  |                | 24,027  |                                                            |   | 27                                        |  |                                        |  |  |   | 24,000
|Derivatives (c)                        |  |                | 43,574  |                                                            |   | 43,574                                    |  |                                        |  |  |   |      
|                                       |  |                |         |                                                            |   |                                           |  |                                        |   |  |   |       
|Total Financial Assets                 |  | $              | 154,893 |                                                            | $ | 130,893                                   |  | $                                      |  |  | $ | 24,000
|                                       |  |                |         |                                                            |   |                                           |  |                                        |   |  |   |       



|(a) | For additional information about our nuclear decommissioning trust see Note 7 of the Notes to Consolidated Financial Statements in our 2007 Annual Report on Form 10-K.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | Unrestricted investments and other includes investments that were available for sale. As of December 31, 2007 and June 30, 2008, we had $33.8 million of principal invested
in seven auction rate securities. As of June 30, 2008, we have an unrealized loss of $9.8 million related to these auction rate securities which is recorded as a regulatory asset in accordance with SFAS No. 71. For additional information,
see Notes 7 and 8 of the Notes to Consolidated Financial Statements in our 2007 Annual Report on Form 10-K.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | Derivatives represent natural gas futures contracts. For additional information about our derivative financial instruments, refer to Notes 1 and 4 of the Notes to Consolidated
Financial Statements in our 2007 Annual Report on Form 10-K.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In December 2007, the FASB issued FASB Statement No. 160
 Noncontrolling Interests in Consolidated Financial Statements (SFAS No. 160). SFAS No. 160 will change the presentation of non-controlling interest in our financial statements. SFAS No. 160 is effective
for us on January 1, 2009. We are in the process of evaluating the new disclosure requirements under SFAS No. 160.

In March 2008,
the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities  An Amendment of SFAS No. 133 (SFAS 161). SFAS 161 seeks to improve financial reporting for derivative instruments
and hedging activities by requiring enhanced disclosures regarding the impact on financial position, financial performance, and cash flows. To achieve this increased transparency, SFAS 161 requires (a) the disclosure of the fair value of
derivative instruments and gains and losses in a tabular format; (b) the disclosure of derivative features that are credit risk-related; and (c) cross-referencing within the footnotes. SFAS 161 is effective for us on January 1, 2009.
We are in the process of evaluating the new disclosure requirements under SFAS 161.



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##### Table of Contents

OLD DOMINION ELECTRIC COOPERATIVE

ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Caution Regarding Forward-Looking Statements

Managements Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements regarding matters that
could have an impact on our business, financial condition, and future operations. These statements, based on our expectations and estimates, are not guarantees of future performance and are subject to risks, uncertainties, and other factors that
could cause actual results to differ materially from those expressed in the forward-looking statements. These risks, uncertainties, and other factors include, but are not limited to, general business conditions, increased competition in the electric
utility industry, demand for energy, federal and state legislative and regulatory actions and legal and administrative proceedings, changes in and compliance with environmental laws and policies, general credit and capital market conditions, weather
conditions, the cost of commodities used in our industry, and unanticipated changes in operating expenses and capital expenditures. Our actual results may vary materially from those discussed in the forward-looking statements as a result of these
and other factors. Any forward-looking statement speaks only as of the date on which the statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on
which the statement is made even if new information becomes available or other events occur in the future.

Critical Accounting Policies

As of June 30, 2008, there have been no significant changes in our critical accounting policies as disclosed in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2007. These policies include the accounting for rate regulation, deferred energy, margin stabilization plan, and accounting for asset retirement obligations and derivative contracts.

Basis of Presentation

The accompanying financial
statements reflect the consolidated accounts of Old Dominion Electric Cooperative (ODEC or we or our) and TEC Trading, Inc. (TEC). See Note 2Notes to Condensed Consolidated Financial
Statements in Part 1, Item 1.

Overview

ODEC is a not-for-profit power supply cooperative owned entirely by its twelve member distribution cooperatives and a thirteenth member, TEC. We supply our member distribution cooperatives power requirements, consisting of capacity
requirements and energy requirements through a portfolio of resources including generating facilities, long-term and short-term physically-delivered forward power purchase contracts, and spot market purchases.

Our financial results for the three and six months ended June 30, 2008, were impacted by higher energy rates, changes in the fair value of our
derivative contracts, and higher capacity costs. Revenues were higher due to higher energy rates, which were implemented in October of 2007 and April of 2008 to collect previously incurred but not collected costs and to provide for the collection of
future anticipated costs. The increase in our energy rates was due to our continued rising fuel and purchased power costs and differences between actual costs incurred and anticipated future costs upon which our rates were based. Due to changing
conditions in the energy markets, the fair value of our natural gas futures contracts increased due to the timing of our forward purchases relative to the prevailing market prices at the time of those purchases. This resulted in changes to our
regulatory liabilities which increased cash provided by operating activities. Our capacity costs were higher due to the implementation of the reliability pricing model (RPM) by PJM Interconnection, LLC (PJM) on June 1,
2007.

Results of Operations

Operating Revenues

Our power sales are comprised of two power products  energy and capacity (also referred to as demand). Energy is the physical
electricity delivered through transmission and distribution facilities to customers. We must have sufficient committed energy available to us for delivery to our member distribution cooperatives to meet their maximum energy needs at any time, with
limited exceptions. This committed available energy at any time is referred to as capacity.



