Dominion's Offshore Wind Costs Jump $288M on PJM Upgrades, Tariffs
Dominion Energy’s Coastal Virginia Offshore Wind project will now cost about $11.7 billion, up nearly $300 million since April, Utility Dive reports, citing the company’s second-quarter SEC filing.
Market Impact
Dominion attributed the $288 million increase to revised network upgrade costs assigned by PJM Interconnection, tariffs imposed by the Trump administration in April, and updated turbine installation projections, according to the company’s filing. The project’s completion timeline has also slipped, with all work now expected to wrap by the end of 2027 instead of early 2026 as previously projected.
The 2.6-GW project is 81% complete, and more than 450 MW of turbine capacity is already installed and producing power, Dominion CEO Robert Blue said on the company’s earnings call. “Every type of component is in service and functioning as expected,” Blue said, adding that Dominion has been maximizing CVOW output at grid operators’ request during recent demand peaks. Jefferies analyst Julien Dumoulin-Smith called the cost hike “discouraging” but “not a major surprise” for investors. Dominion reported second-quarter net income of $340 million, down from $760 million a year earlier, with rising offshore wind costs cited as one of several drags on earnings.
What It Means for Subcontractors
- Interconnection cost pass-throughs are now a real line-item risk. PJM’s revised network upgrade assignment was a named driver of the $288 million overrun, so subs bidding balance-of-plant or substation work on offshore wind and other PJM-territory generation projects should build contingency for late-stage interconnection cost changes into their bids.
- Tariff exposure hits turbine and foundation supply chains directly. Dominion specifically cited tariffs imposed in April 2026 as a cost factor. Marine construction, foundation installation, and turbine-component subs sourcing imported steel or equipment should revisit contract escalation clauses now, not after award.
- Schedule slippage to end of 2027 (from early 2026) means longer mobilization windows but also longer exposure to cost inflation. Vessel crews, offshore installation trades, and marine logistics subs on CVOW should confirm updated milestone dates directly with Dominion’s project team rather than relying on original schedules.
- Watch the NextEra merger review for procurement signals. Virginia’s State Corporation Commission has set an accelerated six-month review with hearings starting Nov. 17, 2026. A settlement or approval could reshape Dominion’s capital plans and future offshore wind and grid-hardening work; subs with existing Dominion relationships should track filings ahead of that date.
- Millstone nuclear contract talks could open separate work. Dominion said it expects Connecticut to rule soon on Millstone’s zero-carbon procurement bid, after which contract negotiations would begin, a potential signal for mechanical, E&I, and outage-support subs serving that facility through 2055 if a license extension proceeds.
