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The U.S. offshore wind industry has faced other difficulties, including soaring inflation and supply chain snarls
Bloomberg News
Dominion said in court papers that it is losing about US$5 million a day on vessel contracts alone because of the
Dominion Energy Inc. can restart construction of a wind project off the coast of Virginia while it continues a legal fight over the Trump administration’s order to stop the US$11 billion development, a federal judge ruled.
United States District Judge Jamar Walker in Norfolk, Virginia, issued a preliminary injunction Friday. It blocks the government from enforcing its stop-work order after Dominion claimed it was suffering irreparable harm and losing millions of dollars every day the project sits idle. Walker is the third federal judge this week to allow a halted wind development to resume construction.
The Virginia unit of Dominion Energy is among several companies suing the U.S. Department of the Interior over a Dec. 22 order suspending five East Coast wind projects for 90 days over unspecified national security concerns. But the developers sued, with some winning temporary reprieves. Earlier this week, a federal judge ruled Norway’s Orsted A/S can resume development of its project off Rhode Island while its lawsuit proceeds and a different judge issued a similar ruling for Equinor ASA’s Empire Wind project near New York.
The Virginia judge echoed concerns expressed in the other cases. Walker, who was appointed by former President Joe Biden, said the government had failed to demonstrate that the “national security risk is so imminent” that the Dominion project should be halted. He added that department’s order was likely arbitrary and capricious and that further delays would cause irreparable harm to the company.
The White House didn’t immediately comment on the decision.
Dominion shares rose 0.6 per cent after the ruling to touch an intraday high of US$61.50.
President Donald Trump has sought to aggressively thwart the growth of the industry as he rolls back Biden-era climate policies and champions fossil fuels. This latest move also comes after Trump froze permitting for all wind projects on federal land and oceans on his first day back in office, though a federal judge ruled that his decree was illegal.
The U.S. offshore wind industry has faced other difficulties, including soaring inflation and supply chain snarls in recent years. And even after some of those problems subsided, developers have since been hit by rising costs from Trump’s tariffs. All told, that’s led to project cancellations, delays and writedowns.
Dominion said in court papers that it is losing about US$5 million a day on vessel contracts alone because of the construction halt, with more costs from idled workers and contractual penalties. The company says more than two-thirds of the expected US$11.2 billion total cost has already been spent on the Virginia project, which was expected to be completed this year and provide power for 660,000 homes.
Alternative investment firm Stonepeak Partners acquired a 50 per cent stake in the wind project in 2024 and has agreed to fund 50 per cent of project costs up to US$11.3 billion, with additional sharing of costs in excess of that amount. According to analysts at Jefferies Financial Group Inc., Dominion and Stonepeak are sharing about US$225 million in monthly costs associated with the stop-work order.
Dominion said in a statement last month that the project is “essential for American national security and meeting Virginia’s dramatically growing energy needs.” That includes electricity for the “world’s largest concentration of data centres” and many federal government and military facilities, including the Pentagon, attorneys for the company wrote in court records.
In a court filing, the operator of the 13-state power grid that includes Virginia said the Dominion project is important to meeting the rapidly increasing electricity demand and that further delay will cause “irreparable harm” to the 67 million people who live in the region.
The U.S. government has argued the move to pause construction was valid because it was done for national security reasons. The stop-work order adequately explained that the Department of Defense provided new classified information about advances in “adversary technologies” that “could raise national security issues with offshore wind projects,” government lawyers said in a December court filing.
Attorneys for Dominion contend in court papers the agency’s reasons for the pause weren’t “plausible” because national security considerations were already addressed during the permitting process. They also claimed the government infringed on Dominion’s constitutional due process rights by failing to give notice and an opportunity for a hearing before issuing the order.
—With assistance from Mark Chediak and Skylar Woodhouse.
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