UPDATE: Dominion Virginia Power won the right to develop wind energy off the Virginia coast in a federal lease auction today with a bid of more than $1.6 million.

Dominion Virginia Power's apparent win beat out Charlottesville-based Apex Clean Energy, according to the federal Bureau of Ocean Energy Management.

The federal government's auction of the Atlantic Ocean wind-energy area off the Virginia coast reached the fifth round of the competitive lease sale, the agency said.

The auction is for almost 112,800 acres located about 27 miles from the Virginia Beach coastline.

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Only two companies are bidding this morning in a federal lease auction of a large wind-energy area in the Atlantic Ocean off the Virginia coastline.

Dominion Virginia Power is one of the companies competing in the auction for almost 112,800 acres located about 27 miles from the Virginia Beach coastline.

The federal Bureau of Ocean Energy Management did not release the name of the other bidder. Six companies were eligible to participate in the auction.

Both bidders put in the minimum entry bid of $225,598, a spokeswoman for the federal agency said this morning.

"We're excited," Mary Doswell, Dominion Resources Inc.'s senior vice president for alternative energy solutions, said before the auction. "It's been a long time coming, and we're glad to be at this point where we're actually proceeding with the auction."

When fully developed, this area could generate enough energy to power more than 700,000 homes, according to the federal Bureau of Ocean Energy Management.

The Sierra Club expressed support for development of offshore wind "as a means of reducing the carbon pollution from fossil fuel power plants that contribute to climate change," the group said in a statement today.

"Offshore wind along the entire Atlantic Coast could eventually meet all our electricity needs," said Glen Besa, director of the Sierra Club in Virginia. "With this investment in clean energy would come thousands of jobs in the manufacture of components for these massive turbines and in the marine construction industry."

However, Doswell said, "we have to look at bringing the cost down" for electricity production from offshore wind.

Bidding began at 10:30 a.m. and will go on until a single active bidder remains. Bidding will continue in 10-minute rounds until about 5 p.m. Bidding may go into a second day.

The minimum opening bid was $2 an acre.

The federal agency intends to increase the bid amount by an incremental range of 20 percent to 50 percent of the latest bid in the early rounds, and 5 percent to 20 percent in the later rounds.

Also eligible to bid in the offshore lease sale are Charlottesville-based Apex Clean Energy; Energy Management Inc. of Boston; EDF Renewable Development Inc. of San Diego; Fishermen's Energy LLC of Cape May, N.J.; Iberdrola Renewables Inc. of Portland, Ore.; Sea Breeze Energy LLC of Philadelphia; and Orisol Energy U.S. Inc. of Ann Arbor, Mich.

Today's commercial lease auction is the second competitive lease sale for renewable energy on the U.S. outer continental shelf.

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