Dominion to sell 50% noncontrolling inerest in Virginia offshore wind project

Dominion announced an agreement to sell a 50% noncontrolling interest in the Coastal Virginia Offshore Wind commercial project – CVOW – to Stonepeak through the formation of an offshore wind partnership. Under the terms of the agreement, Dominion Energy will retain full operational control of the construction and operations of CVOW. Stonepeak is an infrastructure investors with more than $61B in assets under management. Stonepeak will invest in a newly formed subsidiary of Dominion Energy Virginia. The subsidiary will be a public utility in Virginia entitled to recover its prudently incurred costs of constructing and operating the project under the existing Virginia offshore wind rider program. Cost-recovery will utilize the capital structure of and cost of capital at Dominion Energy Virginia. Dominion Energy will retain full operational control of the construction and operations of CVOW. Stonepeak will own a 50% noncontrolling equity interest and will have customary minority interest rights. The transaction is expected to close by the end of 2024 after all required approvals and consents have been received. At closing, Dominion Energy expects to receive proceeds of approximately $3B, representing 50% of the CVOW construction costs incurred through closing less $145M. If final construction costs of CVOW are $9.8B or less, excluding financing costs, Dominion Energy will receive $100M of the initial withholding. The transaction is expected to improve the company’s estimated 2024 consolidated FFO-to-debt by approximately 1.0% and reduce the company’s overall financing needs during construction. The 2.6-gigawatt CVOW, the largest offshore wind farm in the U.S., will consist of 176 turbines and three offshore substations in a nearly 113,000-acre lease area off the coast of Virginia Beach.