8



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##### Table of Contents

The rates we charge our member distribution cooperatives for sales of energy and capacity are determined
by a formulary rate accepted by the Federal Energy Regulatory Commission (FERC), which is intended to permit collection of revenues which will equal the sum of:



| |  |  | all of our costs and expenses;
| | - |  | ------------------------------



| |  |  | 20% of our total interest charges; and
| | - |  | --------------------------------------



| |  |  | additional equity contributions approved by our board of directors.
| | - |  | -------------------------------------------------------------------

The formulary rate has three main components: a demand rate, a base energy rate and a fuel factor adjustment rate. The formulary rate identifies the cost components that we can collect through rates, but not the
actual amounts to be collected. With limited minor exceptions, we can change our rates periodically to match the costs we have incurred and expect to incur without seeking FERC approval.

Energy costs, which are primarily variable costs, such as nuclear, coal and natural gas fuel costs and the energy costs under our power purchase
contracts with third parties, are recovered through two separate energy rates, the base energy rate and the fuel factor adjustment rate. The base energy rate is a fixed rate that requires FERC approval prior to adjustment. However, to the extent the
base energy rate over- or under-collects all of our energy costs, we refund or collect the difference through a fuel factor adjustment rate. We review our energy costs at least every six months to determine whether the base energy rate and the
current fuel factor adjustment rate together are adequately recovering our actual and anticipated energy costs, and revise the fuel factor adjustment rate accordingly. Since the fuel factor adjustment rate can be revised without FERC approval, we
can effectively change our total energy rate to recover all of our energy costs without seeking FERC approval.

Capacity costs, which are
primarily fixed costs, such as depreciation expense, interest expense, administrative and general expenses, capacity costs under RPM, transmission costs, and our margin requirements and additional amounts approved by our board of directors are
recovered through our demand rate. The formulary rate allows us to change the actual demand rate we charge as our capacity-related costs change, without seeking FERC approval, with the exception of decommissioning cost, which is a fixed number in
the formulary rate that requires FERC approval prior to any adjustment. FERC approval is also needed to change account classifications currently in the formula or to add accounts not otherwise included in the current formula. Additionally, future
depreciation studies are to be filed with FERC for their approval if they would result in a change in our depreciation rates. Our demand rate is revised automatically to recover the costs contained in our budget and any revisions made by our board
of directors to our budget.

Our operating revenues are derived from power sales to our member distribution cooperatives and non-members.
Our operating revenues by type of purchaser for the three and six months ended June 30, 2008 and 2007, were as follows:



|                                 |  |                            |         |                          |   |         |  |      |         |  |   |        
|-------------------------------- |  | -------------------------- | ------- | ------------------------ | - | ------- |  | ---- | ------- |  | - | -------
|                                 |  | Three Months EndedJune 30, |         | Six Months EndedJune 30,
|                                 |  | 2008                       |         | 2007                     |   | 2008    |  | 2007
|                                 |  | (in thousands)             |         | (in thousands)          
|Revenues from sales to:          |  |                            |         |                          |   |         |  |      |         |  |   |        
|Member distribution cooperatives |  | $                          | 221,130 |                          | $ | 199,436 |  | $    | 459,116 |  | $ | 408,055
|Non-members                      |  |                            | 18,011  |                          |   | 27,183  |  |      | 39,260  |  |   | 47,274 
|                                 |  |                            |         |                          |   |         |  |      |         |  |   |        
|Total revenues                   |  | $                          | 239,141 |                          | $ | 226,619 |  | $    | 498,376 |  | $ | 455,329
|                                 |  |                            |         |                          |   |         |  |      |         |  |   |        



9



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##### Table of Contents

Our energy sales in megawatt hours (MWh) to our member distribution cooperatives and
non-members for the three and six months ended June 30, 2008 and 2007, were as follows:



|                                 |  |                            |  |                          |  |           |  |          
|-------------------------------- |  | -------------------------- |  | ------------------------ |  | --------- |  | ---------
|                                 |  | Three Months EndedJune 30, |  | Six Months EndedJune 30.
|                                 |  | 2008                       |  | 2007                     |  | 2008      |  | 2007     
|                                 |  | (in MWh)                   |  | (in MWh)                
|Energy sales to:                 |  |                            |  |                          |  |           |  |          
|Member distribution cooperatives |  | 2,731,972                  |  | 2,656,031                |  | 5,940,549 |  | 5,745,010
|Non-members                      |  | 293,057                    |  | 517,948                  |  | 609,810   |  | 934,139  
|                                 |  |                            |  |                          |  |           |  |          
|Total energy sales               |  | 3,025,029                  |  | 3,173,979                |  | 6,550,359 |  | 6,679,149
|                                 |  |                            |  |                          |  |           |  |          

Our energy sales in MWh to our member distribution cooperatives were 2.9% and 3.4% higher for the
three and six months ended June 30, 2008, as compared to the same periods in 2007, as a result of the additional service territory acquired by one of our member distribution cooperatives in January of 2008.

