Dominion Energy loses legislative fight over Millstone pricing

Dominion Resources

The Millstone nuclear power station.

A long, intense and expensive lobbying campaign by Dominion Energy has failed to find the votes in the Connecticut General Assembly for legislation intended to improve the profitability of its Millstone Nuclear Power Station by changing the rules for procuring electricity.

“It’s dead. It’s a toxic brand now, literally radioactive,” Rep. Lonnie Reed, D-Branford, the co-chair of the Energy and Technology Committee. “Let’s let it go and figure out a new way.”

Dominion said it was seeking changes that would lower electric rates and stabilize profits generated by the state’s only nuclear-power plant, the source of nearly half of Connecticut’s electricity and most of its carbon-free energy. Opponents say the bill would cost ratepayers and produce a windfall for the plant’s owner, Dominion.

In interviews Friday night and Saturday, key legislators told CT Mirror that a Senate bill sought by Dominion over the opposition of environmentalists, consumer groups, other energy producers and the utility Eversource cannot go forward, unless it is reduced to a call for a study.

Senate Majority Leader Bob Duff, D-Norwalk, and Sen. Gary Winfield, D-New Haven, another energy co-chair, said in interviews Friday night that a concept passed unanimously by the Senate a year ago, only to be blocked in the House, no longer has even a simple majority.

Only Sen. Paul Formica, R-East Lyme, an energy co-chair whose district includes Millstone, declined to concede defeat, interrupting a somber conversation with Winfield to say only, “The session’s been a struggle.”

Ctmirror.org

Sen. Paul Formica, Rep. Lonnie Reed and Sen. Paul Doyle confer after the nuclear energy bill passed the Senate last year.

But a small army of Dominion officials and lobbyists, a visible presence at the State Capitol on Friday, had decamped on Saturday, when only the House was in session.

Kevin R. Hennessy, a Dominion government affairs executive, said failure to pass the bill would be a loss for Connecticut.

“The status quo, which our opponents champion, is not working for Connecticut,” he said. “It would be surprising and a missed opportunity for Connecticut not to reduce the highest electric rates in the continental United States, meet its long-term carbon goals and ensure the sustainability of a major employer this year given the events of this week.”

In the year since the Senate passed the original bill, Dominion’s opponents have mounted a lobbying and advertising campaign that matched or even exceeded the effort by Dominion.

“That full-on bill is not going to happen. Anything more than a study is not going to happen,” Reed said. “Dominion doesn’t want a watered-down bill. They want to play hardball in the post-session atmosphere.”

Low natural gas prices have driven down the daily auctions that set the wholesale price of electricity. Under the legislation, Dominion would have been able to use long-term contracts to lock in prices for up to half its Millstone output as a hedge against daily market volatility.

Dominion had been insulating itself from the highs and lows of the spot market by selling energy through a series of futures contracts that run for three years. But the daily market is so volatile that the futures market has faltered.

The bill would have allowed power from Millstone to compete in the market with biomass and trash-to-energy plants if the Department of Energy and Environmental Protection decided it was in the best interest of consumers.

Dominion has neither threatened nor reassured Connecticut on the status of Millstone in an era when electricity generated by cheap natural gas has depressed the electric markets, accelerating the closure of nuclear plants that still have years of service left on their operating licenses.

AARP, a grass-roots advocacy group for retirees that has grown into a broader consumer lobby, opposed the legislation unless Dominion agreed to open its books and demonstrate that Millstone was on the verge of unprofitability. Without providing details on Millstone’s finances, Dominion instead pointed to nuclear plants in Vermont, New York, Massachusetts and elsewhere that have closed or are slated to close.

Analysts that track the power industry did not help Dominion’s cause, noting that the company’s public filings and other information showed it would be profitable for at least the near future. UBS, for example, told investors earlier this year: “We continue to note that Millstone appears poised to drive positive cash flow through the forecast period. This would appear to reduce the merit of a legislative deal in CT.”