Deal struck on stabilizing profits of Millstone nuclear station
The Connecticut General Assembly and the administration of Gov. Dannel P. Malloy have agreed in principle on bipartisan legislation authorizing state energy officials to take measures to stabilize the profitability of New England’s largest power plant, the Millstone nuclear station in Waterford.
Passage of the measure would resolve what has been one of the most heavily lobbied issues at the State Capitol over two years and underscore the reluctance of lawmakers to risk the political fallout that would come in the swing districts of southeastern Connecticut next year if Dominion Energy acted on threats to close the plant.
Aside from generating enough carbon-free power to meet half of the state’s energy needs and keep it on track to lower greenhouse gases, Millstone is an economic powerhouse with a workforce of well-paid technical staff in a corner of the state with a soft economy and an electorate that often feels neglected by Hartford.
“It’s very important that we stand up for the folks who work there every day,” Senate Majority Leader Bob Duff, D-Norwalk, told CT Mirror. “They’re good jobs. They’ve been there for a long time. And I think we respect the people who work there, and we want to make sure we are fighting for them as well as all of eastern Connecticut.”
The Senate was expected to vote Friday on the Millstone bill,
Sen. Paul Formica, R-East Lyme, whose district includes Waterford and has strongly advocated helping Millstone as co-chair of the Energy and Technology Committee, said he was awaiting final legislative language, but was encouraged by the bipartisan consensus.
“I’m waiting for the language,” Formica said. “It seems to be my understanding that everybody’s clear on where we’re going, and the plant gets saved. That’s the most important issue.”
The measure is similar to a bill passed by the Senate at the end of the regular 2017 session, only to die from inaction in the House.
It would allow — not require — the Department of Energy and Environmental Protection and the Public Utilities Regulatory Authority to change energy procurement rules, if deemed in the best interest of the state and ratepayers.
It does not include the imposition of any fees on Dominion, a possibility considered as the legislature has struggled to pass a balanced budget. But Malloy said unequivocally this week he would oppose any such fees as a hidden tax on electric ratepayers.
“I am not in favor of plugging money in, because quite frankly it’s ratepayer money,” Malloy said. “If you’re going to raise somebody’s taxes, be honest about it — you’re raising their taxes.”
On the orders of Malloy, DEEP and PURA already are performing an assessment of the financial stability of Millstone and the nuclear energy market. Profits have been squeezed by competition with power plants fueled by relatively cheap natural gas.
It is unclear if Dominion, a publicly traded company that already discloses significant financial information, would provide additional data sought by PURA and DEEP to make the case that it needs new rules for selling the electricity generated at Millstone.
Malloy said state officials must be satisfied that Millstone needs help.
“If Dominion doesn’t share that information, then we shouldn’t go down that road,” Malloy said earlier this week. “If the information doesn’t verify the assertions that are being made by Dominion, then we shouldn’t go down that road.”
Millstone’s competitors and some consumer groups have disputed that the station is in financial jeopardy.
Undisputed is that the nation’s aging nuclear industry has been hard-hit by the sudden glut of natural gas produced by fracking. An MIT study concluded that two-thirds of the U.S. nuclear power capacity will become unprofitable in the coming years, but that Millstone was the most profitable plant in the U.S.
At issue is how much longer Millstone will remain profitable. Dominion disputes portions of the MIT study, as well as an assessment prepared in April for the Electric Power Supply Association that concluded the plant is profitable and will remain so for five years.
Electricity is sold as a commodity in Connecticut, which largely deregulated the electric industry. The two major private utilities in the state no longer generate power; they only transmit it to consumers.
Dominion officials declined comment Thursday night, other than saying they were encouraged by reports of a bipartisan consensus.
John Erlingheuser of AARP said the deal was “terrible.” He said decisions to change energy procurement in the deregulated market should rest with the legislature, not DEEP or PURA.
He said he appreciated that Malloy’s directive to the state agencies is that the financial case must be made in order for any market changes, but Malloy is not seeking re-election next year.
“We don’t know who the governor is going to be in another year,” he said. “There are so many wild cards to me.”
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