COMMONWEALTH OF HOUSE OF DELEGATES

RICHMOND

o o G=> Ocoo 55 3" O_ -r; I om I Wednesday October 3, 2018 w

*0 oo o— State Corporation Commission x rno Tyler Building xm 1300 E. Main St. » Richmond, VA 23219

RE: Case No. PUR-2018-00121

Dear State Corporation Commissioners:

As members of the Virginia General Assembly, we write in support of a finding by the State Corporation Commission that the construction of the Coastal Virginia Offshore Wind (CVOW) project, is prudent.

If approved, this 12 MW demonstration project could be the first wind turbines in U.S. federal waters and serve as an important initial step towards demonstrating the viability of the technology and its long-term value to Virginia ratepayers. As stated by the General Assembly in the Grid Transformation and Security Act of 2018, CVOW is in the public interest of the Commonwealth and should be a part of a large-scale deployment of clean energy in Virginia.

Virginia-specific challenges to the deployment of offshore wind must be identified and mitigated. Additionally, the Southeast presents its own unique circumstances for offshore wind, and the value of the lessons learned from the CVOW project go far beyond the cost of the electrons generated. That is why we believe this project to be a prudent investment that will help to deliver long-term value to Virginia ratepayers through offshore wind. Three drivers of this value are increased fuel diversification, significant economic development potential, and continually falling prices.

First, offshore will provide multiple benefits to Virginia's fuel mix. It is immune to fuel-price fluctuations seen with traditional resources. Offshore wind is a more predictable, reliable, and consistent resource than other renewable technologies, and it complements the generation profiles of solar and natural gas. m Second, the offshore wind industry has the potential to provide significant economic ^ benefits to Virginia's economy. Large-scale deployment of offshore wind would create a p significant number of well-paying jobs and attract millions in capital investment. A study o commissioned by the Virginia Department of Mines, Minerals and Energy found that locating H construction and manufacturing activities associated with offshore wind in Virginia could create ^ over 1,500 direct jobs. And much like auto manufacturing, producing offshore wind components creates a large ecosystem of co-located suppliers and services.

We as a Commonwealth have been developing policies that reduce our economic reliance on the federal government. By attracting an industry that does not currently exist in the United States, we can further insulate the Commonwealth from any potential reduction in federal spending.

Third, the cost of offshore wind has continued to fall as the industry has matured in Europe. It is anticipated that the U.S. may not only follow this pattern, but accelerate it as a robust pipeline of projects become more certain in the coming years. Recently, 0rsted's Hornsea Project Two off the coast of Yorkshire, England, won a bid with one of the lowest offshore wind prices seen to date. While still behind Europe, growing demand along the East Coast is likely to trigger similarly low prices for offshore wind.

While the cost per kilowatt of the CVOW is higher compared to more traditional resources, measuring this project based solely on that criterion is not consistent with the intent of Senate Bill 966. CVOW is intended to prove the technology will be successful and to gain cost efficiencies that translate into cost-competitive deployment of large-scale offshore wind. This pilot project is a prudent investment and we urge the State Corporation Commission to find that the construction of the CVOW project is prudent. Thank you for your work on behalf of the Commonwealth and for your consideration in this matter.

Thank you,

David Yancey, Tim Hugo Delegate 94th House District Delegate 40th House District

Bob Thomas, Chris Stolle, Delegate 28th House District Delegate 83rd House District t=a

Glenn Davis, ® Delegate 84th House District Delegate 84th House District ^

Danny Marshall Terry Austin Delegate 14th House District Delegate 19th House District

T. Scott Garrett, M.D. Delegate 23rd House District Delegate 18th House District