Summary
Dominion Energy, Inc. (D) announced a significant development regarding its Coastal Virginia Offshore Wind (CVOW) project through its subsidiary, Virginia Electric and Power Company. The company has entered into a definitive agreement to sell a 50% non-controlling interest in CVOW to Dunedin Member LLC, an affiliate of Stonepeak Partners. This transaction is structured as an equity capital contribution, where the investor will contribute approximately $3 billion in cash for a 50% stake, while Virginia Power will contribute its rights and interests in the project to a newly formed limited liability company, OSW Project LLC. Dominion Energy will retain operational control of the project's construction and operations, which is a key point for investors concerned about project execution.
Key Highlights
- 1Dominion Energy is selling a 50% stake in its Coastal Virginia Offshore Wind (CVOW) project.
- 2The transaction involves an equity capital contribution of approximately $3 billion from the investor (Dunedin Member LLC, affiliated with Stonepeak Partners).
- 3Virginia Power will retain full operational control over the construction and operations of the CVOW project.
- 4The closing of the transaction is expected by the end of 2024, subject to regulatory approvals from Virginia and North Carolina commissions, and other consents.
- 5The project's total construction cost is estimated up to $11.3 billion, with potential for cost overruns up to $13.7 billion, where the investor may have optional additional contributions.
- 6Dominion Energy could receive a portion of an initial $145 million withholding, depending on the final construction costs, with reductions if costs exceed $9.8 billion and no reimbursement if costs exceed $11.3 billion.
- 7The agreement includes provisions for board representation and certain investor protections, as well as a termination fee of $200 million payable by the investor under specific conditions.