A bill that would have allowed other companies to supply Virginia with offshore wind energy has been delayed until 2025. The legislation, proposed by Sen. Creigh Deeds, aimed to open up a competitive bidding process for non-utility developers to provide the needed electricity. However, the bill did not have enough support to pass the Senate Commerce and Labor Committee, prompting Deeds to consider sending it to the Commission on Electric Utility Regulation for further consideration.
The proposal was backed by major renewable energy companies and aimed to help Virginia meet its goals on alternative energy. Under the Virginia Clean Economy Act, Dominion Energy is required to propose the construction or purchase of offshore wind facilities capable of producing up to 5.2 gigawatts of electricity by 2035. Dominion is currently constructing the Coastal Virginia Offshore Wind project to fulfill part of this requirement.
Deeds’ bill would have allowed Dominion to fulfill its obligations by purchasing energy from a third-party offshore wind developer. It would have also required the state Department of Energy to hold a competitive bidding process to secure the remaining 2.6 gigawatts of wind energy needed. The winning bid would be selected based on construction costs, economic and environmental impacts, and inflation predictions.
Non-utility wind developers argued that the bill was necessary because limited wind lease areas could prevent Dominion from building new offshore wind projects. The federal Bureau of Ocean Energy Management oversees the creation of lease areas, and while a lease off Virginia Beach is set for auction, a proposed lease off the coast of Ocean City, Maryland was excluded due to significant costs and mitigation requirements. Allowing other companies to compete for the Virginia lease could help drive down costs for ratepayers.
However, Dominion Energy defended its current approach, stating that the model is working for future projects. The utility is building the largest offshore wind project in the country, which is cost-effective and on schedule. Dominion also expressed concerns about giving oversight of the bidding process to the Department of Energy, as it could erode the regulatory powers of the State Corporation Commission.
Deeds did not formally motion to send the legislation to the Commission on Electric Utility Regulation, but he hopes that the body can review the bill and produce a version that can be passed. The proposed process is similar to a legislative amendment sought by Governor Glenn Youngkin last year, but it was overruled by the General Assembly.
Overall, the bill to open up the offshore wind energy supply in Virginia has been postponed, and further discussions and considerations will take place in 2025.
