Dominion Energy

Dominion Lands on Stonepeak as Virginia Offshore Wind Partner

Feb. 23, 2024
The investment firm is paying roughly $3 billion for a 50% noncontrolling stake in the 176-turbine project scheduled to be completed in 2026.

Bob Blue has found his dance partner.

Blue, the chair, president and CEO of Dominion Energy Inc., on Feb. 22 announced that the Richmond-based utility has signed an agreement with investment firm Stonepeak Partners LP to sell half of the Coastal Virginia Offshore Wind project for about $3 billion. The transaction, which is expected to close by year’s end, is one Blue teased late last year and checks a big box on Dominion’s to-do list.

New York-based Stonepeak specializes in infrastructure and real-assets investments and manages more than $61 billion of assets. The firm’s purchase agreement for its Coastal Virginia Offshore Wind is for a noncontrolling stake and leaves Dominion in full control of the construction and operation of CVOW, which is on track to meet its budgeted cost of $9.8 billion. After closing, Stonepeak and Dominion will split the capital needed to complete construction of the offshore project.

CVOW is projected to be fully built by late 2026 offshore Virginia Beach. The 2.6-gigawatt project will generate power for up to 660,000 homes and comprise 176 turbines and three offshore substations.

Blue and the Dominion team plan to use the proceeds from the Stonepeak deal to pay down some of the company’s debt.

“The transaction will improve our credit profile, reduce project concentration risk and lower our financing needs during construction,” Blue said on a conference call, later noting that there had been interest from many possible financing partners. “We expect the transaction to be viewed as unambiguously credit positive and that is a very key benefit for our customers.”

Dominion announced its Stonepeak deal alongside fourth-quarter earnings of $273 million, which was down from $344 million in the same period of 2022 because of a $71 million loss from discontinued operations. Operating income jumped to $712 million from $253 million in late 2022, when the company booked a large impairment charge related to some nonregulated solar generation assets.

Shares of Dominion (Ticker: D) slipped 1.5% to $45.60 after the earnings and Stonepeak news. Over the past six months, they are also down slightly, which has left the company’s market capitalization at about $38 billion.

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