Senate gives new life to Millstone relief bill
Dominion Energy and its allies in the Senate Republican caucus managed Wednesday to salvage elements of a bill intended to stabilize the profitability of Millstone Power Station, a nuclear plant that produces nearly all of Connecticut’s carbon-free electricity.
On Saturday, the bill was pronounced moribund by Senate Democratic leaders and called “a toxic brand now, literally radioactive” by Rep. Lonnie Reed, D-Branford, the House co-chair of the Energy and Technology Committee.
But a thinly veiled threat by Dominion that Millstone’s viability might be at risk, combined with a push by Senate Republicans, won a second chance for revisions that still face difficult prospects in the House on the final day of the 2017 session, as well as skepticism by Gov. Dannel P. Malloy.
The bill approved on a 23-9 vote early Wednesday authorizes the Department of Energy and Environmental Protection to conduct “an appraisal regarding nuclear power generating facilities” and “determine whether a competitive procurement process for nuclear power generating facilities shall be conducted.”
The General Assembly could stop the department from changing the procurement process by a majority vote by March 1, 2018.
Approval came after an extraordinarily negative debate in which senators complained of being bullied by Dominion into voting for a bill whose impact on energy procurement was difficult to decipher.
“I don’t like being bullied and that’s what’s happening,” said Sen. Gary Winfield, D-New Haven, co-chair of the Energy and Technology Committee. “If we don’t do this, there’s an implied threat.”
“I’m not really thrilled with the process through which this has come to us today,” said Senate Majority Leader Bob Duff, D-Norwalk. “This has to do with the folks outside of this chamber who have worked on this legislation, who have brought this to us” with a “take-it-or-leave-it” message.
Sen. Edwin Gomes, D-Bridgeport, said he would support the measure reluctantly. He said lawmakers had been pressed to vote for a bill that few could understand and many might come to regret it.
He read sections of the bill aloud.
“If that don’t sound like a load of crap, I don’t know what the hell it is,” Gomes said. “We’re going to get screwed either way.”
Senate GOP leader Len Fasano of North Haven backed Sen. Paul Formica, R-East Lyme, an energy co-chair whose district includes Millstone and who was intent on reviving elements of a measure Dominion sought to help Millstone become more competitive at a time of relatively cheap natural gas.
“This is as much a jobs bill as an energy stability bill,” Formica told his colleagues.
The low natural gas prices have driven down the daily auctions that set the wholesale price of electricity. Under the original 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.
In an interview Tuesday, Fasano said the revisions satisfy Dominion, while also giving the legislature continued oversight next year.
“If you don’t do this, you run the risk of losing Millstone,” Fasano said. “And those guys who say Millstone’s not going to leave are the same ill-informed people who said GE is not going to leave, who said Aetna’s not going to leave, who said the hedge fund’s not going to leave, who said millionaires are not going to leave. They’re 0 for 4.”
Whatever happens on the last day of the session, Dominion will continue with plans to refuel both reactors at Millstone this year, said Daniel A. Weekley, vice president of corporate affairs at Dominion. He said the company was clear to lawmakers about its needs.
“We’ve been very consistent. Millstone is challenged,” Weekley said. “The Connecticut ratepayers are being punished and penalized by the current process that keeps rates as high as possible. Our only feedback to the legislature has been any action needs to take place in 2017. Any study that requires further action in 2018 from the legislature is not something that Dominion can support.”
He disputed claims that Dominion could not close Millstone because of its long-term commitments to provide power to the New England grid.
“I don’t think we’ve ever indicated when we would start the process of retiring Millstone,” Weekley said. “But I think people have assumed we ve got to operate for years and years to come. That is inaccurate. We could retire Millstone at any time that we chose to.”
It could be costly, however, as the company would have to pay a penalty and buy replacement power.
House Majority Leader Matt Ritter, D-Hartford, and House Minority Leader Themis Klarides, R-Derby, both said Dominion should share financial data that makes the case that it needs a new way to sell its power.
“I would like them to open their books and show us what their books look like. Wouldn’t that be the fairest way to figure out if they really needed our help?” Klarides said. “If they need our help, I want to help them.”
“I think there are a whole lot of people who want more transparency,” Malloy said.
As a regulated utility in Virginia, Dominion presents detailed financial information in that state, and regulators set rates that provide the company a rate of return. Connecticut deregulated electricity in 1998, opting to treat electricity as a commodity bought at auction.
Fasano said the General Assembly is too political to decide on new procurement rules for Dominion and Millstone. John Erlingheuser of the AARP, which has been fighting the Millstone bill, disagreed.
“It belongs in the Connecticut General Assembly, because it was the Connecticut General Assembly that deregulated generation in the first place,” Erlingheuser said. “They’re asking for a special status, a speciall deal that goes outside what the deregulated market is.”
Sens. John Fonfara, John Kissel, George Logan and Kevin Witkos recused themselves.
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