Sales to Member Distribution Cooperatives. Revenues from sales to our member distribution cooperatives are a function of our
formulary rate for sales of power to our member distribution cooperatives and our member distribution cooperatives consumers requirements for power. Operating revenues on our Condensed Consolidated Statements of Revenues, Expenses and
Patronage Capital reflect the actual capacity-related costs we incurred plus the energy costs that we collected during the period. Estimated capacity-related costs are collected during the period through the demand component of our formulary rate.
Under our formulary rate, we make adjustments for the refund or recovery of amounts under our Margin Stabilization Plan. We adjust demand revenues and accounts payablemembers or accounts receivablemembers each quarter to reflect these
adjustments. See Critical Accounting PoliciesMargin Stabilization Plan in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

Revenues from sales to our member distribution cooperatives by formulary rate component and our average costs to our member distribution cooperatives in
MWh for the three and six months ended June 30, 2008 and 2007, were as follows:



|                                                              |  |                            |         |                          |   |         |  |      |         |  |   |        
|------------------------------------------------------------- |  | -------------------------- | ------- | ------------------------ | - | ------- |  | ---- | ------- |  | - | -------
|                                                              |  | Three Months EndedJune 30, |         | Six Months EndedJune 30,
|                                                              |  | 2008                       |         | 2007                     |   | 2008    |  | 2007
|                                                              |  | (in thousands)             |         | (in thousands)          
|Revenues from sales to member distribution cooperatives:      |  |                            |         |                          |   |         |  |      |         |  |   |        
|Base energy revenues                                          |  | $                          | 49,235  |                          | $ | 47,875  |  | $    | 106,975 |  | $ | 103,500
|Fuel factor adjustment revenues                               |  |                            | 108,986 |                          |   | 94,268  |  |      | 225,798 |  |   | 192,949
|                                                              |  |                            |         |                          |   |         |  |      |         |  |   |        
|Total energy revenues                                         |  |                            | 158,221 |                          |   | 142,143 |  |      | 332,773 |  |   | 296,449
|Demand (capacity) revenues                                    |  |                            | 62,909  |                          |   | 57,293  |  |      | 126,343 |  |   | 111,606
|                                                              |  |                            |         |                          |   |         |  |      |         |  |   |        
|Total revenues from sales to member distribution cooperatives |  | $                          | 221,130 |                          | $ | 199,436 |  | $    | 459,116 |  | $ | 408,055
|                                                              |  |                            |         |                          |   |         |  |      |         |  |   |        
|Average costs to member distribution cooperatives (per MWh)   |  | $                          | 80.94   |                          | $ | 75.09   |  | $    | 77.29   |  | $ | 71.03  

Growth in the number of consumers and growth in consumers requirements for power
significantly affect our member distribution cooperatives requirements for power. Factors affecting our member distribution cooperatives consumers requirements for power include weather, the economy, and residential and commercial
growth. See Consumers Requirements for Power in Part II, Item 7, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

Three and Six Months Ended June 30, 2008 compared to Three and Six Months ended June 30, 2007:

Total revenues from sales to our member distribution cooperatives for the three and six months ended June 30, 2008, increased $21.7 million, or 10.9%, and increased $51.1 million, or 12.5%, respectively, as
compared to the same periods in 2007 primarily as a result of our higher energy rates, increased capacity costs (which are reflected in revenues in the period in which they are expensed) and increased energy sales volume.

Our total energy rate (including our base energy rate and our fuel factor adjustment rate) was 8.2% and 8.6% higher during the three and six months ended
June 30, 2008, respectively, as compared to the same periods in 2007. We increased our fuel factor adjustment rate effective October 1, 2007, and April 1, 2008 resulting in an increase to our total energy rate of approximately 1.7%
and 6.4%, respectively. Our member distribution cooperatives energy sales volume increased 2.9% and 3.4% for the three and six months ended June 30, 2008, respectively, as compared to the same periods in 2007 primarily as a result of the
additional service territory acquired by one of our member distribution cooperatives in January of 2008.



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##### Table of Contents

The capacity costs we incurred, and thus the capacity-related revenues we reflected pursuant to the
formulary rate, increased $5.6 million, or 9.8%, and $14.7 million, or 13.2%, for the three and six months ended June 30, 2008, respectively, as compared to the same period in 2007, primarily due to increased capacity charges. The increased
capacity charges are related to PJMs implementation of RPM on June 1, 2007. The purpose of RPM is to develop a longer-term pricing program for capacity resources, as well as provide localized pricing for capacity. It is designed to reduce
capacity price volatility and the resulting investment risk to generators thus encouraging new investment in generation facilities. The value of capacity resources varies by location and RPM provides for the recognition of the locational value. We
purchased additional capacity for capacity obligations that are not met by our owned generation resources.

Our average costs to member
distribution cooperatives per MWh increased $5.85, or 7.8%, and $6.26, or 8.8%, per MWh, for the three and six months ended June 30, 2008, respectively, as compared to the same periods in 2007, primarily as a result of the increase in our
total energy rates related to increased fuel and purchased power costs. Demand (capacity) revenues increased primarily as a result of an increase in the costs we incurred related to capacity costs.

On April 8, 2008, our board of directors approved an increase to our fuel factor adjustment rate, resulting in an increase to our total energy rate
of approximately 6.4% effective April 1, 2008. This increase was implemented due to our continued rising energy costs and differences between actual costs incurred and anticipated costs upon which our rates were based.

Sales to Non-Members.Sales to non-members consist of sales of excess purchased and generated energy. We primarily sell excess energy to
PJM under its rates for providing energy imbalance services. Non-member revenue decreased by $9.2 million or 33.7%, and $8.0 million, or 17.0%, in the three and six months ended June 30, 2008, respectively, as compared to the same periods in
2007. The decrease is primarily due to a decrease in the volume of excess energy sales partially offset by an increase in the prices at which we sold excess energy to non-members. The volume of excess energy sales decreased 43.4% and 34.7% for the
three and six months ended June 30, 2008, respectively, as compared to the same periods in 2007. Excess energy is sold at the prevailing market price at the time of the sale and is the result of changes in our purchased power portfolio,
differences between actual and forecasted energy needs, as well as changes in market conditions.

