Avangrid Announces Close of Sale for Kitty Hawk North Offshore Lease Area to Dominion Energy

Rhea-AI Summary

Avangrid (NYSE: AGR) has completed the sale of its Kitty Hawk North offshore wind lease area to Dominion Energy for approximately $160 million. The transaction includes a 40,000-acre lease area capable of supporting 800 MW of offshore wind generation. The sale price comprises a $117 million lease acquisition payment plus development cost reimbursement.

Avangrid retains ownership of Kitty Hawk South, which has potential for 2.4 Gigawatts of power generation. The company maintains a 9 Gigawatt renewable portfolio across 25 states, including the recently selected 791 MW New England Wind 1 project in Massachusetts.

Positive

• Sale of Kitty Hawk North generates $160 million in proceeds
• Retains Kitty Hawk South with 2.4 GW potential
• 791 MW New England Wind 1 project selected by Massachusetts
• Strong renewable portfolio of 9 GW across 25 states

Negative

• Reduction in total offshore wind development capacity through asset sale

Insights

Financial Analyst

The $160 million sale of Kitty Hawk North to Dominion Energy represents a strategic divestment that strengthens Avangrid's balance sheet and refocuses their offshore wind portfolio. The transaction price, at approximately $3,000 per acre, sets a notable market benchmark for offshore wind lease valuations. The company retains Kitty Hawk South with its substantial 2.4 GW potential, while securing capital that can be reinvested in their extensive renewable energy pipeline, including the recently awarded 791 MW New England Wind 1 project.

The deal demonstrates Avangrid's ability to monetize non-core assets while maintaining strategic positioning in the growing offshore wind sector. With a 9 GW renewable portfolio and continued development of high-potential projects, this transaction aligns with their capital allocation strategy and strengthens their competitive position in the renewable energy market.

40,000 acre lease area could support 800 MW of offshore wind generation energy; Transaction value of approximately $160 million

BOSTON--(BUSINESS WIRE)-- Avangrid, Inc. (NYSE: AGR), a leading sustainable energy company and member of the Iberdrola Group, today announced that it has closed the sale of the Kitty Hawk North offshore wind lease area to Dominion Energy. The agreement, which includes the Kitty Hawk North offshore wind lease area and associated assets, is for a sale of approximately $160 million, inclusive of a payment of about $3,000 per acre for the nearly 40,000-acre lease. The sale price consists of a lease acquisition payment of $117 million and associated development cost reimbursement to Avangrid.

“Closing this transaction is a tremendous development for our key business objectives and strategic priorities, positioning us to pursue new opportunities for investment across our renewables portfolio,” said Avangrid CEO Pedro Azagra. “As we close this sale, focus on delivering on our capital investment plan, and continue the development of Kitty Hawk South, Avangrid is proud of its work to accelerate the clean energy transition in the United States.”

Avangrid retains the ownership and associated rights to the Kitty Hawk South lease, and will continue the development of the area, which has the potential to deliver up to 2.4 Gigawatts of power to North Carolina, Virginia, or other states or private companies.

As one of the largest renewable energy developers in the nation, Avangrid has a 9 Gigawatt portfolio of more than 75 wind and solar facilities in 25 states, generating enough energy to power over 2.8 million homes across the country.

In September 2024, Avangrid’s 791 Megawatts (MW) New England Wind 1 project was selected by the Commonwealth of Massachusetts in the multi-state regional offshore wind solicitation. New England Wind 1 is an offshore wind development located in federal lease area OCS-A-0534, roughly 30 miles south of Barnstable, Massachusetts and making landfall under the Craigville Beach parking lot in Barnstable. The project will border VW1, Avangrid’s first large-scale offshore wind project currently under construction 15 miles south of Martha’s Vineyard.

