Robert M. Blue
President, Chief Executive Officer and Chairman of the Board at Dominion Energy
Thanks, 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 three months of the year was 0.32, a significant improvement relative to already strong historical performance. I commend my colleagues for their consistent focus on employee safety, which is our first core value. On March 1, we announced the results of our comprehensive business review. We thank all those who were able to participate and provide feedback following the event. Please note that those meeting materials and including the webcast replay, continue to be available on our website, and we encourage all to review thoroughly. Throughout the review, I met extensively and directly with many of our shareholders to better understand their perspectives on our company's fundamental opportunities and challenges as well as changes they wanted to see affected as a result of the review. Since the conclusion of the review, I've continued that deliberate campaign of investor engagement, and I'd like to share what I believe represents by and large, the consensus among those shareholders. First, we delivered a truly comprehensive result. This was not a partway review. Instead, we fully addressed head on, the challenges that our company has faced in the past. Second, recognition that we've taken significant steps to enhance transparency, and that we have developed a financial plan that is more durable and more appropriately conservative than in the past. Third, acknowledgment of material changes to my compensation structure, full details of which are now available in our proxy statement, into our governance more generally, that demonstrate a strong commitment to shareholder alignment.
And finally, and perhaps most importantly, a clear expectation that the company must be 100% committed to executing and delivering on the operational and financial guidance we have provided. On that last point, we are unwavering. Let me repeat what I have said before. I am accountable for and my entire leadership team has embraced our commitment to execute and deliver. I am very excited for the next chapter of our company. With that, let me provide a few updates on the execution of our plan. Turning to offshore wind, I'd like to start with a few remarks related to inaccurate news releases circulating yesterday regarding the status of our project. There has been no delay ordered. Our construction schedule has not been altered. We expect to begin monopile installation between May six and May 8. On April 29, a motion was filed in the U.S. District Court for the D.C. circuit, requesting a preliminary injunction in connection with a complaint filed related to the administrative process for certain permits and approvals received. The judge has not ruled on the preliminary injunction motion and in fact, has issued no orders other than the following schedule. We'll file a status report tomorrow regarding the various mitigation plans being finalized with BOEM and other agencies prior to beginning monopile installation and provide the estimated date for such installation work to begin. We and the government will file our brief in response to plaintiff's motion on Monday. Plaintiff's have until May nine to file any reply. The biological opinion was thorough and complied with all legal requirements, which is true of all other permitting actions for this project. Similar arguments to those made by the plaintiff's in this case, have been rejected by courts when raised with respect to other projects.
Most recently by the U.S. Court of Appeals for the first circuit just last week and the challenge brought against the permit for Vineyard Wind. We believe this lawsuit has no merit and we expect the court to deny the plaintiff's request for a preliminary injunction. Let me just reiterate. The project is proceeding on time and on budget, consistent with the timelines and estimates previously provided. As shown on slide eight, last month, the project received its 11th and final federal permit. Our materials and equipment were on track and making excellent progress. We've received 36 monopiles from our supplier, EEW at the Portsmouth Marine Terminal representing 20% of the total. We expect deliveries to continue steadily in coming weeks. These monopiles will begin to be installed next week. DEME will use their heavy lift crane vessel, Orion, which is currently at the Portsmouth Marine Terminal in Virginia. Recall that we've scheduled monopile installation across two seasons, 2024 and 2025, which allows us to better mitigate any potential delays or disruptions without impacting final schedule. The first of three offshore substation topside structures have been completed and delivered to CSWind/SEMco to be outfitted. The first six transition pieces have been loaded and are on their way to Virginia and expected to arrive in late May. All 161 miles of onshore underground cable has been manufactured, and over 1/3 of the 600 miles of offshore cable has been produced. Scheduled for the manufacturing of our turbines remains on track.
It's worth noting that even though we won't begin turbine installation until 2025 per our schedule, DEME recently finished supporting an 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. The lessons learned from that project will benefit our project installation in the future. Moving onshore. Construction activities remain on track, including civil work, horizontal directional drills and the boards where the export cables come ashore. On regulatory, last November, we made our 2023 rider filing, representing $486 million of annual revenue. The hearing is scheduled for later this month, and we expect the final order by August. Turning to slide nine. As reflected in our standard status report filed with the SEC yesterday, we've updated the project's expected LCOE to be $73 per megawatt hour, down modestly relative to our last update. The drivers for the lower LCOE include about $1.5 related to an updated REC price forecast which produces a larger project benefit for customers as well as other factors. There have been no changes to the capital cost, capacity factor or interest rates. We've again provided sensitivities to show how the average lifetime cost to our customers is affected by these key assumptions. We remain well below the legislative prudency cap on this metric, and I would point out well below the PPA prices being considered in other parts of the country.
