A proposal for a wind-energy demonstration project off Virginia’s coast won a key approval Thursday, but the big decision on whether to go forward still rests with Dominion Virginia Power.
The U.S. Bureau of Ocean Energy Management announced that it had approved a “Research Activities Plan” governing two test turbines that Dominion is considering erecting about 27 miles off Virginia Beach.
The decision came barely a week after the same agency announced it had withdrawn Virginia and the rest of the Atlantic coast from a plan for offshore oil and gas leasing.
The two turbines would help Dominion gauge the potential for a massive offshore wind farm for which it has first dibs. In 2013, the utility won a federal auction to lease 113,000 acres for commercial wind development. That area is adjacent to where the research lease is located.
Dominion has struggled to get the demonstration started, however. It received one proposal to build the turbines when it first bid the job. The cost, approaching $400 million, was nearly twice initial estimates. The utility said that would be hard to justify to state regulators, who would be asked to approve a rider on customers’ power bills to pay for most of the project.
Starting again from scratch, Dominion divided the project into four pieces and rebid the work. In December, it said the second round of bids was more encouraging.
On Thursday, utility spokesman David Botkins said “we’re even more optimistic” than in December and that the federal agency’s “seal of approval” for the research turbines was an important milestone. But he stopped short of saying that Dominion had committed to go forward.
Botkins said the utility plans a meeting with stakeholders in early April and expects to announce its next steps then.
Dominion faces a May deadline for deciding whether to go forward with the demonstration project in order to hold on to a $47 million Department of Energy grant.
The twin 6-megawatt turbines would stand some 500 feet above the waterline and generate enough power for about 3,000 homes, beginning in 2018.
At one time, Virginia was in position to have the first offshore wind project in the United States. A farm off Block Island, R.I., is now close to claiming that distinction.
Still, officials expressed hope Thursday that Virginia will be a pacesetter. The research plan announced Thursday was the first of its kind approved by the federal agency. In a statement, Gov. Terry McAuliffe said the project has the potential to be “the gateway to commercial development of offshore wind” and said it would help diversify the state’s “energy mix.”
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