Dominion Sells 50% Stake in $10B Offshore Wind Project

Dominion Energy has sold a 50% noncontrolling interest in its 2.6-GW Coastal Coastal Virginia Offshore Wind (CVOW) commercial project to infrastructure investment group Stonepeak. The Richmond, Virginia–headquartered utility in an Oct. 25 financial filing said it received proceeds of $2.6 billion for the sale. The amount represents “reimbursement of approximately 50% of project-to-date capital investment.” Stonepeak is expected to fund “50% of remaining project costs as they are incurred, subject to certain conditions as previously disclosed,” it said.

Dominion said the much-watched offshore wind project—which will comprise 176 Siemens Gamesa SG 14-222 Direct Drive offshore wind turbine turbines and associated monopile foundations, each with a capacity of 14.7 MW—remains on time and on budget to begin operation in late 2026. Construction kicked off in February 2024 and is progressing. In May, the project installed the first six monopiles in the Northwest corner of the project lease area.

The sale of half its interest in CVOW completes a business review initiative to reduce debt by $21 billion and address “foundational concerns that have eroded investor confidence” in the company over several years. Dominion CEO Robert Blue earlier this year said debt reduction is an important pillar in the company’s now complete transformation to a “pure-play” state-regulated utility that serves more than 4 million customers in the Southeast. The company is bracing for substantial growth as a utility to serve robust regional economic growth, including from the world’s largest data center market (by far), which is clustered in Northern Virginia.

“Dominion Energy has now achieved 100% of the business review target. These actions have improved the company’s balance sheet, reduced its risk profile, and established a renewed focus as a pure-play, state-regulated electric utility business,” the company said last week.

The CVOW transaction follows the September 2023 sale of its 50% interest in Cove Point LNG, a liquefied natural gas import/export and storage facility on the Chesapeake Bay in Lusby, Maryland, for $3.3 billion to Berkshire Hathaway Energy. In March 2024, the company sold its Ohio natural gas utility—The East Ohio Gas Company—to Enbridge for $6.6 billion. Earlier this year, it also closed on the sale of its Salt Lake City, Utah-based natural gas utility Questar Gas Company, and its cost-of-service gas supply company, Wexpro Co., also to Enbridge for $4.3 billion. And on Oct. 1, it closed on the sale of its Gastonia, North Carolina–based natural gas utility, Public Service Co. of North Carolina, to Enbridge for $3.2 billion.

The CVOW transaction, which stems from a February 2024 agreement, establishes a limited liability company (LLC), OSW Project, with 100% of OSW’s Class A units allocated to Dominion subsidiary Virginia Power and 100% of its Class B units sold to Stonepeak for $2.6 billion.

Under the LLC agreement signed on Oct. 22, Virginia Power and Stonepeak are jointly responsible for funding the remaining CVOW construction, capped at a total project cost of $11.3 billion. If construction expenses surpass this threshold, Stonepeak may elect to contribute additional capital. If Stonepeak opts out, Virginia Power has the right to cover the extra costs, which would proportionally increase its ownership share in the OSW Project LLC. The agreement notably includes a financial incentive for cost management: If total project costs fall below $9.8 billion, excluding financing costs, Virginia Power will receive an additional $100 million from an initial withholding by Stonepeak. However, if costs exceed this $9.8 billion threshold, the withholding amount will decrease, with no additional funds released to Virginia Power if expenses go beyond the $11.3 billion cap.

As POWER reported in November 2021, Dominion initially projected a $9.8 billion installation cost for the project in an estimate filed with the Virginia State Corporation Commission. The estimate accounted for detailed engineering, competitive bidding, and component costs, including 176 Siemens Gamesa turbines, transmission infrastructure, and contingency funds.

The LLC agreement grants Virginia Power majority control of OSW’s seven-member board, allowing it to appoint a majority of directors as long as it holds a minimum 25% interest and remains the project manager. Stonepeak retains customary minority rights, including the ability to appoint directors based on ownership levels and oversight of key project decisions. Additionally, the agreement provides for quarterly cash distributions based on performance and includes governance protections, transfer rights, and other stipulations for both parties.

Separately, Virginia Power and OSW entered into a project management agreement granting Virginia Power comprehensive control over the project’s management, design, procurement, and operations. Under that agreement, Virginia Power will lead CVOW’s construction, commissioning, and eventual decommissioning, ensuring continuity in project oversight as mutually agreed upon with Stonepeak.

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).