On October 28, 2022, Dominion Energy Virginia, the office of Virginia Attorney General Jason Miyares (R), Walmart, Sierra Club, and Appalachian Voices reached an agreement on how to handle potential cost overruns or overproduction for the utility’s 2.6 GW Coastal Virginia Offshore Wind (CVOW) project.[1] The CVOW project, located 27 miles off the coast of Virginia Beach, is expected to be completed in late 2026 and cost $9.6 billion. In the Virginia State Corporation Commission’s (SCC) August 2022 Final Order approving the development of the project, regulators included a performance guarantee, which would require the utility to pay for any power it buys elsewhere if the project generates less than the expected 42% average annual capacity factor. According to Dominion, the SCC’s mandate would jeopardize the project’s viability.

If approved by the SCC, the settlement agreement would replace the performance guarantee with a cost-sharing approach for unforeseen costs that exceed the project’s budget. Under the agreement, the utility’s shareholders would pay 50% of any costs in the $10.3 billion to $11.3 billion range and would be responsible for 100% of any prudently incurred costs from $11.3 billion to $13.7 billion. There is no voluntary cost-sharing agreement for any costs that exceed $13.7 billion. Dominion would not be required to guarantee future energy production levels or factors beyond its control as outlined in the SCC’s August order. Instead, the utility would explain the factors contributing to any shortfall in expected energy production in a future SCC proceeding.

[1] https://news.dominionenergy.com/2022-10-28-Dominion-Energy-Virginia,-Office-of-Attorney-General,-Walmart,-Sierra-Club-and-Appalachian-Voices-File-Settlement-Agreement-for-Coastal-Virginia-Offshore-Wind