On Friday, the State Corporation Commission (SCC) approved Dominion Energy’s offshore wind project, the single largest energy project ever built in Virginia and the first offshore wind project owned by an investor-owned utility.
“While we welcome the necessary shift to clean electricity generation in Virginia, this project is unprecedented in size, cost and complexity. As such, it needs strict consumer protection mechanisms in place to ensure that the clean energy transition does not create additional financial burdens for Virginia families,” said Brenann Gilmore, Clean Virginia’s Executive Director.
Clean Virginia emphasized in its testimony to the commission earlier this year that there are many risks associated with this project that necessitated higher levels of consumer protection including:
- Requiring Dominion to regularly report (at least quarterly) and to retain an independent monitor during the construction phase of the project.
- Implementing a capital cost cap at the current estimated amount of $9.65 billion.
- Requesting the commission assess if the current utility-owned model is the most appropriate mechanism for the remaining 2,600 MW of offshore wind development contemplated in the Virginia Clean Economy Act. (The Commission has previously recognized that utility ownership poses additional risks, whereas, the risk is most incurred by third-party owners when energy is procured via Power Purchase Agreements.)
“The State Corporation Commission’s inclusion of key reporting requirements, that Clean Virginia and other stakeholders requested, is a welcome addition that will allow for more effective monitoring of the project. In addition, the inclusion of a performance guarantee will more fairly distribute the risk of the project between ratepayers and shareholders. However, we note that the Commission did not approve an independent monitor that would have provided an additional, much-needed layer of transparency,” Gilmore said.
Clean Virginia also supported the Attorney General’s performance guarantee proposal which would hold customers harmless in the event the project does not generate as much energy as forecasted.
Despite citing all the risks associated with the utility ownership model, the SCC denied Clean Virginia’s request for an assessment of the appropriateness of the utility ownership model and did not provide a detailed explanation for its denial. Nonetheless, the consumer protections now in place means that ratepayers bear less risk for Virginia’s largest energy project.
Gilmore added: “As we move forward, Virginia must study all options available to procure the second phase of offshore wind established in the Virginia Clean Economy Act. Utility ownership is not the only, and likely not the most affordable, option for offshore wind development in Virginia.”
Clean Virginia is a 501(c)4 independent advocacy organization with an associated Political Action Committee, Clean Virginia Fund. Clean Virginia works to fight corruption in Virginia politics in order to promote clean energy, a robust, competitive economy, and community control over our energy policy. We are motivated by the core belief that our democracy should serve everyday Virginians over special interests.