…When all the data contradicts its claims?
Over the course of two legislative sessions, Connecticut lawmakers and ratepayers have received requests for financial ‘assistance’ from the Millstone Nuclear Plant. Despite Millstone spending nearly $1 million on lobbying this year alone, Hartford hasn’t been convinced. But as Gov. Dannel Malloy’s executive ordered investigation into the plant’s financial viability kicks off, it seems a moment of truth is coming for Millstone.
The sequence of events is important. Millstone, which by all accounts is profitable and contractually obligated to operate through 2022, says it needs a special deal to stay viable. The company’s representatives spent this year asking for access for to state contracts reserved for renewables — implying that doing so would help ensure the plant doesn’t go under. Denied this opportunity, Millstone has invoked scare tactics, saying that they’ll begin a ‘strategic reassessment’ and making other implied threats about closing.
Such claims are puzzling, especially since all the data demonstrates the plant is profitable and company leadership assured stakeholders that “we are making money there now” (speaking of Millstone). As a result, the governor made the stipulation that Millstone provide financial information before the state decides to give them help or not. The plant initially had until August 29 to comply, and has since requested three additional weeks to prove its side of the story.
The question now is if or how Millstone will follow through. Thus far, they have resisted and even criticized the study, effectively refusing to demonstrate a need. When the executive order was signed, the plant’s owner (Virginia-based Fortune 500 firm Dominion Energy) reiterated that the time for inquiry “has passed,” adding that now was a time for action (that is, forego any questions and give Millstone the money).
Other details are also worth revisiting. One is the term “strategic reassessment.” Some will wonder how likely it is that the plant is only now analyzing its financial outlook. How probable is it that Dominion Energy, a company with $72 billion in assets and over 16,000 employees, isn’t constantly monitoring the market and its portfolio’s profitability? It seems like Dominion and Millstone want to give the impression that they’re wandering aimlessly towards potential disaster, yet any business of their caliber knows exactly what they’re doing and makes meticulous efforts to help their bottom line in any way possible.
One should also notice that Dominion said in a filing in late August that it was surprised to see such a probing request. A company spokesman added that the firm will respond “to reasonable requests in due time.” What are we to make of this? Is the subtext that Dominion feels rushed, and subjected to unfair questions? This seems strange, or at least a suggestion that Dominion is a victim. Yet by most lights they’re merely being asked to prove their plant need hundreds of millions’ worth of additional ratepayer dollars.
The facts, therefore, are crucial. One fact is that even if Dominion is worried about sharing information for ‘competitiveness’ reasons, their disclosures don’t have to be public. There is nothing stopping them from responding to the state’s request confidentially. Any energy company knows this, but by kicking the can down the road, Dominion makes it seem like they’re not inclined to respond regardless. Why is this? If Millstone is actually telling the truth and the facts are on their side, wouldn’t their side be forthright and provide the necessary information? One would assume that a struggling plant would gladly demonstrate its need if it were asking for substantial financial help.
Another fact is that neither Dominion nor Millstone need help staying upright. Millstone is a profitable plant, and is contractually required to operate well into 2022. According to a study by Energyzt, the plant has earned an estimated $3 billion in profits for its owner since 2001, made $150 million in after-tax income last year alone, and is slated to make $400 million in such income over the next five years. A study by MIT furthermore found that Millstone will be the most profitable nuclear plant in the United States through 2019, while a New England States Committee on Electricity report showed that “under every hypothetical scenario,” New England’s nuclear units, including Millstone, will remain profitable through 2030.
Ratepayer impact is also relevant. The bottom line is a special deal for Millstone translates to higher costs for consumers. The Energyzt study clearly states that the plant’s proposal would cost ratepayers an average $330 million per year. That’s in addition to all their previous energy costs, and translates to a 15 percent to 20 percent increase in supply costs (an extra $90 on utility bills annually). This also doesn’t account for the $800 million the plant will receive from ratepayers via capacity payments through 2021.
The fundamental question is this: should Connecticut take Millstone at its word when all the data contradicts its claims? Significant money is at stake, and Connecticut ratepayers are already strapped by high costs. Gov. Malloy made the right decision making sure we, and policy makers ultimately deciding the issue, know the facts.
The ball is now in Millstone’s court, and the stakes are higher than ever. As the company continues to delay this process, we should all remain closely watching.
Matt Fossen is spokesman for the Stop the Millstone Payout coalition.