Operating Expenses

We supply our member distribution cooperatives power requirements, consisting of capacity requirements and energy
requirements, through (i) our interests in electric generating facilities which consist of a 50% interest in the Clover Power Station (Clover), an 11.6% interest in the North Anna Power Station (North Anna), our Louisa
combustion turbine facility (Louisa), our Marsh Run combustion turbine facility (Marsh Run), our Rock Springs combustion turbine facility (Rock Springs), and our distributed generation facilities, and
(ii) power purchases from third parties through power purchase contracts and spot purchases of power in the open market. Our energy supply for the three and six months ended June 30, 2008 and 2007, was as follows:



|                       |  |                            |  |       |                          |  |           |      |       |   |      |           |  |       |   |  |           |  |       |  
|---------------------- |  | -------------------------- |  | ----- | ------------------------ |  | --------- | ---- | ----- | - | ---- | --------- |  | ----- | - |  | --------- |  | ----- | -
|                       |  | Three Months EndedJune 30, |  |       | Six Months EndedJune 30, | 
|                       |  | 2008                       |  |       | 2007                     |  |           | 2008 |       |   | 2007 |          
|                       |  | (in MWh and percentages)   |  |       | (in MWh and percentages) | 
|Generated:             |  |                            |  |       |                          |  |           |      |       |   |      |           |  |       |   |  |           |  |       |  
|Clover                 |  | 582,168                    |  | 19.1  | %                        |  | 735,895   |      | 22.7  | % |      | 1,388,365 |  | 21.1  | % |  | 1,619,615 |  | 23.7  | %
|North Anna             |  | 461,530                    |  | 15.2  |                          |  | 399,557   |      | 12.3  |   |      | 900,035   |  | 13.6  |   |  | 819,576   |  | 12.0  |  
|Louisa                 |  | 44,752                     |  | 1.5   |                          |  | 26,564    |      | 0.8   |   |      | 62,183    |  | 0.9   |   |  | 39,800    |  | 0.6   |  
|Marsh Run              |  | 51,398                     |  | 1.7   |                          |  | 35,185    |      | 1.1   |   |      | 73,798    |  | 1.1   |   |  | 67,489    |  | 1.0   |  
|Rock Springs           |  | 16,099                     |  | 0.5   |                          |  | 15,723    |      | 0.5   |   |      | 16,803    |  | 0.3   |   |  | 16,532    |  | 0.2   |  
|Distributed generation |  | 93                         |  |      |                          |  | 44        |      |      |   |      | 155       |  |      |   |  | 157       |  |      |  
|                       |  |                            |  |       |                          |  |           |      |       |   |      |           |  |       |   |  |           |  |       |  
|Total generated        |  | 1,156,040                  |  | 38.0  |                          |  | 1,212,968 |      | 37.4  |   |      | 2,441,339 |  | 37.0  |   |  | 2,563,169 |  | 37.5  |  
|                       |  |                            |  |       |                          |  |           |      |       |   |      |           |  |       |   |  |           |  |       |  
|Purchased:             |  |                            |  |       |                          |  |           |      |       |   |      |           |  |       |   |  |           |  |       |  
|Total purchased        |  | 1,884,246                  |  | 62.0  |                          |  | 2,029,803 |      | 62.6  |   |      | 4,152,839 |  | 63.0  |   |  | 4,276,301 |  | 62.5  |  
|                       |  |                            |  |       |                          |  |           |      |       |   |      |           |  |       |   |  |           |  |       |  
|Total available energy |  | 3,040,286                  |  | 100.0 | %                        |  | 3,242,771 |      | 100.0 | % |      | 6,594,178 |  | 100.0 | % |  | 6,839,470 |  | 100.0 | %
|                       |  |                            |  |       |                          |  |           |      |       |   |      |           |  |       |   |  |           |  |       |  



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We satisfy the majority of our member distribution cooperatives capacity requirements and less than
half of their energy requirements through our ownership interests in Clover, North Anna, Louisa, Marsh Run and Rock Springs. We purchase capacity and energy from the market to supply the remaining needs of our member distribution cooperatives.

Our operating expenses are significantly affected by the extent to which we purchase power and, relatedly, the availability of our base
load generating facilities, Clover and North Anna. Base load generating facilities generally have relatively high fixed costs. Clover and North Anna operate with relatively low variable costs as compared to Louisa, Marsh Run and Rock Springs. When
either Clover or North Anna is off-line, we must purchase replacement energy from either Virginia Electric and Power Company (Virginia Power) or from the market. As a result, our operating expenses, and consequently our rates to our
member distribution cooperatives, are more significantly affected by the operations of Clover and North Anna than by our combustion turbine facilities. Our combustion turbine facilities have relatively low fixed costs and greater operational
flexibility; however, they have relatively high variable costs. As a result, we operate them only when the market price of energy makes their operation economical or when their operation is required by PJM for system reliability purposes. The output
of Clover and North Anna for the three and six months ended June 30, 2008 and 2007, as a percentage of the maximum net dependable capacity rating of the facilities was as follows:



