The State Corporation Commission has approved Dominion Energy Virginia’s proposed Coastal Virginia Offshore Wind Project, which when fully operational will be the largest offshore wind farm in North America.
The project, consisting of 176 wind turbines, each designed to generate 14.7 megawatts, will be located approximately 27 miles off the coast of Virginia Beach.
“Our customers expect reliable, affordable energy, and offshore wind is key for delivering on that mission. We are very pleased that the commission has approved this important project that will benefit our customers. We are reviewing the specifics of the order, particularly the performance requirement,” said Robert M. Blue, Dominion Energy Chair, president and CEO.
The schedule calls for construction to be complete in 2026, when it can generate enough clean energy to power up to 660,000 homes. The final order from the SCC affirms that the project meets all Virginia statutory requirements for rider cost recovery and the issuance of a Certificate of Public Convenience and Necessity for the onshore infrastructure.
As part of its order, the SCC granted approval for approximately 17 miles of new transmission lines and other onshore infrastructure needed to deliver the clean, renewable energy offshore to homes and businesses across Virginia.
The order also includes a performance requirement, but does not outline the details surrounding that requirement.
The price tag, a projected $9.8 billion, will result in an average $4.72 per month increase for Dominion customers, peaking at $14.22 per month in 2027.
A rate adjustment clause approved by the SCC today is effective for usage on and after Sept. 1, 2022.
“In so finding that these costs must be recovered from customers, the Commission is also keenly aware of the ongoing rise in gas prices, inflation, and other economic pressures that are impacting all utility customers. This is a prescriptive statute, and we applied it based on the record in this case,” the SCC final order reads.
The SCC order included the following consumer protections:
- Dominion shall file a notice with the SCC within 30 calendar days if it determines that the total project costs are expected to exceed the current estimate, or if the final turbine installation is expected to be delayed beyond Feb. 4, 2027.
- Each annual Rider OSW update application filed by Dominion prior to the project’s commercial operation shall include any material changes to the project, the most recent biannual project update, and a written explanation as to the reason for any cost overruns above the most recent estimate provided by the company to include the reasonableness and prudence of the additional costs.
- Beginning with the commercial operation and extending for the life of the project, customers shall be held harmless for any shortfall in energy production below an annual net capacity factor of 42 percent, as measured on a three-year rolling average.
The project approval has the backing of the industry group Virginia Advanced Energy Economy. Harrison Godfrey, managing director of VAEE’s parent, Advanced Energy Economy, said the project will showcase the potential of the Virginia Clean Energy Act, which was passed in 2020, “both to build a clean, reliable grid and to grow the Commonwealth’s economy in the process.”
“This project, which will be the largest offshore wind farm in North America when complete, will power over 600,000 homes in Richmond, Virginia Beach City, Newport News, and beyond with reliable, zero-emission electricity. To put it into perspective, that’s more homes than in all of New Hampshire,” Godfrey said.
“What Virginians pay for their energy bills has a lot to do with where we get our energy from. With offshore wind, we don’t have to worry about a geopolitical conflict or a pipeline disaster raising our energy costs,” Godfrey said. “Harnessing local wind power will keep costs low and predictable for customers year after year. We know offshore wind can deliver for Virginia thanks to the pilot project off our coast.”
“Approving this offshore wind project offers an extraordinary economic development opportunity to build a new domestic industry right here in Virginia,” Godfrey said. “By developing, operating, and maintaining these wind farms in Hampton Roads, one of the largest port areas on the East Coast, the Commonwealth can become a manufacturing hub for offshore wind, creating more than 5,000 good, middle-class jobs in manufacturing and infrastructure. The Coastal Virginia Offshore Wind project is an important step toward that future. We at Virginia AEE look forward to what offshore wind holds for Virginia workers and industry.”
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