Dominion Resources needs no special deal at consumers’ expense
Connecticut legislators are currently considering legislation, Senate Bill 106, that would allow Virginia-based Dominion Resources, the company that owns the Millstone Nuclear Power Station, to bid for long-term energy contracts alongside renewable energy generators. In effect, this legislation will provide a multi-million dollar special deal to Dominion paid for by Connecticut residents.
Dominion claims that Millstone is less profitable due to lower energy prices. However, Dominion refuses to provide financial documents supporting its claims of financial duress. Instead, it seeks a special deal so that they can enter into valuable long-term contracts to sell power to Eversource Energy and United Illuminating – contracts limited to only certain resources.
The utilities would then be required to charge all customers for the costs of these contracts – even those that procure their own supply. Accordingly, in effect, Connecticut ratepayers would be charged to boost Dominion’s profit margin. Significantly, under the legislation, ratepayers would fund these additional profits without Dominion being required to disclose any financial verification to any regulator including the Public Utilities Regulatory Authority.
Dominion claims that these special contracts would allow them to “cut out the middlemen.” Dominion’s claims cannot withstand scrutiny. Dominion – and every other generator in the region – already has the ability today to sell directly to Eversource and United Illuminating. Multiple times each year, Eversource and United Illuminating issue RFPs for contracts up to a year in duration to meet the energy services of customers who receive service under the utilities standard service offer. To ensure that utility ratepayers are not paying more than they should, these contracts are awarded to the generation companies with the lowest-price bids. This competitive bidding process is overseen by the Public Utility Regulatory Authority.
Dominion Resources has not only participated in the bidding process – they have been awarded contracts at times when their prices were competitive. However, Dominion isn’t always the winning bidder. Because of this, they are seeking legislation like SB 106 to tilt the playing field in its favor. Notably, the legislation is carefully worded to exclude Seabrook Station, the region’s only other nuclear generating plant.
The market rules that Dominion and other power generators operate under in Connecticut and throughout New England are the same rules that they sought and financially benefited from when the state deregulated electricity nearly 20 years ago.
Now that energy rates are improving for ratepayers, Dominion seeks new rules. Supporters of the legislation argue that this special treatment is warranted to help Connecticut achieve its clean energy goals, keep the company in business, and preserve jobs. However, the potential increased rates could adversely impact the State’s other businesses and residents. Quite simply, there has been no demonstration that this special treatment is needed.
The Millstone plant has cleared the three-year capacity auction, generating millions of dollars in payments to Dominion. The plant cannot close during this three-year period without severe penalties. Beyond that, in order to close Millstone, Dominion would need approval from ISO New England and Federal Energy Regulatory Commission. If Millstone is in fact struggling financially, there is a process available to them through ISO New England to receive assistance through reliability must run contracts upon the provision of financial evidence. Importantly, under the ISO New England process, as a regional energy generator, any assistance provided to Millstone would be shared across New England – not just Connecticut. This process has proven effective in other areas of the country.
A recent AARP survey showed that 87 percent of voters over the age of 45 feel Dominion should provide their customers and state legislators with financial reports that show a loss in profit before any subsidies are approved. Additionally, 78 percent feel funding for any approved subsidy should be spread across all of the New England states Millstone serves and not just Connecticut.
Any subsidy or long-term contract should require Millstone to disclose any claimed financial losses to the public. We urge legislators to require this disclosure by Millstone before passing any legislation that provides Dominion with a special benefit. With among the highest electricity rates in the country, Connecticut cannot afford to adopt a special deal or subsidy that will further increase the rates, without a full vetting of impact on the State’s residents and businesses.
James S. King represents the Connecticut Industrial Energy Consumers, a coalition of large commercial and industrial end-users which collectively employ thousands of Connecticut workers at numerous locations throughout the state.
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