Virginia Gov. Glenn Youngkin proposed requiring a competitive procurement process for any second wave of offshore wind development serving the state, amending an energy bill lawmakers passed in March.
The legislation, H.B. 2444 in the state House and S.B. 1441 in the Senate, passed both chambers in February. It would require the Virginia State Corporation Commission (SCC) to consider benefits to the state in reviewing requests by Dominion Energy Virginia for recovery of offshore wind projects. The legislation would also accelerate the deadline for offshore wind development to 2032 from 2034.
The amendments by Youngkin (R) head back to the General Assembly on April 12, requiring a majority vote to pass. The governor's changes specify that any purchase or development by the Dominion Energy Inc. subsidiary of offshore wind capacity incremental to the amount produced by the planned Coastal Virginia Offshore Wind project must be procured under a competitive process subject to oversight and approval by the SCC.
"When overseeing the solicitation, the commission shall consider the benefits arising from project construction and operation and the manufacture of wind turbine generator components and subcomponents in the commonwealth, benefits to ports in the commonwealth and other economic development benefits," according to the amended legislation.
The revision relates to further expansion of offshore wind for the state, including power purchase agreements or additional phases of ongoing projects, but specifically excluded the 2,587-MW Dominion project approved in December 2022 in its current form.
If the amendments do not receive a majority vote, the legislation will be sent back to the governor in its original form and begin another 30-day pass/veto period.
Guggenheim analysts noted that Youngkin's proposal focuses on procurements after the Coastal Virginia Offshore Wind project and "does not impact the current credit repair process/strategic review, nor the associated optionality around a passive stake sale" in the current project.
"Utilities post [Inflation Reduction Act] are on some of the most competitive footing ever, however, the last-minute move by the governor came as a surprise in our view and demonstrates the heightened activism by the executive branch this session," Guggenheim analysts said in an April 3 report.
Youngkin also signed into law a bill to allow Virginia Electric and Power Co. to take on a private equity partner for the Virginia Beach Offshore Wind Project and proposed other amendments to regulatory reform legislation related to the utility and to Appalachian Power Co.
Dominion executives said Feb. 8 that they were awaiting clarity on the regulatory reform legislation before providing updates on their "top-to-bottom" review of the business.
State lawmakers passed legislation in February to allow Dominion to sell a passive stake or minority interest in the Coastal Virginia Offshore Wind project.
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