The executive order signed by President Donald Trump to stop future offshore wind farms on federal ocean leases does not appear to target the Virginia project currently underway. Dominion Energy Virginia reports that it has all of the federal permits needed and will continue to push towards its completion date in late 2026 for Coastal Virginia Offshore Wind.

It is not enough to put on a brave face or to reassure. In reality, the project’s future is at risk. The EO asks the federal bureaucracy “to identify any legal basis for such removal” and to present these options to Trump.

The cost of an annulment is higher than many realize because of the Virginia Clean Economy Act and its mandate to produce renewable energy credits, or pay financial penalties. Virginia should abandon this law.

has previously explained, that under traditional rules for utilities with monopolies, any costs for an abandoned project of this type could be borne by the ratepayers. Virginia State Corporation Commission has approved the $9.8 billion cost of this project (excluding financing). The utility has the right to recover costs after obtaining this approval. Potential stranded cost was $4 billion a year back and it must be much higher now.

Dominion is awaiting approval for a increase in the monthly cost of a residential customer who uses 1,000 kilowatt-hours. This will begin in July. This routine update could be the basis for a discussion on the future of the project. At the very least, it would be possible to determine the total amount of potential stranded cost.

Virginia Clean Economy Act could cost Dominion ratepayers billions of dollars more over the next several decades. The VCEA mandates that the 2.6 gigawatts wind farm generate millions of renewable energy certificate (RECs) in 25 years. If ( in fact when ) Dominion fails to meet its obligations, it will have to either purchase RECs or pay a fine.

A cancellation would be a double whammy to Dominion’s 2.6m customers – the stranded cost for the project, and all the extra RECs purchased or fines in cash. Both costs would be reflected on the power bill for many years.

There is also a third blow, as Virginia needs to continue producing electricity in order to meet the demand. By killing the wind farm, additional power plants will be needed. Ratepayers may also be responsible for these costs. The ratepayers may have to pay for a project that never got built, for the RECs the project won’t produce, and for the electricity the project will never generate.

In some circles, despite the harsh economic reality, there is a war dancing going on around this project. It will be under pressure to close it down, just like all the other plants around the country. Virginia’s electricity consumers, and especially those who pay the highest rates, may want to participate in this debate. The only U.S. project where the risk is entirely on the customer remains this one.

Glenn Youngkin has a message for Washington. He has been a strong supporter of the wind project and our new president. Biden’s White House pushed hard to build these projects through executive orders, and now this new EO tells Trump to make the final decision. Elections can have serious consequences.

CVOW was a bad idea three years ago when the SCC had been ready to impose an extremely reasonable performance standard for the utility, but the utility refused. The Office of the Attorney General turned its back on the performance standard at that time, and the project was approved with or without it.

Accounting is complex when a bad investment decision is made. The opponents who are now celebrating the EO of President Trump haven’t thought this through. Virginia must do this. A realistic assessment may conclude that killing it is cheaper, but this might not be the case.

Theoretically, an annulment forced by a review by the Trump Administration of the project could be accompanied by financial compensation. It could. A financial settlement could be less than what the government would otherwise have spent on tax subsides on the completed project. The new executive order does not mention compensation even though it may be considered a taking.

There would be no federal compensation for building a new source of energy (even if it was more reliable). The Virginia General Assembly should simply repeal the VCEA mandates.

The VCEA is a looming presence over all economic decisions on energy. It applies a financial handcuff, distorting the outcome of every decision. The VCEA should be dissolved, no matter what happens to the CVOW project.