|         |  |                            |   |  |                          |   |  |                            |   |  |                          |   |  |       |   |  |       |   |  |       |   |  |      |  
|-------- |  | -------------------------- | - |  | ------------------------ | - |  | -------------------------- | - |  | ------------------------ | - |  | ----- | - |  | ----- | - |  | ----- | - |  | ---- | -
|         |  | Clover                     |   |  | North Anna               |  
|         |  | Three Months EndedJune 30, |   |  | Six Months EndedJune 30, |   |  | Three Months EndedJune 30, |   |  | Six Months EndedJune 30, |  
|         |  | 2008                       |   |  | 2007                     |   |  | 2008                       |   |  | 2007                     |   |  | 2008  |   |  | 2007  |   |  | 2008  |   |  | 2007 |  
|Unit 1   |  | 60.6                       | % |  | 76.4                     | % |  | 72.8                       | % |  | 85.4                     | % |  | 101.1 | % |  | 100.1 | % |  | 101.3 | % |  | 99.6 | %
|Unit 2   |  | 63.4                       |   |  | 75.4                     |   |  | 74.5                       |   |  | 84.5                     |   |  | 100.6 |   |  | 71.3  |   |  | 95.5  |   |  | 77.6 |  
|Combined |  | 62.0                       |   |  | 75.9                     |   |  | 73.7                       |   |  | 85.0                     |   |  | 100.9 |   |  | 85.7  |   |  | 98.4  |   |  | 88.6 |  

Clover.During the three and six months ended June 30, 2008, Clover Unit
1 was off-line for 18.5 days for scheduled maintenance outages. During the three and six months ended June 30, 2008, Clover Unit 2 was off-line for 11.5 days and 14.5 days, respectively, for scheduled maintenance outages. During the six months
ended June 30, 2008, Clover Unit 1 was off-line for three days for unscheduled maintenance outages and Clover Unit 2 was off-line for a half day for an unscheduled maintenance outage. During the three and six months ended June 30, 2008,
Clover Unit 2 was operating at half load capability for 13 days due to an equipment issue. During the three and six months ended June 30, 2007, Clover Units 1 and 2 were off-line for 14 days and 13 days, respectively, for scheduled maintenance
outages. Clover Units 1 and 2 experienced minor unscheduled outages for the three and six months ended June 30, 2007.

North
Anna.During the six months ended June 30, 2008, North Anna Unit 2 was off-line for nine days for unscheduled maintenance outages. During the three and six months ended June 30, 2007, North Anna Unit 2 was off-line for 22 days and
36 days, respectively, for a scheduled refueling and maintenance outage. During the six months ended June 30, 2007, North Anna Unit 1 was off-line for one day for an unscheduled maintenance outage. During the three and six months ended
June 30, 2007, North Anna Unit 2 was off-line for two days for unscheduled maintenance outages.

Combustion turbine facilities.During the three and six months ended June 30, 2008, and 2007, the operational availability of our Louisa, Marsh Run and Rock Springs combustion turbine facilities was as follows:



|             |  |                            |   |  |                          |   |  |      |   |  |      |  
|------------ |  | -------------------------- | - |  | ------------------------ | - |  | ---- | - |  | ---- | -
|             |  | Three Months EndedJune 30, |   |  | Six Months EndedJune 30, |  
|             |  | 2008                       |   |  | 2007                     |   |  | 2008 |   |  | 2007 |  
|Louisa       |  | 97.1                       | % |  | 89.3                     | % |  | 98.3 | % |  | 94.1 | %
|Marsh Run    |  | 99.3                       |   |  | 96.3                     |   |  | 97.5 |   |  | 98.0 |  
|Rock Springs |  | 98.8                       |   |  | 98.1                     |   |  | 99.3 |   |  | 98.9 |  



12



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The components of our operating expenses for the three and six months ended June 30, 2008 and 2007,
were as follows:



|                                                  |  |                            |         |                          |   |         |  |   |         |   |  |   |         |  
|------------------------------------------------- |  | -------------------------- | ------- | ------------------------ | - | ------- |  | - | ------- | - |  | - | ------- | -
|                                                  |  | Three Months EndedJune 30, |         | Six Months EndedJune 30, |  
|                                                  |  | 2008                       |         | 2007                     |   | 2008    |  |   | 2007    |  
|                                                  |  | (in thousands)             |         | (in thousands)           |  
|Fuel                                              |  | $                          | 35,847  |                          | $ | 29,424  |  | $ | 71,517  |   |  | $ | 62,517  |  
|Purchased power                                   |  |                            | 151,458 |                          |   | 139,140 |  |   | 326,423 |   |  |   | 305,456 |  
|Deferred energy                                   |  |                            | 5,420   |                          |   | 9,213   |  |   | 8,362   |   |  |   | (6,906  | )
|Operations and maintenance                        |  |                            | 9,342   |                          |   | 12,961  |  |   | 17,057  |   |  |   | 22,937  |  
|Administrative and general                        |  |                            | 9,120   |                          |   | 8,521   |  |   | 19,125  |   |  |   | 16,613  |  
|Depreciation, amortization and decommissioning    |  |                            | 9,668   |                          |   | 9,407   |  |   | 19,303  |   |  |   | 18,824  |  
|Amortization of regulatory asset/(liability), net |  |                            | 140     |                          |   | 712     |  |   | (310    | ) |  |   | 893     |  
|Accretion of asset retirement obligations         |  |                            | 771     |                          |   | 733     |  |   | 1,542   |   |  |   | 1,465   |  
|Taxes other than income taxes                     |  |                            | 1,918   |                          |   | 1,804   |  |   | 3,858   |   |  |   | 3,634   |  
|                                                  |  |                            |         |                          |   |         |  |   |         |   |  |   |         |  
|Total Operating Expenses                          |  | $                          | 223,684 |                          | $ | 211,915 |  | $ | 466,877 |   |  | $ | 425,433 |  
|                                                  |  |                            |         |                          |   |         |  |   |         |   |  |   |         |  

Aggregate operating expenses increased $11.8 million, or 5.6%, and $41.4 million, or 9.7%, for the
three and six months ended June 30, 2008, respectively, as compared to the same periods in 2007, primarily due to changes in purchased power expense, deferred energy, and fuel expense slightly offset by a decrease in operations and maintenance
expense.

