Dominion Energy threatens to scrap offshore wind farm project

August 26, 2022
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RICHMOND, Va. (AP) — A ratepayer protection that state regulators included in a recent order approving Dominion Energy Virginia’s application to build and recover the costs of a massive offshore wind farm would force the utility to scrap the project, Dominion said in a filing this week.

The State Corporation Commission granted approval this month for the 176-turbine, multibillion-dollar project off Virginia Beach. Dominion immediately raised concerns about the commission’s inclusion of a performance guarantee for the wind farm and in a petition Monday asked the regulators to reconsider that element of their order.

Dominion “shares the Commission’s concern, as expressed in the Final Order, that the Project be constructed and operated in a way that reasonably mitigates risk for its customers. The Commission’s unprecedented imposition of an involuntary performance guarantee condition on its approvals, however, is untenable,” the filing said. “As ordered, it will prevent the Project from moving forward, and the Company will be forced to terminate all development and construction activities.”

The commission’s Aug. 5 order included three “consumer protections,” including the performance guarantee, or performance standard.

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The State Corporation Commission ordered that beginning with the commercial operation and extending through the life of the project, customers will be “held harmless” for any shortfall in energy production below an annual net capacity factor of 42%, measured on a three-year rolling average. Capacity factor is a measure of how often a generating facility runs during a period of time.

Such a performance standard will protect customers who are paying for the project “from also having to pay for replacement energy if the Project does not generate the amount of electricity upon which Dominion bases its request and its cost estimates,” the commission said in its order.

Dominion argued in its petition that the commission lacks the authority to impose such a performance guarantee and that doing so would be contrary to the intent of the General Assembly, which helped pave the way for the project in 2020 with an overhaul of the state’s energy law.

The utility also argued the performance standard is unreasonably broad in scope and would hold it responsible for events far out of its control, such as “acts of war or terror, catastrophic weather events or changes in weather patterns.”

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