Dominion may shelve 2.6-GW Coastal Virginia due to revenue requirement
Coastal Virginia Offshore Wind (CVOW) farm. Image by: PRNewsfoto/Dominion Energy
US utility Dominion Energy Inc (NYSE:D) has requested a reversal of the performance guarantee requirement for its recently approved 2.6-GW Coastal Virginia Offshore Wind (CVOW) project, claiming that the clause would “prevent the project from moving forward.”
In a filing with the Virginia State Corporation Commission earlier this week, the company made a rehearing request over the condition and threatened to terminate all development and construction activities if no change is made to the specific requirement.
As announced earlier in August, the Commission approved a revenue obligation that envisages some USD 78.7 million (EUR 79.3m) to be recovered between September 1, 2022 and August 31, 2023 through a new rate adjustment clause. The decision states that customers should be “held harmless” for any shortfall in energy production below the project’s expected annual net capacity factor of 42%, so as to protect them from unforeseen cost increases.
According to Dominion, the requirement is unlawful and inconsistent with the regulatory framework that enables utilities to recover incurred costs reasonably and prudently. “There is no precedent in the record of any utility being forced to take on an obligation of this nature to guarantee a capacity factor for its generating units over their entire life or, equally importantly, to insure against the risk of events beyond the utility’s control and its reasonable or unreasonable conduct [..],” Dominion said.
CVOW will be located about 27 miles (43 km) off the coast of Virginia Beach and is expected to be capable of producing electricity for up to 660,000 local homes per year with 176 Siemens Gamesa turbines. The USD-9.8-billion offshore wind farm is set to become fully operational by the end of 2026.
Veselina Petrova is one of Renewables Now's most experienced green energy writers. For several years she has been keeping track of game-changing events both large and small projects and across the globe.