Dominion pushed to take lead in offshore wind

Virginia Offshore Wind pushes Dominion to lead clean energy, build utility-scale wind farms off Virginia's coast, create green jobs, expand transmission lines, and balance costs for ratepayers amid leasing, environmental reviews, and manufacturing growth.

A new group promoting wind power off Virginia's coast challenged the state's largest utility to step up its investment in harnessing Atlantic winds, including development of a wind farm.

VA4Wind, a coalition of environmentalists and "green" jobs advocates, is nudging Dominion Virginia Power to take a lead in offshore winds to promote a clean energy source that could create thousands of jobs and power hundreds of thousands of homes in the commonwealth.

The coalition said it's seeking Dominion's commitment to include plans for offshore winds in its 2011 annual filing with state regulators, even as it seeks approval for a power station in Southwest Virginia, and, by the end of 2013, have in place plans to build a utility-scale wind farm off Virginia's coast.

"Today, we are calling on Dominion to join our team and work together with us to bring offshore wind energy to Virginia," said Glen Besa, director of the Sierra Club's Virginia chapter.

While Dominion officials said they are committed to tapping offshore winds, they must be mindful of the ultimate costs to ratepayers, especially amid a proposed 6.9 percent rate hike this year.

"The costs must become competitive with other conventional or renewable forms of generation for the technology to be chosen," Jim Norvelle, a spokesman for Dominion, wrote in an e-mail. "Dominion continues to pursue cost reduction options and would put plans in place to build when it is cost effective to do so."

Norvelle also said many factors are beyond Dominion's control, such as leasing and environmental permits and reviews.

The utility has made steps to tap offshore winds, including studying the possibility of an offshore electric transmission line to support wind farm development as part of broader reliability investments now underway.

The study is the first step in designing, building and operating a transmission line needed to make offshore wind resources available to its customers. The study should be finished this year and will help the utility evaluate the best options to support multiple offshore wind projects in Virginia.

While offshore winds have been used widely and for many years in Northern Europe, the U.S. is lagging in technology and manufacturing facilities.

Offshore proponents have said Virginia could be a leader in developing wind farms off its coast because of optimal conditions 20 miles offshore, a deep-water port system and the potential to create a manufacturing base in the Hampton Roads area. The nation's nuclear-powered aircraft carriers are built in Newport News, and bids for nuclear power have been soaring nationwide.

The coalition released a letter to Thomas F. Farrell II, CEO of the utility's parent Dominion Resources Inc., in which it stressed that the state's offshore wind industry "will only flourish with your company leading the way."

"We would like to see your team continue to lead the way in innovation by adding utility-scale offshore wind energy to your generation mix," the letter, dated May 6, states.

Renewable energy now accounts for 4 percent of Dominion's electricity. It is aiming for 15 percent by 2025.

Mary Doswell, a Dominion senior vice president who is on the board of the Virginia Offshore Wind Development Authority, agreed with the coalition that the potential for wind generation is great, but costs remain the biggest stumbling block.

"That's the dilemma," she said in an interview. "We need to get the costs down. Dominion is looking at how we can track that."

Doswell compared the estimated 23-cents per kilowatt hour for electricity generated by Cape Winds, the Massachusetts wind farm that was the first approved in the U.S., and the 10-cent per kilowatt hour rate charged Dominion residential customers. "As you can see, that's quite a premium."

The Cape Winds wind farm cost about $2.6 billion to develop. Most of Dominion's electricity is now produced by coal-fired generating stations, as hearings on a coal-burning facility move forward in the state.

Besides the Sierra Club, coalition members include Chesapeake Climate Action Network, Green Jobs Alliance and Virginia Interfaith Power and Light, groups that have led a coalition opposing a power station in Virginia as well.

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