Robert M. Blue
Chair, President and Chief Executive Officer at Dominion Energy
Thank you, Steven, and good morning. I'll begin my remarks by highlighting our safety performance. As shown on slide seven, our employee OSHA injury recordable rate for the first half of the year was 0.38%, reflecting the continued positive trend from the last two years. This is a good start, but safety is much more than just a number on a page. It's our first core value and represents the well-being of our people. Our focus continues to be on driving workplace injuries to 0. Moving now to CVOW. The project is proceeding on time and on budget, consistent with the time lines and estimates previously provided. Let me start by highlighting the exciting progress we've made on monopile installation. Thus far, we've taken receipt of 72 monopiles at the Portsmouth Marine terminal, representing 40% of the project total. Our partner, EEW, continues to make excellent progress, and we expect deliveries to continue steadily in coming weeks. As shown on slide eight, we began monopile installation using DEME heavy crane vessel the Orion on May 22. As of yesterday, we successfully installed 42 monopiles. After a start-up period during which we successfully calibrated our sound verification process in accordance with our permits, we've been able to ramp the installation rate markedly including achieving two monopile installations in a single day on July 21 and again on July 28. Last week, the project welcomed a second bubble curtain vessel, an important ancillary installation vessel. A bubble curtain is deployed around the pile driving site during every monopile installation as depicted on slide nine. The second vessel will effectively reduce time between installations. In summary, we're confidently on our way to achieving our goal of 70 to 100 monopiles installed during the first of two planned installation seasons. In another important milestone, installation of scour protection for the monopiles began in June.
We've started work on 23 monopiles to date, which is consistent with the final project schedule. Turning now to slide 10 for a few additional updates on permits. We have received all federal permits. This is unchanged. On materials and equipment, we're on track and making excellent progress. two of three offshore substation topside structures have been completed and delivered to SEMco and Denmark for outfitting, 33 Transition pieces have been fully fabricated and 15 have been delivered to the Portsmouth Marine terminal. All 161 miles of onshore underground cable has been manufactured and about half of the 600 miles of offshore cable has been produced. In fact, we expect to begin installing the export cable later this quarter. Scheduled for the manufacturing of our turbines remains on track. Fabrication of the towers for our turbines began in June. It's worth noting that even though we won't begin turbine installation until 2025 per our schedule. DEME recently finished supporting a monopile installation campaign for Moray West. A project off the coast of Scotland that has now successfully installed the same Siemens Gamesa wind turbine model that CVOW will use. Roughly half of the turbines have been installed and the first turbines are already producing power. The lessons learned from that project will benefit our project installation in the future. Moving onshore. Construction activities remain on track, including civil work to support overhead lines, horizontal directional drills, and duct bank to support the underground work and bores where the export cables come ashore. On regulatory, last November, we made our 2023 rider filing, representing $486 million of annual revenue and the final order was received on July 25, approving our revenue request. Turning to slide 11. The project's expected LCOE is unchanged at $73 per megawatt hour.
Project to date, we've invested approximately $4.5 billion and remain on target to spend approximately $6 billion by year-end 2024. Per the quarterly update filing today, current unused contingency is $143 million compared to $284 million last quarter. Use of this contingency is as expected. I'd just note that the current unused contingency as a percentage of the remaining project costs at 3% is equal to the same percentage at the time of the original filing in November 2021, despite being some 33 months further along with the project. The current contingency level continues to benchmark competitively as a percentage of total budgeted costs when compared to other large infrastructure projects we've studied and ones that were completed in the past. We've been very clear with our team and with our suppliers and partners the delivery of an on-budget project is the expectation. Lastly, the project is currently 33% complete and we've highlighted the remaining major milestones on slide 12. Let me now provide a few updates on Charybdis. Since May, we've installed the main crane structures and the Helideck structure as shown on slide 13. And the upper leg construction continues on track. We've commenced the main engine load testing, which is on track. In the coming weeks, we will perform main crane load testing. Turning to slide 14. The vessel is currently 89% complete, up from 85% as of our last update. There's no change to the expected delivery time frame of late 2024 or early 2025, which will be marked by the successful completion of sea trials, after which the vessel will return to port for additional work that will allow it to hold the turbine towers, blades and the cells. There's no change to the vessel's expected availability to support the current CVOW construction schedule, which we anticipate will start in the third quarter next year.
