Governors' Wind Energy Coalition

Virginia regulators approved Dominion Energy’s plans for what could be the nation’s second offshore wind farm Friday but said they would not have done so if the state Legislature hadn’t created a mandate for the project.

The $300 million, two-turbine, 12-megawatt Coastal Virginia Offshore Wind (CVOW) project is slated to come online in December 2020, as the forerunner to a commercial-scale wind farm being planned by Dominion.

Both projects are supposed to bring Virginia closer to its new goal of deriving 2 gigawatts of power from offshore wind by 2028. A landmark energy law passed earlier this year gave a pre-emptive blessing to CVOW, saying that a utility-owned offshore wind demonstration of up to 16 megawatts would be “in the public interest.”

Clean energy groups and environmentalists, along with Dominion itself, were pleased with the ruling by the State Corporation Commission (SCC), calling it a healthy step toward a much bigger buildout.

“It is a great day for clean energy in the Commonwealth. This project will set the stage for a larger project capable of generating 2,000 megawatts of electricity, enough to power 700,000 homes,” David Carr, general counsel at the Southern Environmental Law Center, said in a statement.

It comes as other states along the the northern Eastern Seaboard continue work on their own offshore goals, with most electing to skip pilots and aim straight for bigger build-outs. Virginia is seen by some offshore wind consultants as being especially ripe for development, in part because of the shipbuilding industry’s large workforce and pre-existing infrastructure.

The public-interest designation from the state Legislature had bemused regulators on the SCC, who questioned what was left for them to consider in their prudency review during hearings last month. (Energywire, Oct. 9)

In its decision Friday, the SCC said the company had not justified the expense of the project relative to other types of renewables, or even compared to the nation’s other offshore wind project in Massachusetts. And partly because a competitive power-purchase auction wasn’t part of the process, it added, “Dominion’s customers bear essentially all of the risk, including cost overruns and lack of performance.”

But the policy preferences expressed in the energy law, wrote the SCC, took precedence over the regulatory analysis.

If not for that, the pilot “would not be deemed prudent as that term has been applied by this Commission in its long history of public utility regulation or under any common application of the term,” it said.