Dominion's Wind Court Win: A Tactical Re-rating Setup?

The immediate catalyst is a clear legal win. On Friday, a Norfolk federal judge granted Dominion Energy a preliminary injunction, allowing it to resume construction on its $11 billion Coastal Virginia Offshore Wind project. This follows a stop-work order issued by the Trump administration on December 22, which cited newly uncovered national security risks. The judge ruled the order was too broad and failed to specify how Dominion's project posed a unique threat, a finding that aligns with similar recent rulings for other offshore wind developers in Washington.

The core financial impact of the halt is now quantified. Dominion has stated it is losing an estimated $5 million per day during the stoppage. With the project already having consumed nearly $9 billion in costs, this daily drag represents a tangible and accelerating erosion of capital. The injunction directly addresses that pressure, aiming to halt the bleeding while the legal battle continues.

This victory is not an isolated event. It follows a pattern of judicial pushback this week, with rulings also allowing projects off New York and New England to restart. Together, these decisions signal a potential shift in the legal landscape, challenging the federal government's broad authority to halt projects based on classified national security claims. For Dominion, the win is tactical: it removes an immediate operational and financial overhang, creating a clearer path to completion.

The Numbers: Sunk Costs and Daily Losses

The scale of the project is immense. Dominion has already invested nearly $9 billion in the 2.6-gigawatt Coastal Virginia Offshore Wind (CVOW) project, making it the largest offshore wind project under development in the United States. The project, located about 27 miles off the Virginia coast, was expected to start delivering electricity to the grid within months, with a planned late-2026 completion date.

This timeline is critical. The halt in construction, initiated by a stop-work order on December 22, directly threatened that schedule. For Dominion, the immediate financial implication is a daily loss of $5 million. That figure represents a tangible and accelerating erosion of capital while the project sits idle.

Resuming construction mitigates this daily drag, but it does nothing to erase the significant capital already spent or the project's overall cost. The company's stated cost for the project is $10.7 billion, and that figure is now under pressure from external factors like tariffs, which Dominion says could add another $690 million in costs through 2026. The court victory removes an operational overhang, but the financial math remains challenging. The win is a tactical reset, not a financial clean slate.

This context explains the stock's muted performance. Dominion shares have delivered a 1-year total shareholder return of 15.66%, a steady but unexciting gain that suggests the market has already priced in the regulatory risk. The court injunction is the next catalyst, but its impact will depend on execution. If Dominion can resume construction smoothly and provide clear, positive updates on its path to the late-2026 completion date, it could trigger a re-rating. The current setup is one of a contained overhang being lifted, creating a potential mispricing if the company delivers on its promise.

The next major event is the Q4 2025 earnings call on February 23, 2026. Management will likely discuss the project's status and the financial impact of the halt, offering a direct update on the daily $5 million loss. Any guidance on recovery timelines or cost projections will be critical. For now, the win is a necessary step, but the real test is whether Dominion can translate this legal victory into operational momentum.