Purchased power expense increased $12.3 million, or 8.9%, and $21.0 million, or 6.9%, for the three and six months ended
June 30, 2008, respectively, as compared to the same periods in 2007, primarily due to increased capacity charges related to PJMs implementation of RPM on June 1, 2007, and due to an increase in the average cost of purchased power
partially offset by a decrease in the volume of purchased power. The increase in the average cost of purchased power is reflective of the timing of our forward energy purchases relative to the prevailing market prices at the time of those purchases.

Deferred energy expense decreased $3.8 million, or 41.2%, and increased $15.3 million, or 221.1%, for the three and six months ended
June 30, 2008, respectively, as compared to the same periods in 2007. During the three months ended June 30, 2008, we over-collected $5.4 million in energy costs; whereas in the three months ended June 30, 2007, we over-collected $9.2
million in energy costs. During the six months ended June 30, 2008, we over-collected $8.4 million in energy costs as compared to an under-collection of $6.9 million for the same period in 2007.

Fuel expense increased $6.4 million, or 21.8%, and $9.0 million, or 14.4%, respectively, for the three and six months ended June 30, 2008, as
compared to the same periods in 2007, primarily due to the increase in the average price of fuel as well as the increase in purchases of fuel oil and natural gas which are used to operate our combustion turbine facilities.

Operations and maintenance expense decreased $3.6 million, or 27.9%, and $5.9 million, or 25.6%, for the three and six months ended June 30, 2008,
respectively, as compared to the same periods in 2007. The decrease in operations and maintenance expense was primarily related to fewer scheduled maintenance and refueling outages at our operating facilities during 2008 as compared to 2007.

Other Items

Investment
Income.Investment income decreased $1.0 million, or 28.4%, and $1.7 million, or 25.8%, for the three and six months ended June 30, 2008, respectively, as compared to the same periods in 2007, primarily due to lower
interest income on investments in our nuclear decommissioning trust fund.

Interest Charges, net. The
primary factors affecting our interest expense are scheduled annual payments of principal on our indebtedness, interest related to our potential liability associated with our dispute with Norfolk Southern Railway Company (Norfolk
Southern), and capitalized interest.



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The major components of interest charges, net for the three and six months ended June 30, 2008 and
2007, were as follows:



|                                                      |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|----------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                      |  | Three Months EndedJune 30, |         |   | Six Months EndedJune 30, |  
|                                                      |  | 2008                       |         |   | 2007                     |   |         | 2008 |  |   | 2007    |  
|                                                      |  | (in thousands)             |         |   | (in thousands)           |  
|Interest expense on long-term debt                    |  | $                          | (13,229 | ) |                          | $ | (13,623 | )    |  | $ | (26,520 | ) |  | $ | (27,236 | )
|Other                                                 |  |                            | (1,435  | ) |                          |   | (1,661  | )    |  |   | (2,954  | ) |  |   | (3,214  | )
|                                                      |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Total Interest Charges                                |  |                            | (14,664 | ) |                          |   | (15,284 | )    |  |   | (29,474 | ) |  |   | (30,450 | )
|Allowance for borrowed funds used during construction |  |                            | 150     |   |                          |   | 83      |      |  |   | 259     |   |  |   | 163     |  
|                                                      |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Interest Charges, net                                 |  | $                          | (14,514 | ) |                          | $ | (15,201 | )    |  | $ | (29,215 | ) |  | $ | (30,287 | )
|                                                      |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  

Net Margin.Our net margin, which is a function of our total
interest charges, remained relatively flat for the three and six months ended June 30, 2008, as compared to the same periods in 2007.

Financial
Condition

The principal changes in our financial condition from December 31, 2007 to June 30, 2008, were caused by increases
in deposits and accounts payabledeposits, regulatory liabilities, accounts payable, investmentsunrestricted investments and other, deferred chargesother and fuel stock, materials and supplies. These increases were slightly offset
by the change in deferred energy. Deposits and accounts payabledeposits increased by $48.9 million as a result of the increase in the amount of deposits posted by our counterparties in accordance with the terms of our respective master power
purchase and sale agreements with them. As of August 7, 2008, the deposits and accounts payable- deposits balance was zero. Regulatory liabilities increased $38.4 million primarily due to the increase in the fair value of our natural gas
futures contracts. Accounts payable increased $20.6 million as a result of increased purchased power expense as compared to the prior year. Investmentsunrestricted investments and other increased $15.7 related to additional cash invested due
to cash provided by operations. Deferred chargesother increased $13.3 million as a result of the increase in the fair value of our forward purchased power contracts and natural gas futures. Fuel stock, materials and supplies increased $12.9
million related to an increase in our coal inventory. Deferred energy changed $8.4 million due to the over-collection of energy costs in the first six months of 2008.

