Shares of Dominion Energy (D -4.19%) were moving lower today after the Virginia-based utility company provided an update on an offshore wind project, showing that it would be more expensive than originally planned.
As of 1:04 p.m. ET, the stock was down 4.6% on the news.
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Dominion will pay up for wind power
In a press release last night, Dominion said its Coastal Virginia Offshore Wind (CVOW) project was now about 50% finished and remains on track for completion at the end of 2026.
While that was the good news, the company also said it now expected total project costs to be 9% higher than the original projection, rising from $9.8 billion to $10.7 billion. The increase in costs is due to higher network upgrade costs mandated by PJM, the operator of the electric grid in that part of the country.
Dominion also said it entered into an equity financing deal with Stonepeak, an alternative investment firm, to fund 50% of the cost of the project up to $11.3 billion.
The project is expected to raise residential customer bills by $0.43 per 1,000 kilowatt-hours per month, though that will not be nearly enough to cover the additional costs.
What’s next for Dominion Energy?
Dominion reaffirmed its guidance for 2025 non-GAAP guidance for operating EPS and its long-term operating EPS growth rate of 5%-7%, though it did say it would take a $100 million generally accepted accounting principles (GAAP) charge for increased project costs that won’t be recovered from customers.
Dominion is set to report fourth-quarter earnings on Feb. 12, and investors should expect to learn more about CVOW, as well as any potential impact on the data center market from DeepSeek, as data centers have been a significant source of growth for Dominion. For dividend investors, the utility stock still looks like a good buy.