Dominion Energy’s largest US offshore wind array 'on track' as rate hikes soon take effect
Regulated utility reports 2.6GW Virginia project on track towards commissioning in 2026, and is expected to add around $4 to residential monthly bills over its lifetime
Dominion Energy is making steady progress on its nation-leading 2.6GW Coastal Virginia Offshore Wind (CVOW) project, with 42 monopiles already installed since offshore construction began in May towards its scheduled commissioning in late 2026, the company reported today.
“The project is proceeding on time and on budget consistent with the timelines and estimates,” said Bob Blue, CEO of the Richmond-based regulated utility.
German steel fabricator EEW has delivered 72 of the total 176 foundations to the marshalling hub at Portsmouth Marine Terminal (PMT).
“We're confidently on our way to achieving our goal of 71 monopiles installed during the first of two planned installation seasons,” Blue said.
Two of the three offshore substation topside structures have been completed and delivered to Danish engineering firm Semco for outfitting, while 33 transition pieces had been fully fabricated and 15 delivered to PMT, according to Blue.
Italy’s Prysmian has manufactured all 161 miles of onshore underground cable and about half of the 600 miles of offshore cable.
“We expect to begin installing the export cable later this quarter,” said Blue.
Dominion has entered into an agreement with US-based infrastructure investment firm Stonepeak for sale of 50% stake in the project, subject to regulatory approvals. The utility expects transaction completion this year.
Virginia is the first US state where its first commercial wind power will come from offshore.
Federal and state permits
The project likewise stands out as the only one under development by a vertically integrated regulated utility under direct supervision of Virginia utilities regulator State Corporation Commission (SCC).
Return on investment
As such, Dominion gets a guaranteed rate of return on its investment into CVOW as it would for a conventional energy project, and SCC approved its petition to raise its “Rider” – Virginia's cost-back mechanism – for the project by 80%.
“The monthly Rider OSW charge to a residential customer using 1,000 kilowatt-hours would increase by $3.89, from $4.74 to $8.63, effective 1 September, 2024,” according to SCC filing.
The increase is expected to generate $486m over the following 12 months. SCC last year authorised a return on common equity of 9.7% for Dominion for the 2024-2025 period.
CVOW “is expected to generate fuel savings of $3bn for customers during the first 10 years of operation,” he added.
Victoria Higgins, Virginia director of environmental group Chesapeake Climate Action Group, said: “Clean energy is cheaper than fossil fuels by every metric and represents an unprecedented opportunity to invest in our future.