Liquidity and Capital Resources

Operations. Historically, our operating cash flows
have been sufficient to meet our short- and long-term capital expenditures related to our existing generating facilities, our debt service requirements, and our ordinary business operations. During the first six months of 2008 and 2007, our
operating activities provided cash flow of $77.5 million and $97.8 million, respectively. Operating activities in the first six months of 2008 were primarily impacted by changes in current liabilities, regulatory assets and liabilities, and current
assets. Current liabilities increased $79.2 million primarily related to a $48.9 million increase in accounts payabledeposits and a $20.6 million increase in accounts payable. Accounts payabledeposits, which includes accrued interest,
increased as a result of the change in the amount of deposits posted by our counterparties in accordance with the terms of our respective master power purchase and sale agreements with them. Accounts payable increased $20.6 million related to an
increase in purchased power expense as compared to year end. Regulatory assets and liabilities increased $40.2 million primarily due to the increase in the fair value of our natural gas futures contracts partially offset by the increase in the loss
on our auction rate securities. Current assets increased by $69.7 million as a result of the $48.9 million increase in the amount of deposits posted by our counterparties in accordance with the terms of our respective master power purchase and sale
agreements with them and the $12.9 million increase in fuel, materials and supplies primarily as a result of increased quantities of coal as compared to year end.

Financing Activities.In addition to liquidity from our operating activities, we maintain committed lines of credit and revolving credit facilities to cover short-term and medium-term funding needs. As
of June 30, 2008, we had short-term committed variable rate lines of credit in an aggregate amount of $215.0 million. Additionally, we had two committed three-year revolving credit facilities totaling $125.0 million. At June 30, 2008 and
2007, we had no short-term borrowings or letters of credit outstanding under any of these arrangements. We expect that we will renew the majority of these working capital lines of credit and revolving credit facilities as they expire.

Investing Activities.Investing activities in the first six months of 2008 were primarily impacted by activity related to available for
sale securities, electric plant additions for our generating facilities, the acquisition of approximately 100 miles of transmission lines located on the Eastern Shore of Virginia from Delmarva Power and Light, and interest earned on
investmentsunrestricted investments and other, and cash and cash equivalents.



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Auction Rate Securities.As of December 31, 2007 and June 30, 2008, we had $33.8
million of principal invested in seven auction rate securities (ARS). On these respective dates, the estimated fair value of our ARS was $31.9 million and $24.0 million.

ARS pay a variable rate of interest which resets periodically in connection with the auction to purchase or sell the securities. Generally, the periodic
auctions provide owners of auction rate securities the opportunity to liquidate their investment at par value. In the event auctions are not fully subscribed, which auction agents describe as failed auctions, these securities are typically illiquid.
In 2007, deteriorating conditions in the credit market resulted in our seven ARS experiencing failed auctions. These failed auctions resulted in the interest rates on these ARS resetting at a predetermined spread to LIBOR, which, depending on the
security, has ranged from 100 basis points to 200 basis points. All of the ARS we owned at June 30, 2008, were rated A-, A, or AA by S&P, Baa2, A3, A2, Aa3,
or Aa2 by Moodys, or AA by Fitch, Inc.

In the absence of liquidity provided by auctions, we rely on a third
party to establish the estimated fair values of our ARS. It is our understanding that the estimated fair values of our ARS are determined with a valuation model that utilizes expected cash flow streams, assessments of credit quality, discount rates,
and overall credit market liquidity, among other things.

At June 30, 2008, the $9.8 million difference between the principal of our
ARS and the estimated fair value of our ARS was accounted for as a regulatory asset in accordance with SFAS No. 71. Future changes in the estimated fair value of our ARS will be accounted for in a similar manner. The estimated fair value of our
ARS are included in Investments  unrestricted investments and other on our Condensed Consolidated Balance Sheet and are classified as available for sale.



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OLD DOMINION ELECTRIC COOPERATIVE

ITEM 3. QUANTITATIVE AND QUALITATIVE

DISCLOSURES
ABOUT MARKET RISK

No material changes occurred in our exposure to market risk during the second quarter of 2008.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, our management, including the President and Chief Executive Officer, and Senior Vice President and Chief Financial Officer conducted an evaluation of the effectiveness of our disclosure
controls and procedures. Based upon that evaluation, the President and Chief Executive Officer, and Senior Vice President and Chief Financial Officer concluded that our disclosure controls and procedures are effective in ensuring that all material
information required to be filed in this report has been made known to them in a timely manner. We have established a Disclosure Assessment Committee comprised of members from senior and middle management to assist in this evaluation. There have
been no significant changes in our internal controls over financial reporting or in other factors that could significantly affect such controls during the past fiscal quarter.



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OLD DOMINION ELECTRIC COOPERATIVE

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Northern Virginia Electric Cooperative (NOVEC)

Over the past several years, we have had discussions and negotiations with NOVEC about changing the nature of its wholesale power contract from an
all-requirements contract to a partial-requirements contract. See Part 1, Item 1 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

On December 18, 2007, NOVEC filed a motion advising the United States Court of Appeals for the District of Columbia that NOVEC and ODEC are engaged in settlement negotiations and requested that proceedings be
held in abeyance. On January 11, 2008, the court granted this motion but required NOVEC and ODEC to file status reports every 60 days. Status reports were filed on March 11, 2008, May 12, 2008, and July 11, 2008, and
indicated that NOVEC and ODEC continue to be engaged in settlement negotiations. The court has also ordered that NOVEC and ODEC file motions to govern further proceedings in the case within 30 days of the end of the settlement negotiations. For
further description of our legal proceedings related to NOVEC, see Part 1, Item 3 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

Norfolk Southern

We are a party to a contractual dispute with a fuel transportation supplier,
Norfolk Southern. See Part 1, Item 3 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. On January 15, 2008, ODEC, Virginia Power and Norfolk Southern filed a stipulated calculation in the case. A damage
hearing was held on April 8, 2008, and the court entered its final order on April 17, 2008 in favor of Norfolk Southern. On July 8, 2008, we, along with Virginia Power filed a petition for appeal with the Supreme Court of Virginia and
on July 29, 2008, Norfolk Southern filed its brief in opposition to our petition for appeal. We are pursuing an appeal with the Supreme Court of Virginia.

