Dominion Energy, Inc.‘s (NYSE:D) subsidiary Virginia Electric and Power Company agreed to acquire the Kitty Hawk North Wind offshore wind lease and associated developments (known as CVOW-South) from Avangrid, Inc. (NYSE:AGR) for $160 million.

The transaction value comprises $117 million for the lease acquisition and $43 million for related development cost reimbursement to Avangrid.

Notably, the acquisition includes a payment of approximately $3,000 per acre for the nearly 40,000-acre lease.

CVOW-South is projected to generate 800 MW of offshore wind generation capacity by the 2030s, providing electricity for 200,000 homes and businesses.

Virginia Electric and Power Company is constructing the 2.6-GW CVOW project, which is located 25 miles north of the CVOW-South lease.

The project is on track for completion by late 2026. Since May 22, 2024, 25 monopiles have been installed, and 70-100 monopiles are aimed for by the end of October.

Dominion Energy and Avangrid anticipate closing the transaction in the fourth quarter of 2024, pending approvals from the Bureau of Ocean Energy Management and the City of Virginia Beach.

Robert M. Blue, chair, president and chief executive officer of Dominion Energy, said, “The Virginia model for regulated offshore wind development is proving to be an enabler of on-time and on-budget wind generation at exceptional relative value for our customers and is the model we would intend to pursue for any future offshore wind development.”

As of March-end, Dominion Energy had cash and cash equivalents of $265 million.

Investors can gain exposure to the stock via BNY Mellon ETF Trust BNY Mellon Global Infrastructure Income ETF (BATS:BKGI) and and WBI Power Factor High Dividend ETF (NYSE:WBIY).

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Price Action: D shares are up 0.20% at $49.43 premarket at the last check Tuesday.

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