A federal judge has ruled that Dominion Energy Inc. can proceed with construction on a Virginia offshore wind project while its legal challenge against a Trump administration order halting the $11 billion development continues.
This decision represents the third instance this week where an offshore wind project has been permitted to restart in defiance of a government stop-work order. On Friday, US District Judge Jamar Walker in Norfolk, Virginia, granted a preliminary injunction preventing the Interior Department from enforcing its directive, following Dominion’s argument that it was incurring millions in losses for each day the project was stalled.
Dominion Energy’s Virginia division is one of multiple companies suing the government over a December 22 order that suspended five East Coast wind projects for 90 days, citing unspecified national security concerns. This week, a federal judge also allowed Norway’s Equinor ASA to resume work on its Rhode Island project, and another judge issued a comparable ruling for Ørsted ASA’s Empire Wind project near New York.
The Virginia judge’s Friday ruling mirrored sentiments from other courts. Judge Walker stated the government did not successfully show the “national security risk is so imminent” as to justify stopping Dominion’s project. He further noted the department’s order was probably arbitrary and capricious, and that additional delays would inflict irreparable harm on the company.
Following the ruling, Dominion’s stock increased by 0.6%, reaching an intraday peak of $61.50.
Read More:
In a response that mirrored its reaction to prior court defeats, the White House vowed to continue its opposition to offshore wind. “The Trump administration has paused the construction of all large-scale offshore wind projects because our number one priority is to put America First and protect the national security of the American people,” stated White House spokeswoman Taylor Rogers. “The administration looks forward to ultimate victory on the issue.”
Dominion announced it would “now focus on safely restarting work” on the project’s 176 turbines, with some beginning to generate electricity within weeks. “While our legal challenge proceeds, we will continue seeking a durable resolution of this matter through cooperation with the federal government,” the company said in an emailed statement.
President Donald Trump has aimed to curb the industry’s expansion as he reverses Biden-era climate policies and promotes fossil fuels. The stop-work order follows Trump’s move to freeze permitting for all wind projects on federal land and waters on his first day back in office, although a federal judge later ruled that action illegal.
The US offshore wind sector has encountered other challenges in recent years, such as high inflation and supply chain disruptions. Even after some issues eased, developers have been impacted by cost increases resulting from Trump’s tariffs, leading to project cancellations, delays, and writedowns.
Mounting Losses
According to court documents, Dominion reported losses of approximately $5 million per day just on vessel contracts due to the construction pause, with additional expenses from idled workers and contractual penalties. The company stated that over two-thirds of the project’s total anticipated cost of $11.2 billion has already been invested. The Virginia project was slated for completion this year and is designed to power 660,000 homes.
Alternative investment firm Stonepeak Partners obtained a stake in the wind project in 2024 and has committed to financing 50% of project expenses up to $11.3 billion, with further cost-sharing beyond that threshold. Analysts at Inc. estimate that Dominion and Stonepeak are jointly bearing around $225 million in monthly costs related to the stop-work order.
Dominion asserted in a statement last month that the project is “essential for American national security and meeting Virginia’s dramatically growing energy needs.” This includes supplying power to the “world’s largest concentration of data centers” and numerous federal government and military installations, including the Pentagon, the company’s attorneys noted in court records.
The US government has maintained that the construction pause was justified for national security reasons. Government lawyers said in a December court filing that the stop-work order sufficiently explained that the Department of Defense had supplied new classified information regarding advances in “adversary technologies” that “could raise national security issues with offshore wind projects.”
However, these arguments were dismissed by three separate judges, all of whom had access to confidential details of the national security claims not made public. The judges included one appointed by Trump and another by former President Ronald Reagan. Judge Walker was appointed by President Joe Biden.
Dominion’s attorneys argue in court filings that the agency’s rationale for the pause was not “plausible,” as national security issues were already evaluated during the permitting process. They also alleged the government violated Dominion’s constitutional due process rights by not providing notice or a hearing opportunity before issuing the order.
The case is Virginia Electric and Power Company v. United States Department of the Interior, US District Court, Eastern District of Virginia (Norfolk).