Project to date, we've invested approximately $3.5 billion and remain on target to spend approximately $6 billion by year-end 2024. 93% of project costs are now fixed. We'll gradually increase that percentage over the remainder of the project construction timeline. I'm very pleased that per the filing, current unused contingency of $284 million is equal to the original contingency filed in November 2021, despite being some 30 months further along with the project. Slightly lower contingency relative to our prior update is not unexpected, and changes of this kind are considered normal as we move further towards project completion. 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 we've 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 28% complete and we've highlighted remaining project major milestones on slide 10. Let me now provide a few updates on Charybdis, as shown on slide 11. The vessel is currently 85% complete, up from 82% as of our last update. Last month, we announced that Charybdis was successfully launched from land to water, marking a major milestone in the vessel's construction. To achieve this milestone, welding of the ship's haul and commissioning of vessels four legs and related jacking system were successfully completed. I encourage you to access the short video of this successful launch included in today's materials. There's no change to the expected delivery timeframe of late 2024 or early 2025, which will be marked by the successful completion of sea trials.
There's also no change to the vessel's expected availability to support the current CVOW construction schedule. In April, we agreed to terminate a charter agreement under which Charybdis would have serviced a third party until returning to CVOW in the second half of 2025 to begin turbine installation. As a result of the mutually agreed termination, CVOW currently has sold an exclusive access to the vessel in 2025, and we're exploring options to further derisk the project's timeline by potentially accelerating its deployment to CVOW. The termination does not have a meaningful impact on our financial plan, earnings, cash or credit, and there's no change to our financial guidance as a result. Finally, there is no change to the project's current estimated cost of $625 million. 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 and use of the vessel after the CVOW project is complete. Turning to slide 13, let me address affordability as well as provide a few regulatory updates. At DEV, current rates are approximately 14% below the national average. Yesterday, we made several filings related to fuel and transmission riders that would result in a net bill reduction for a typical residential customer of roughly 3%. At DESC, our recently approved fuel cost settlement related filings reduced customer bills by over $13 a month. Current residential rates are now approximately 18% below the national average. And in March, we initiated an electric general rate case representing the first filing in the past four years, during which time, we've invested $1.6 billion in our system to the benefit of our customers.
We expect new rates based on a typical procedural schedule to be effective in September. Being very focused on affordability allows us to ensure customers are getting compelling value, coupled with high reliability. Turning to slide 14 and the growth outlook in Virginia. Let me share a few thoughts on, first, our customers' needs; second, what's being done to support them; and third, the impact to our long-term financial plan. First, customers' needs. 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. DEV's weather-normal year-over-year sales growth rate through March was 4.8%, precisely in line with our full year 2024 growth rate expectation of 4.5% to 5.5%, driven by economic growth, electrification and accelerating data center expansion. The data center industry has grown substantially in Northern Virginia in recent years. In aggregate, we've connected 94 data centers with over four gigawatts of capacity over the last approximately five years. We expect to connect an additional 15 data centers in 2024. Northern Virginia leads the world in data center markets. In recent years, this growth has accelerated in orders of magnitude, driven by one, number of data centers requesting to be connected to our system; two, the size of each facility; and 3, the acceleration of each facility's ramp schedule to reach full capacity.
For some context, historically, a single data center typically had a demand of 30 megawatts or greater. However, we're now receiving individual requests for demand of 60 to 90 megawatts or greater and it hasn't stopped there. We get regular requests to support larger data center campuses that include multiple buildings and require total capacity ranging from 300 megawatts to as many as several gigawatts. Last month, PJM released its capacity auction planning parameters. The results align with our analysis of load growth and the need for requisite dispatchable supply resources included in our 2023 IRP. This independent modeling also validates the need to expediently progress the recurring local and PJM regional transmission planning and expansion process and our decision to expedite numerous projects over the last two years. Second, what are we doing today? We will take the steps necessary to ensure our system remains resilient and reliable. We had already accelerated plans for new 500 kV transmission lines and other infrastructure in Northern Virginia, and that remains on track. We've been awarded over 150 electric transmission projects totaling $2.5 billion during the PJM open window last December. We're working expeditiously with PJM, the SCC, local officials and other stakeholders to fast track these along with several other 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. Finally, what's the impact to our financial plan. Our capital plan is driven by demand, reliability and customer needs. 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. We believe there may be opportunities for incremental regulated capital investment toward 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. Our IRPs take a longer-term view.
The 2023 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 growth in customer bill below 3%. The most recent PJM load projections, along with our work to optimize the best ways to meet this load will be factored into our planning for this year's IRP. The 2024 IRP will be submitted to the SEC and NCUC in October 2024. We will continue to provide updates as things develop. We remain focused on our core responsibility of safely providing reliable energy to our customers. With that, let me summarize our remarks on slide 15. Our safety performance this quarter was outstanding, but there's more work to do to drive injuries to 0. We affirmed all 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.
