Dominion Energy revised the price tag of its Coastal Virginia Offshore Wind project upward to $9.8 billion from an earlier estimate of $8 billion, company executives announced Friday in an investor call.
Dominion CEO, chair and president Bob Blue attributed the more than 20 percent jump to “commodity and general cost pressures,” as well as the completion of design plans for bringing the power generated by the wind farm to customers onshore in Virginia Beach.
Over the next 30 years, the utility projected the wind project would cost the average Dominion residential customer in Virginia an extra $4 a month, with an initial increase starting September 2022 of approximately $1.45 more per month. During the call, Blue said the project’s increased price tag did not impact those estimates because the company is also projecting that the wind farm will be more productive than originally expected.
On Friday’s investor call, Blue told analysts that $1 billion in federal tax credits for the project could help drive down some of the bill impacts for customers. The company has also said that fuel savings costs are expected to amount to $3 billion over the wind farm’s first 10 years.
Dominion’s plans must be approved by the State Corporation Commission, although provisions of the 2020 Virginia Clean Economy Act declaring the utility’s construction of the project to be “in the public interest” and directing approval of certain costs will largely tie regulators’ hands.
Offshore wind, along with nuclear, is a key cornerstone of the utility’s efforts to decarbonize its electric fleet – the goal of the VCEA as well as Dominion’s own net-zero pledge.
The Coastal Virginia Offshore Wind project “is essential to meeting the policy goals set forth in the VCEA and other legislation mandating the development and deployment of renewable generation resources.”
Critics, however, have contended that the language of the VCEA dealing with offshore wind constitutes an unnecessary giveaway to Dominion that will saddle customers with unreasonable costs. One ProPublica-Richmond Times-Dispatch investigation found that a late change to the law requested by Dominion increased the allowable costs associated with the wind project from $7.3 to $9.8 billion.
One 2020 estimate by the SCC found that by 2030, the VCEA could increase customers’ electricity costs by $800 annually.
Republicans, fresh from retaking control of the House of Delegates and executive branch in elections Tuesday, on Thursday said one of their priorities would be rolling back Democrats’ climate change policies, of which the VCEA was the most prominent.
Asked about whether Dominion expects a change in energy policy out of Richmond during Friday’s investor call, Blue said that the utility over the past 15 years “has maintained constructive relationships with members of both parties, and we don’t see any reason that would change.”
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