Dominion Energy has finalized a deal to sell a 50% non-controlling stake in the 2.6-gigawatt Coastal Virginia Offshore Wind (CVOW) project to infrastructure investor Stonepeak for $2.6 billion.

The close, announced Oct. 22, also marked the completion of Dominion’s business review targeting $21 billion of debt reduction initiatives. The steps were taken to improve the company's balance sheet, reduce its risk profile and establish the company as a pure-play, state-regulated electric utility business, Dominion said.

At the CVOW deal’s closing, Dominion received $2.6 billion in proceeds, which represented reimbursement of about 50% of project-to-date capital investment. Stonepeak will fund half of the remaining project costs, subject to certain conditions, Dominion said in a news release.

“We are pleased to partner with Stonepeak on CVOW, which continues to proceed on-time and on-budget, consistent with our previously communicated timing and cost expectations,” said Dominion Energy CEO Robert Blue. “Stonepeak is one of the world’s largest infrastructure investors in large energy projects such as offshore wind, and its financial participation in CVOW will benefit both the project and the people who will rely on electricity from CVOW to keep the lights on and fuel economic growth in the Commonwealth."

The approximately $10-billion CVOW project is currently under construction. When complete, the 176-turbine offshore wind farm with three offshore substations is expected to provide enough power for about 660,000 homes. Sitting on a nearly 113,000-acre lease area off Virginia Beach, CVOW is the largest offshore wind farm under construction today in the U.S.

Rob Kupchak, senior managing director at Stonepeak, said the investment “exemplifies many of the core tenets of essential infrastructure that we invest behind at Stonepeak.”

Dominion will retain full operatorship and control of construction for CVOW.

The Virginia-based utility’s other debt reduction moves included selling its 50% stake in Cove Point LNG to Berkshire Hathaway Energy for $3.3 billion in 2023 and selling its three natural gas distribution companies to Enbridge in a $6.6 billion deal. Those companies were East Ohio Gas Co., Public Service Co. of North Carolina Inc., Questar Gas Co. and Wexpro Co.

The Dominion-Stonepeak deal was announced in February 2024 as some offshore wind players recovered from a rough year marked by rising interest rates, inflationary pressures and supply chain obstacles.

Dominion Energy is scheduled to discuss its third-quarter 2024 earnings Nov. 1.

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