State regulators approve Dominion’s nearly $10 billion wind farm off Virginia Beach coast
Credit: By Sarah Rankin | Associated Press | Aug 05, 2022 | www.pilotonline.com ~~
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RICHMOND – State regulators on Friday approved an application from Dominion Energy Virginia to build an enormous offshore wind farm off the coast of Virginia Beach and recover the cost from ratepayers.
No parties to the monthslong proceeding had opposed the approval of the project, which will help the utility boost the proportion of its generation that comes from renewable resources. But many had raised concerns about affordability and possible risks to the utility’s captive ratepayers.
In its Friday order, the State Corporation Commission noted that the 176-turbine Coastal Virginia Offshore Wind Project will likely be the single largest project in Dominion’s history and said that because of its size, complexity and location, it faces an array of challenges. The commission included in its order three “consumer protections,” including a performance standard.
The commission’s order also approved facilities that will connect the wind farm to the existing transmission system.
Robert Blue, Dominion Energy’s president and CEO, said in a statement that the company was pleased with the approval but was reviewing the specifics of the order, “particularly the performance requirement.”
The project, which will be located about 27 miles off the coast, has an expected capital cost of $9.8 billion and has drawn broad support from local officials, policymakers, business groups and trade unions, who say it will help fight climate change and create jobs. Backers quickly celebrated the commission’s decision.
[ Previously: Dominion is seeking approval for a $10B wind farm off Virginia Beach. Advocates are seeking protections for customers. ]
“We applaud the SCC for greenlighting new offshore wind power in Virginia. As the largest offshore wind project in the country, this project is a critical piece of our clean energy transition because it complements solar by generating power at night when the sun isn’t shining,” Will Cleveland, a senior attorney for the Southern Environmental Law Center, said in a statement.
Regarding costs, the SCC order said that over the wind farm’s projected 35-year lifetime, including the construction and its 30-year projected useful life, a typical residential customer is expected to see an average monthly bill increase of $4.72, with a peak monthly bill increase of $14.22 in 2027.
“To be clear, total Project costs, including financing costs, less investment tax credits, are estimated to be approximately $21.5 billion on a Virginia-jurisdictional basis, assuming such costs are reasonable and prudent. And all of these costs … will find their way into ratepayers’ electric bills in some manner,” the order said.
Dominion said in a news release that because offshore wind turbines have no fuel costs, the project is expected to save Virginia customers more than $3 billion during its first 10 years of operation.
The consumer protections in the commission’s order include a requirement that Dominion file a notice within 30 calendar days if it finds 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. Annual filings will also have to address “any material changes” to the project and explain any cost overruns.
The SCC also ordered that beginning with the commercial operation and extending through the life of the project, customers will be “held harmless” for any shortfall in energy production below a certain threshold.
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