Connecticut has the highest retail electricity prices in the nation, but a proposed law working its way through the legislature this session will help change that.
Among other things, the bill would allow Dominion Resources, the owners of the Millstone nuclear power station in Waterford, to sell its carbon-free power directly to customers through their utility company. Under the existing system, power from Millstone is sold first into regional wholesale energy markets before it makes its way to your home. The proposed law, which has wide bipartisan support in the legislature, eliminates the middleman and will lower prices by getting power directly to you the end user.
The legislature has thoughtfully crafted this legislation to protect consumers. Before being allowed to sell its power directly to Connecticut consumers, Dominion would first have to bid for the right to do so through an auction process. Other suppliers will also be allowed to bid and before any bid is accepted it must meet the approval of the Department of Energy and Environmental Protection, the Office of the Attorney General and the Office of the Consumer Counsel. These regulators can only accept a bid if they decide it is in the best interest of Connecticut ratepayers. A winning bid would then have to be reviewed further and accepted by the Public Utilities Regulatory Authority. Consumer interests are protected every step of the way.
Under this legislation Connecticut electricity prices would be reduced and the reason is simple. The auction process would give Dominion and all other bidders a strong incentive to offer the lowest prices possible. If Dominion comes in with the lowest bid and it is accepted, consumer prices will go down. If other suppliers out bid Dominion by offering lower prices, the result again will be lower prices for consumers.
Under this system, it is impossible to imagine a scenario in which consumer prices would go up. Either a winning bid will be selected and retail prices will decrease or no bids will be selected and things remain where they are now – Connecticut customers continuing to pay the highest retail electricity prices in the continental U.S.
That is why so many state lawmakers support this bill. It is an opportunity to lower prices by purchasing power smarter. If Millstone is a winning bidder, Connecticut will get the ancillary benefits of retaining high paying jobs and around-the-clock carbon-free power.
In other states, lawmakers eager to retain nuclear power facilities have invested taxpayer funds or forced ratepayers to otherwise subsidize continued operations. Under the law proposed here in Connecticut there would be no taxpayer or ratepayer subsidy. The proposed system simply sets up an auction system, in which Dominion and other suppliers have a right to bid for long term supply contracts. It is a fair system that will benefit consumers.
Gov. Dannel Malloy, when he came to office, promised to pursue an energy policy that would result in cheaper, cleaner and more reliable electricity for Connecticut. This legislation accomplishes all three goals by lowering prices for homeowners and businesses, by taking advantage of a carbon-free power source as the state moves toward cleaner sources of energy, and by making the best use of Millstone as an important asset that operates around-the-clock, regardless of the weather.
Kevin Hennessy represents Dominion Resources, owners of the Millstone power plant in Waterford.