February 10th, 2023: In December, the Virginia State Corporation Commission approved the Coastal Virginia Offshore Wind (CVOW) Project, the largest offshore wind project in North America. Located 24 nautical miles off the coast of Virginia Beach, the CVOW Project will have 176 wind turbines with a combined capacity of 2,587MW, able to power approximately 660,000 homes and avoid 5 millions tons of CO2. The project is estimated to be completed by the end of 2026 with a capital cost of $9.6 billion.
A key issue in the case was the liability for any cost overruns or under-performance of the project. The Commission accepted a settlement agreement between Dominion Energy Virginia and Intervenors that protects ratepayers if the project experiences price overruns or poor performance. In the agreement, Dominion agreed to meet an average capacity factor of 42% and specific cost sharing provisions. If the cost of the CVOW project falls between $10.3 billion and $11.3 billion, Dominion and its customers would split the costs evenly. If the costs exceed $11.3 billion, Dominion will bear all costs above that amount.
Sierra Club focused our intervention on Dominion’s Economic Development Plan, a requirement under the Virginia Clean Economy Act to address priority hiring and training of veterans, local workers and workers from historically economically disadvantaged communities, procure equipment from Virginia or US-based manufacturing, and consult with the Virginia Economic Development Partnership and Chief DEI Officer. Our goal was to force Dominion to rewrite its Economic Development Plan to articulate a clear DEI vision, identify and track specific DEI metrics, set targets to meet those metrics, address DEI barriers in the workforce and supply chains, and address the access to capital barriers for locally owned businesses, veteran owned businesses and businesses in historically economically disadvantaged communities.
Alongside the Nansemond Nation and Public Staff, Sierra Club entered into a proposed settlement agreement where Dominion agreed to update its Economic Plan to include aggregated racial demographics, veteran status, and geographic location of all Dominion-hired employees, and agreed to increase its diverse workforce by 1% point per year, with the goal of reaching 40% by the end of 2026. They also agreed to report on the diversity of its supplier metrics and establish an advisory committee to make recommendations on supplier diversity and access to capital strategies and hold at least 10 business opportunity expos, with at least 5 held in conjunction with diverse or small business organizations. Unfortunately, in its original August 2022 Final Order, the VA State Corporation Commission did not adopt this proposed settlement agreement or the additional DEI metrics and targets. Despite this, it was a huge step forward for Dominion to agree to those terms and we will continue to advocate for Dominion to voluntarily adopt these equity measures.
Sierra Club was represented by Cale Jaffe, Director, Environmental Law and Community Engagement Clinic, University of Virginia School of Law with support from Environmental Law Program attorney Dori Jaffe. Credit also goes to the Virginia Chapter Offshore Wind Lead Eileen Woll; Virginia Chapter Acting Coordinator, Gustavo Angeles, BCC Representative Mary-Stuart Torbeck, and Ricky Junquera in Communications.