Dominion Energy has announced an agreement to sell a 50 percent interest in the Coastal Virginia Offshore Wind commercial project (CVOW) to Stonepeak, forming an offshore wind partnership.
Dominion Energy will retain operational control over the construction and operations of CVOW.
Robert M. Blue, Chair, President, and CEO of Dominion Energy, expressed confidence in the progress of the Coastal Virginia Offshore Wind project, noting its adherence to established timelines and budget expectations.
Robert Blue outlined several key benefits of the transaction, including the addition of a well-capitalized partner, robust cost-sharing arrangements to mitigate potential project cost escalations, and enhancements to Dominion Energy’s overall business risk profile.
The transaction structure entails Stonepeak’s investment in a subsidiary of Dominion Energy Virginia, subject to approval from the State Corporation Commission of Virginia (SCC). Dominion Energy Virginia’s public utility status in Virginia will enable cost recovery for the project’s construction and operation under the existing Virginia offshore wind rider program.
Following the transaction, Dominion Energy will continue to oversee all aspects of CVOW’s construction and operations, with Stonepeak owning a 50 percent noncontrolling equity interest. The partnership will be consolidated for accounting purposes, pending approvals from regulatory bodies and relevant agencies.
The transaction is subject to approvals from the SCC and the North Carolina Utilities Commission, along with consents from regulatory agencies regarding contract and permit assignments. Expected to close by the end of 2024, the deal will provide Dominion Energy with approximately $3 billion in proceeds, representing 50 percent of CVOW’s construction costs incurred to date, with adjustments based on final project costs.
CVOW, a 2.6-gigawatt offshore wind farm, is set to become the largest project of its kind in the United States upon completion in late 2026. Located off the coast of Virginia Beach, the project will feature 176 turbines and three offshore substations, capable of powering up to 660,000 homes with clean, renewable energy.