Millstone Nuclear Power Station in Waterord Dominion Resources
Millstone nuclear power station in Waterford Dominion Energy

Dominion Energy signaled an intention Friday to play hardball with state energy officials by questioning the need to share financial data sought by Connecticut state agencies that are jointly assessing the economic viability of its Millstone nuclear power station, the biggest source of electricity in New England.

In a letter to state energy officials, Dominion did not explicitly reject or accept the request for data made earlier this week, but it pointedly noted Connecticut no longer has a right to detailed cost information since it abandoned setting rates for the generation of electricity in favor of a competitive, largely deregulated market.

“For that reason, we were surprised that some of your initial data requests seemed more in keeping with a rate case in a vertically integrated state, not the voluntary role we are playing in your implementation of the Governor’s executive order,” Dominion said. “No information provided by our company as part of this review should be deemed to submit to regulatory authority that your agencies might have had prior to restructuring.”

The letter from Paul D. Koonce, the senior executive who oversees the Virginia-based energy giant’s electric generation group, did not say precisely what information it intends to provide as part of an assessment initiated by an executive order of Gov. Dannel P. Malloy. Koonce said the plant’s future will be determined by Dominion’s own assessment.

Kevin R. Hennessy, who oversees governmental relations for Millstone, said in a telephone interview the company still was reviewing the data requests and would respond “to the reasonable ones.”

The Department of Energy and Environmental Protection, which is conducting the assessment with the Public Utilities Regulatory Authority, declined to say if it read the letter as a refusal to provide financial data sought to determine the continued economic viability of Millstone, whose two reactors produce the equivalent of half the state’s electric needs.

“We will review the document filed today by Dominion,” said Dennis Schain, a spokesman for DEEP. “If that document –  and any future material submitted by Dominion – does not provide information we have requested, we will have to rely on publicly available information, analysis, and modeling to make the determinations required to complete this study.”

As part of their request, DEEP and PURA made clear they could privately review proprietary data.

Malloy set a deadline for the agencies to complete their assessment by no later than Feb. 1, shortly before the General Assembly convenes for its 2018 session, in an effort to resolve the complex question of whether and how energy procurement rules should be altered to keep nuclear energy viable in the face of competition from power generated by relatively cheap natural gas.

Undisputed is that the loss of Millstone would be a crushing blow to the economy of southeast Connecticut and the state’s ability to meet its goals for reducing the carbon emissions that have produced ever increasing levels of carbon dioxide, a greenhouse gas blamed for rising temperatures.

Dominion and its competitors have been lobbying a part-time state legislature whose members have been overwhelmed at times by the contradictory claims about what tinkering with a complex energy economy would mean for the price of electricity to consumers and the viability of Millstone.

The state still sets rates charged by the two major utilities, Eversource and UI, for the cost of delivering electricity, which remains a regulated monopoly. But the cost of generating electricity is set by a market that is competitive, albeit within parameters set by state law. Price is only one factor.

It’s a complex system intended to produce the cheapest, cleanest and most reliable sources of energy. But to do that, the state manipulates the markets to encourage the development of a diversity of energy sources, including the still-maturing solar and wind industries.

For example, Connecticut has a renewable portfolio standard that requires electric providers to obtain a slowly increasing percentage of power from renewable sources, which includes wind, solar and small-scale hydro projects. The share was 19.5 percent in 2015 and will increase to 27 percent in 2020.

The renewables compete on price with each other, not with electricity produced by large-scale, plants powered by fossil fuels — increasingly, relatively cheap natural gas — or nuclear fission in the case of Millstone. Dominion has lobbied the General Assembly to permit it to sell at least some of its Millstone power in competition with other sources of carbon-free power, such as large-scale hydro imported from Canada.

“It is important to emphasize that we are not in any way asking for a subsidy for Millstone in our work with the General Assembly,” Koonce said in his letter. “We are confident that you would not describe your use of this procurement process for clean energy as a subsidy. We are asking for equitable treatment and a chance to compete to save customers money and help the state meet its climate goals—nothing more.”

Consumer advocates say the change may not be a direct subsidy, but would amount to an indirect one if it yields higher prices for Dominion, hence the calls for Dominion to share its financial data.

At the close of the 2017 session in June, the Senate approved a bill backed by Dominion that would have broadened how it could sell Millstone’s power, so long as state energy officials at PURA deemed it in the public interest. The House never took up the bill.

“If we give you a bid you don’t like, reject it,” Hennessy said.

Hennessy said the state as a matter of public policy weighs myriad factors in nudging the markets, such as ensuring a higher price for the emerging solar and wind  industries; there is nothing wrong with factoring in Millstone’s value in producing 98 percent of the state’s carbon-free electricity, while employing 1,100 workers in Connecticut.

Koonce made a similar pitch in the conclusion of his letter to the heads of DEEP and PURA:

“By taking action to allow nuclear power from Millstone a chance to compete with other clean energy resources, Connecticut has the opportunity to chart a sustainable future for a critical environmental asset while offering the chance for relief to the state’s long-suffering electricity customers. Your two agencies would retain discretion to determine whether to accept any resulting bid on behalf of customers. This action would provide a valuable tool for the state to use in providing relief to customers, meeting its climate goals, and preserving its energy security and economic base.”

The Malloy administration concedes that may be true, but agrees with Dominion’s doubters, who include consumer groups such as AARP and the Connecticut Citizen Action Group, that the prudent path is to complete the assessment that opened Thursday with a public hearing in Hartford.

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Mark PazniokasCapitol Bureau Chief

Mark is the Capitol Bureau Chief and a co-founder of CT Mirror. He is a frequent contributor to WNPR, a former state politics writer for The Hartford Courant and Journal Inquirer, and contributor for The New York Times.

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