Dominion, AG Reaches Proposed Settlement in Offshore Wind Case | Business news

RICHMOND, Va. (AP) — Dominion Energy has agreed to implement several consumer protections for its massive offshore wind project under a proposed settlement with the Virginia attorney general’s office and other parties released Friday.

The proposed agreement, which includes performance reporting requirements and provisions determining the extent of construction cost sharing, is still subject to final approval by the State Corporation Commission.

Attorney General Jason Miyares, a Republican whose office represents consumers in utility regulatory proceedings, said the settlement would provide “first-of-its-kind” protections for ratepayers while securing the 176-turbine project with an estimated capital cost of $9.8 billion is moving forward in a fiscally responsible way.

“I am pleased that we have achieved consumer protections that have never been seen before in Virginia’s modern history,” Miyares said in a statement. “For the first time, Dominion has significant skin in the game to ensure the project is delivered on budget. If the project is significantly over budget, it will come out of Dominion’s pocket, not the consumers,” he said.

Dominion filed a construction and reimbursement application for the project with the state commission nearly a year ago. This began a long process before the regulatory body, which included extensive documents and evidentiary hearing in May.

Commission in August signed by design, but it included a consumer protection provision — a performance guarantee — that Dominion strongly objectedsaying it would kill the project.

The parties to the proposal said on Friday that they have since consulted and reached the terms of the proposed settlement. It provides for a cost-sharing agreement for any cost overruns above the estimated $9.8 billion price tag. The company will cover 50% of construction costs in the range of $10.3 billion to $11.3 billion and 100% of costs between $11.3 billion and $13.7 billion. If construction costs exceed $13.7 billion, the matter will return to the commission.

The proposal does not require the company to guarantee a certain level of energy production, as the CPC originally ordered. Most likely, Dominion will be required to report average net capacity ratios annually and “provide a detailed explanation of the factors contributing to any shortfall.” Power factor is a measure of how often a generating facility operates over a period of time.

Richmond-based Dominion said in a news release that the deal will provide “significant customer benefits.”

“I appreciate the thoughtful efforts of all parties in reaching a constructive agreement to keep the project moving forward,” said Bob Blue, Dominion’s chairman, president and chief executive officer.

Walmart, Virginia’s largest private employer, and two environmental groups, Appalachian Voices and the Southern Environmental Law Center, are also parties to the agreement.

Will Cleveland, an attorney for SELC, emphasized in a statement that the main issue in the case “was never about the cost of offshore wind, but the risks created by the ownership structure.”

No other offshore wind project under development in the U.S. is funded by its own ratepayers, and no other project has a monopoly owner of the utility acting as its own general contractor, the law center said.

The project, which would be located about 27 miles off the coast of Virginia Beach, has received widespread support from local officials, politicians, business groups and unions, who say it will help combat climate change and create jobs.

The company has already launched a pilot project with two turbines. The 2.6 gigawatt project is on schedule for completion in late 2026. Dominion expects the project to produce enough clean energy to power up to 660,000 homes.

Clean Virginia, an environmental and rate reform group that is a party to the suit, did not oppose the agreement, which it said represents a “huge improvement” for consumers.

“If it weren’t for pressure from environmental advocates, the Attorney General’s Office, regulatory officials and Walmart, Dominion would have proceeded with one of the most expensive energy projects to date in Virginia with few consumer protections and faced few performance expectations to actually generate consistent clean energy,” said Laura Gonzalez, the group’s energy policy manager.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, copied or distributed without permission.