We recorded a liability related to the Norfolk Southern dispute and the current period charges are being collected through rates. If it is ultimately determined that we owe any such amounts to Norfolk Southern, the
amounts are not expected to have a material impact on our financial position or results of operations due to our ability to collect such amounts through rates charged to our member distribution cooperatives.

On July 30, 2008, we, along with Virginia Power, filed suit against Norfolk Southern in the Circuit Court of the City of Richmond, Virginia, seeking
to recover $4.9 million, plus interest, for unauthorized fuel surcharges improperly collected by Norfolk Southern. We believe that the fuel surcharge conflicts with the payment provisions specified in the agreement that provides for the amounts
payable for coal transportation services to Clover and the fuel surcharge is therefore inapplicable.

FERC Proceedings Related to Potential
Reorganization

We have been engaged in proceedings at FERC relating to approvals for a potential reorganization. See Part 1,
Item 3 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2007. On July 1, 2008, FERC issued an order accepting the revised tariff sheets for filing, effective on the date of the consummation of ODECs
potential reorganization and these proceedings are concluded.

Other Matters

Other than legal proceedings arising out of the ordinary course of business, which management believes will not have a material adverse impact on our
results of operations or financial condition, there is no other litigation pending or threatened against us. See Legal Proceedings in Part II, Item 1 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Risk Factors in Part I, Item 1A of our Annual Report on Form 10-K for the year
ended December 31, 2007, which could affect our business, financial condition or future results. The risks described in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to
us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.



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##### Table of Contents

ITEM 5. OTHER INFORMATION

Lease of Clover Unit 1

In March
1996, we entered into a lease with an owner trust for the benefit of an investor in which we leased our interest in the Clover Power Station Unit 1 (Clover Unit 1) and related common facilities, subject to the lien of the Indenture,
for a term extendable by the owner trust up to the full productive life of Clover Unit 1, and simultaneously entered into an approximately 21.8 year lease of the interest back to us. See Part II, Item 7Managements Discussion
and Analysis of Financial Condition and Results of OperationsLiquidity and Capital ResourcesSignificant Contingent Obligations and Off-Balance Sheet Arrangements in the Annual Report on Form 10-K for the fiscal year ended
December 31, 2007. In connection with the lease and leaseback of Clover Unit 1, we issued a zero-coupon bond which was pledged as collateral to the trust formed for the benefit of the investor. The zero-coupon bond was insured by Ambac
Assurance Corporation (Ambac). Under the terms of the arrangements relating to the transaction, we agreed to replace this collateral if the claims paying ability of Ambac fell below AAA as rated by Standard &
Poors Ratings Services (S&P) or Aaa as rated by Moodys Investors Service (Moodys). On June 5, 2008, S&P lowered its rating of Ambac to AA. We are currently in discussions
with the investor regarding a resolution to this matter, including an extension of the time period to replace or enhance this collateral.

NOVEC

We have been engaged in discussions with NOVEC regarding the possible termination of its wholesale power contract and
its withdrawal as a member of ODEC. See Possible Changes to Power Supply Agreements with Member Distribution CooperativesNOVEC in Part 1of of our Annual Report on Form 10-K for the year ended December 31, 2007. We currently
anticipate that we will enter into a separation arrangement with NOVEC in the third quarter of 2008. We would not consider any termination of NOVECs wholesale power contract or take any other action in connection with the resolution of our
issues with NOVEC that we believe in any way could adversely affect our financial condition or that of our other member distribution cooperatives.

Environmental

We currently are required to comply with numerous
federal, state and local laws and regulations relating to the protection of the environment. On July 11, 2008, the United States Court of Appeals for the District of Columbia Circuit issued an opinion vacating the Clean Air Interstate Rule
(CAIR). CAIR required significant reductions of SO2and NOxin the eastern United States, including Virginia and Maryland. The Environmental Protection Agency will now need to re-address these matters to determine future mandates with which we would need to comply.



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|ITEM 6. | EXHIBITS
|------- | --------



|     |  |                                                                          
|---- |  | -------------------------------------------------------------------------
|31.1 |  | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)  
|     | 
|31.2 |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)  
|     | 
|32.1 |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. § 1350
|     | 
|32.2 |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C. § 1350



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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                      |  |                                                  
|--------------------- |  | -------------------------------------------------
|                      |  | OLD DOMINION ELECTRIC COOPERATIVE                
|                      |  | Registrant                                       
|                      | 
|Date: August 13, 2008 |  | /s/ Robert L. Kees                               
|                      |  | Robert L. Kees                                   
|                      |  | Senior Vice President and Chief Financial Officer
|                      |  | (Principal Financial Officer)                    



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EXHIBIT INDEX



|               |  |                                                                          
|-------------- |  | -------------------------------------------------------------------------
|Exhibit Number |  | Description of Exhibit                                                   
|              
|31.1           |  | Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)  
|               | 
|31.2           |  | Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)  
|               | 
|32.1           |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. § 1350
|               | 
|32.2           |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C. § 1350



21