About Avangrid: Avangrid, Inc. (NYSE: AGR) aspires to be the leading sustainable energy company in the United States. Headquartered in Orange, CT with approximately $45 billion in assets and operations in 24 U.S. states, Avangrid has two primary lines of business: networks and renewables. Through its networks business, Avangrid owns and operates eight electric and natural gas utilities, serving more than 3.3 million customers in New York and New England. Through its renewables business, Avangrid owns and operates a portfolio of renewable energy generation facilities across the United States. Avangrid employs approximately 8,000 people and has been recognized by JUST Capital as one of the JUST 100 companies – a ranking of America’s best corporate citizens – in 2024 for the fourth consecutive year. In 2024, Avangrid ranked first among utilities and 12 overall. The company supports the U.N.’s Sustainable Development Goals and was named among the World’s Most Ethical Companies in 2024 for the sixth consecutive year by the Ethisphere Institute. Avangrid is a member of the group of companies controlled by Iberdrola, S.A. For more information, visit www.avangrid.com.

Forward-Looking Statements

Certain statements in this report may relate to our future business and financial performance and future events or developments involving us and our subsidiaries that are not purely historical and may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of forward-looking terms such as “may,” “will,” “should,” “would,” “could,” “can,” “expect(s),” “believe(s),” “anticipate(s),” “intend(s),” “plan(s),” “estimate(s),” “project(s),” “assume(s),” “guide(s),” “target(s),” “forecast(s),” “are (is) confident that” and “seek(s)” or the negative of such terms or other variations on such terms or comparable terminology. These forward-looking statements generally include statements regarding the potential transaction Avangrid and Dominion Energy, including any statements regarding the expected timetable for completing the potential transaction, the ability to complete the potential transaction, the expected benefits of the potential transaction, the continued development of Kitty Hawk South and its estimated future capacity, Avangrid’s total generation capacity, the operating status and future capacity of Vineyard Wind 1, the development of the New England Wind lease area, and any other statements regarding Avangrid’s future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows, or future events or performance. Readers are cautioned that all forward-looking statements are based upon current reasonable beliefs, expectations and assumptions and may influenced by many factors, which are often beyond Avangrid’s control, that can cause actual results to differ from those expressed or implied by the forward-looking statements. For a discussion of risk factors and other important factors affecting forward-looking statements, please see Avangrid’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filings and the information filed on Avangrid’s Forms 8-K with the SEC as well as its subsequent SEC filings, and the risks and uncertainties related to the proposed transaction, including, but not limited to: the expected timing and likelihood of completion of the proposed transaction, including the timing, receipt and terms and conditions of any regulatory approvals of the proposed transaction or other third-party consents or approvals, the ability of Avangrid and Dominion Energy to satisfy other conditions to closing, timely performance by third parties under existing or future contracts, or the occurrence of severe weather events. Other unpredictable or unknown factors not discussed in this communication could also have material adverse effects on forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may vary in material respects from those expressed or implied by these forward-looking statements. You should not place undue reliance on these forward-looking statements. Avangrid does not undertake any obligation to update or revise any forward-looking statements to reflect events or circumstances after the date of this report, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Other risk factors are detailed from time to time in Avangrid’s reports filed with the SEC and we encourage you to consult such disclosures.

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Media Contact:

Kimberly Harriman

(203) 203-4481

Kimberly.Harriman@avangrid.com

Source: AVANGRID, Inc.

FAQ

How much did Dominion Energy pay for Avangrid's (AGR) Kitty Hawk North lease area?

Dominion Energy paid approximately $160 million for the Kitty Hawk North lease area, including a $117 million lease acquisition payment and development cost reimbursement.

What is the power generation capacity of Avangrid's (AGR) Kitty Hawk North lease area?

The Kitty Hawk North lease area has the potential to support 800 MW of offshore wind generation energy.

How many acres does the Kitty Hawk North wind lease area cover?

The Kitty Hawk North wind lease area covers approximately 40,000 acres.

What is the potential power generation capacity of Avangrid's (AGR) Kitty Hawk South project?

Avangrid's Kitty Hawk South project has the potential to deliver up to 2.4 Gigawatts of power.