Tariffs could add $500M to cost of Virginia Beach offshore wind farm, Dominion tells investors

Yahoo

06-05-2025

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Yahoo is using AI to generate takeaways from this article. This means the info may not always match what's in the article. Reporting mistakes helps us improve the experience. Generate Key Takeaways
The offshore wind staging area at the Portsmouth Marine Terminal. (Photo courtesy Port of Virginia)
By Katherine Hafner/WHRO
Dominion Energy expects to pay more to complete the Coastal Virginia Offshore Wind project because of the Trump administration's new taxes on imported goods including monopile foundations and turbine towers.
The $10.8 billion offshore wind farm about 30 miles off the Virginia Beach coast will be the nation's largest, consisting of 176 turbines that generate about 2.6 gigawatts of electricity, or enough to power up to 660,000 homes.
Dominion CEO Bob Blue told investors last week that if current tariffs continue through construction of the project late next year, the utility would expect about $500 million in added costs.
'Of course, changes to future tariff policy could affect these estimates,' he said. 'It's difficult to fully assess the impact tariffs may have to the project's final cost, as actual costs incurred are dependent upon the tariff requirements and rates, if any, at the time of delivery of the specific component.'
So far, import taxes have increased project costs by about $4 million, Blue said.
That's on top of other rising costs Dominion announced earlier this year . The utility said in February that the initial price tag of the project, $9.8 billion, jumped by nearly 10% because of higher costs from building onshore electrical interconnection and network upgrades mandated by the regional electric grid operator.
Under a settlement approved by state regulators a few years ago, Dominion is only allowed to surcharge customers for about half of the additional costs.
As a result, the utility said the average household in Virginia can expect to pay about 43 more cents per month over the life of the wind farm.
To account for an expected $120 million in added tariff costs through the end of the next quarter, Dominion now plans to add another 4 cents to monthly energy bills.
'Let me be clear: CVOW remains one of the most affordable sources of energy for our customers,' Blue said Thursday.
He said the company does not anticipate problems with actually receiving materials needed for the wind farm including turbines from Siemens Gamesa, a Spanish-German subsidiary of Siemens Energy that is the world's largest maker of offshore wind turbines. It's just added costs while doing so.
Dominion is about halfway through constructing the project and plans to finish on time late next year. It's expected to start generating electricity by early next year.
The Virginia offshore wind project is one of only a handful that are fully permitted and under construction along the East Coast, as the Trump administration ramps up efforts to halt the industry .
Dominion is also fending off a lawsuit from a coalition of conservative groups that argue federal officials failed to adequately consider the wind farm's potential impacts on endangered whales .
The company says its permitting process was rigorous and that several measures are in place to protect whales, including trained observers who watch for marine mammals and 'bubble curtains' to dampen the sound of underwater construction.
It's unclear whether the federal government under Trump will continue to defend the Virginia Beach project in court. The government's lawyers are expected to file their latest response to the lawsuit later this summer.
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