As reflected in today's materials, we've updated the project's current estimated costs, including financing costs to $715 million, compared to $625 million last quarter. The drivers for the increased costs are modifications to accommodate project-specific turbine loads based on final certified weights and dimensions of the equipment and additional financing costs. The modifications will enable Charybdis to handle the latest technology turbine design. Charybdis is vital not only to CVOW but also to the growth of the offshore wind industry along the U.S. East Coast and is key to the continued development of a domestic supply chain by providing a homegrown solution for the installation of offshore wind turbines. We continue to see strong interest in use of the vessel after the CVOW commercial project is complete. Let's turn to South Carolina on slide 15. On July 12, we along with the office of regulatory staff and other interveners submitted a comprehensive settlement agreement in our pending electric rate case for approval by the Public Service Commission of South Carolina. The settlement includes all parties signing on or not opposing and reflects the strong collaboration throughout the process. The settlement is premised on a 9.94% allowed ROE and a 52.51% equity capital structure, compared to rates at the time of our original request in March and offset by the fuel reduction and other factors, the settlement's rate request would represent a net 1% increase for residential customers electric rate. If approved, new rates will go into effect September 1. We look forward to further collaboration with stakeholders in South Carolina. Moving now to data centers on slide 16. As I've said before, we're ramping into the very substantial and growing multi-decade utility investment required to address resiliency and decarbonization public policy goals plus the very robust demand growth we're observing in real time across our system. This growth has been recognized by third parties.
As just one example, Virginia was recently named America's top state for business in 2024. This was Virginia's record sixth time at the top of CNBC's rankings and its third win in five years. A record unmatched by any other state since the study began in 2007. For full year 2024, we expect DEV sales growth to be between 4.5% to 5.5%, driven by economic growth, electrification and accelerating data center expansion. It's worth noting that in July, we registered six new all-time peak demand records and just as we expect, our customers likely had no idea of these demanding load conditions given the high-quality operational performance delivered by our colleagues. The data center industry continues to grow in Virginia. We've connected nine new data centers year-to-date through July, consistent with our expectations to connect 15 data centers in 2024. Since 2013, we've averaged around 15 data center connections per year. However, growth is accelerating in orders of magnitude, driven by the number of requests, the size of each facility and the acceleration of each facility's ramp schedule to reach full capacity. We're taking the steps necessary to ensure our system remains resilient and reliable. We had accelerated plans for new 500 kv transmission lines and other infrastructure in Northern Virginia, and that remains on track. We were awarded over 150 electric transmission projects totaling $2.5 billion during the PJM open window last December. PJM's latest open window, which commenced on July 15, and is anticipated to be equal to or greater in investment needs as the RTO looks to accommodate data center growth both in Northern Virginia and beyond with additional transmission upgrades. We're working expeditiously with PJM, the SCC, local officials and other stakeholders to fast track critical projects. We're committed to pursuing solutions that support our customers and the continued growth of the region.
This includes assessing dispatchable generation needs, especially during winter and on-site backup fuel storage. To that end, in June, we filed a petition with the SEC to construct and operate a backup fuel source for Brunswick and Greensville power stations to support operations and improve system reliability. Additionally, in July, we announced the acquisition of an additional offshore wind leasehold in North Carolina from Avangrid, which we view as an attractive option for future regulated offshore wind development as well as a request for proposals to evaluate feasibility of development of small modular reactors at our North Anna site. These projects reflect an all-of-the-above approach to meet growing demand. When we consider this demand growth, we think about the full value chain, transmission, distribution and generation infrastructure investment that has and will continue to drive utility rate base growth. Given these drivers, we continue to believe there may be opportunities for incremental regulated capital investment towards the back end of our plan and beyond. As I've said before, we will look at incremental capital through the lenses of customer affordability, system reliability, balance sheet conservatism and our low-risk profile. Looking forward, we'll file a new IRP in October. Last year's IRP factored in significant load growth and investment in generation and transmission over the next 15 years to meet that load growth while keeping the cumulative average annual growth in the customer bill below 3%. The most recent PJM DOM zone load projections as shown on slide 17, which were only modestly different than last year's, along with our work to optimize the best ways to meet this load will be factored into our planning for this year's IRP.
Before I summarize our remarks, let me touch on data center cost allocation on slide 18, which has been a topic of investor interest. We routinely examine cost allocations and corresponding rate designs to ensure they're fair and reasonable. Distribution and generation rates are reviewed by the SEC every two years and with our next biennial review in 2025. Transmission rates on the other hand are reviewed by the SEC every year during our rider T1 proceeding. In both proceedings, if the cost of serving one or more customer classes has changed over time, then costs are reallocated to ensure each customer class is paying their fair share. If the cost of serving one customer class has increased, for example, then their cost allocation will increase and the cost allocation for all other customers will decrease. The most important example in recent years has been the significant reallocation of transmission costs from residential customers on to larger energy users such as data centers. Since 2020, residential customers' allocation of transmission cost has declined by 10%. While GS4, our largest energy usage customer class has increased by 9%. This reflects a growing share of our system that is made up of data centers, along with a shift in how we allocate transmission costs among the classes. We've also adopted other rate mechanisms in recent years that combined with regular and routine assessment of cost allocation and rate design ensure costs are shared equitably across rate classes. We have a long and exciting history of working with data center customers, and we look forward to supporting all of our customers going forward. With that, let me summarize our remarks on slide 19. Our safety performance this quarter was outstanding, but there's more work to do to drive injuries to 0. We reaffirmed our financial guidance. Our offshore wind project is on time and on budget. We continue to make the necessary investments to provide the reliable, affordable and increasingly clean energy that powers our customers every day. And we are 100% focused on execution. We know we must deliver and we will.
With that, we're ready to take your questions.
