The Trump administration’s attempt to stop Dominion Energy from building its wind farm off the Virginia Beach coast cost the utility $228 million, company executives told shareholders this week.
Shortly before Christmas, the U.S. Interior Department issued a stop-work order for the project and four others along the East Coast. Government officials claimed the wind farms would harm national security, but declined to provide more details.
Dominion sued and last month, a federal judge in Norfolk ruled in favor of the company, saying the administration did not sufficiently explain purported security threats. The case is still pending, but Dominion was allowed to restart construction.
During the nearly month-long stoppage, Dominion racked up expenses from equipment storage, contractual penalties, an idle workforce and delays in using time-sensitive vessels.
Another $137 million was added to the project because of tariffs on materials such as steel. (It’s unclear how last week’s Supreme Court ruling, which overturned the Trump administration’s tariff policy, will impact future costs.)
The Coastal Virginia Offshore Wind project, or CVOW, is located 27 to 44 miles off the Oceanfront and will be the nation’s largest commercial offshore wind farm, with 176 turbines producing up to 2.6 gigawatts of electricity, or enough to power about 660,000 homes.
The company said this week it’s completed more than 70% of the wind farm and is on schedule to finish early next year. In the meantime, the turbines installed so far should start sending electricity to the grid by late March.
The project’s price tag was initially $9.8 billion, but has risen to $11.5 billion. That includes the recent developments but also costs from building onshore electrical interconnection and network upgrades required by the regional electric grid operator.
Utility customers have borne the project’s expenses, but will be shielded from future cost jumps.
Virginia households currently pay about $11 for CVOW on their monthly energy bills. The amount fluctuates each year with approval from the State Corporation Commission. Dominion’s most recent request to the commission, for example, would decrease the offshore wind charge by 90 cents.
Dominion has spent about $9 billion on the project so far. Once it reaches $11.3 billion, the utility can no longer pass on additional costs to consumers because of a 2022 settlement with the SCC.
Eventually, throughout the three-decade life of the project, customers will stop paying for the wind farm and receive a small monthly credit.
