Virginia Commission Approves Dominion’s 2.6-Gigawatt Offshore Wind Farm

The Virginia State Corporation Commission on Aug. 5 approved Dominion Energy Inc.’s Coastal Virginia Offshore Wind Commercial project, a 2,587-megawatt wind facility 27 miles off the coast of Virginia Beach. The project , the state’s first utility-scale offshore wind facility, will help the utility meet its requirements under the renewable portfolio standards. Regulators also granted approval to the interconnection and transmission facilities necessary to connect the project with the grid overseen by PJM Interconnection.

Dominion Energy expects the $9.8 billion project to begin operating by the end of 2026, with an anticipated life of 35 years. The commission agreed to a rate adjustment clause to recover $78.702 million of the revenue required for the rate year of Sep. 1, 2022, to Aug. 31, 2023. Over the projected lifetime, the project is expected to result in average and peak monthly bill surges of $4.72 and $14.22, respectively, for a residential customer using 1,000 kilowatt-hours of electricity per month in 2027, according to the commission’s projections. The project is scheduled for completion in 2026, when it can produce enough power to supply up to 660,000 homes, according to Dominion.

Sierra Club, an environmental organization, commended the approval noting that the project represents the largest wind farm and the first utility-owned facility in the U.S. The group highlighted that the project will be the first with diversity hiring requirements, with Dominion committing to increase its diverse workforce representation to reach at least 40 percent by the end of 2026.

The decision also includes customer protections, requiring the utility to file updates with the commission if overall project costs surpass the present estimate or circumstances delay turbine installation beyond Feb. 4, 2027. Dominion must also report any material changes to the Coastal Virginia system, alongside explanations for any cost overruns. Since Dominion’s projections are grounded in the expectation of a 42 percent annual net capacity factor, the customers will not be held financially accountable for any shortfall in the generation below that threshold, as it would translate into higher lifetime revenue requirements and levelized cost of energy for the system.

The protections do not fully address the high projected costs of the project or the fact that costs could increase. If such scenarios play out, the general assembly could appropriate money from the general fund or direct proceeds from Dominion’s participation in the Regional Greenhouse Gas Initiative’s cap-and-trade program toward mitigating the burden on ratepayers.

The project is still subject to federal approvals overseen by the U.S. Bureau of Ocean Energy Management. The commission requires Dominion to procure up to 5,200 megawatts of offshore wind by 2034. The utility must supply 100 percent zero-emissions electricity by 2045.