Dominion Energy Inc.’s Bob Blue told analysts last week that his team is nearing the finish line in talks with potential financing partners for the company’s nearly $10 billion offshore wind project.
Speaking after Dominion reported third-quarter profits of $717 million on operating revenue of $3.8 billion, Chair, President and CEO Blue said the Richmond-based utility could announce a financing deal for part of the Coastal Virginia Offshore Wind project by the end of next month or early in 2024. Such a transaction would let Dominion sell a noncontrolling stake in a subsidiary dedicated to offshore wind activities, a mechanism set up this year by Virginia lawmakers.
“We’ve got multiple parties who are engaged with us and our objective is a true equity partner with pro rata sharing of project costs,” CFO Steven Ridge told analysts Nov. 3. “That's what we’re after.”
Dominion in late 2013 acquired the leasehold for what has become Coastal Virginia Offshore Wind and its leaders now project that the 180-tunrbine, 2.6-gigawatt regulated project will be brought into service by the end of 2026. Dominion will have spent $3 billion on work by the end of this year and is projecting capex on the project of $3.2 billion next year and another $2.6 billion in 2025.
Securing a partner to help fund those investments and then benefit from its operation later this decade will be the last step in a strategic review Blue launched last year to improve Dominion’s finances and stock performance. Working on the offshore subsidiary enabling legislation was part of that plan, which also has including paying down debts with the proceeds from the sale of Dominion’s remaining stake in its Cove Point liquefied natural gas unit and the divesture of its gas utilities.
As part of their quarterly update, Blue and Ridge also noted that the latest levelized cost of energy analysis for CVOW now stands at $77 per MWh (in 2027 dollars), which is solidly below the company’s previous range of $80 to $90 per MWh. That $77 estimate would change by about 90 cents for each $100 million in capital costs change in the project’s total $9.8 billion budget.
Shares of Dominion (Ticker: D) jumped Nov. 3 on the earnings news and related commentary and rose another 4.5% Nov. 6 to close at $45.59. They are, however, still down about 20% from six months ago, which has cut the company’s market capitalization to about $38 billion.