Virginia State Corporation Commission approves Coastal Virginia offshore wind project

The State Corporation Commission (SCC) has approved an application by Dominion Energy Virginia for cost recovery associated with its proposed
Coastal Virginia Offshore Wind (CVOW) commercial scale project.

The Commission also approved the electric interconnection and transmission facilities to connect CVOW reliably with the existing transmission system. This incldues approximately 17 miles of new transmission lines and other onshore infrastructure.

The project is expected to have a capital cost of $9.8 billion and will likely be the largest capital investment, and single largest project, in the history of Dominion Energy Virginia. The project consists of 176 wind turbines, each designed to generate 14.7 MW, to be located approximately 27 miles off the coast of Virginia Beach.

The Commission approved a revenue requirement of $78.702 million for the rate year of 1 September 2022 to 31 August 2023, to be recovered through a new rate adjustment clause (Rider OSW). Over the projected 35-year lifetime of the project, for a residential customer using 1,000 kilowatt-hours of electricity per month, Rider OSW is projected to result in an average monthly bill increase of $4.72 and a peak monthly bill increase of $14.22 in 2027. The rate adjustment clause is effective for usage on and after 1 September 2022.

In its final order, the SCC stated: “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 Commission further stated that significant concerns were raised throughout the proceeding regarding the affordability of the project and the financial risk to ratepayers. With a project of this magnitude, the SCC ordered 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 4 February 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.

According to the SCC, 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.

CVOW's schedule calls for construction to be complete in 2026, when it can generate enough energy to power up to 660,000 homes.

Robert M. Blue, Dominion Energy Chair, President and CEO said: "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."

Dominion energy currently operates the
Coastal Virginia Offshore Wind (CVOW) pilot project, 27 miles off Virginia Beach, along the US east coast. It is located about 43.5 km (27 miles) off the Virginia coast. Both Siemens Gamesa SWT-6.0-154 offshore wind turbines have been operational since October 2020 delivering energy to Dominion Energy customers in Virginia.

For more information on offshore wind farms worldwide, click here.