Make no mistake, Dominion’s electric rate plan would boost rates
Dominion Resources, Inc. is trying to convince us that Connecticut ratepayers will somehow save money by paying higher prices for the power Millstone provides to the electrical grid.
In his March 7 letter, Kevin R. Hennessy, State Policy Director – New England for Dominion Resources, Inc., the private company based in Virginia that owns the Millstone Nuclear plant, takes various steps to hide an obvious fact: Dominion is seeking higher selling prices for the power they produce, higher prices that will ultimately come out of ratepayer pockets.
This fact, that Dominion seeks to boost shareholder profits by raising electric rates for all Connecticut ratepayers, is why major consumer organizations, ConnPIRG, AARP and CCAG, oppose this scheme.
Connecticut restructured its electricity industry in the late 1990’s, moving from state regulation of power generation to participation in a regional competitive wholesale marketplace. Dominion purchased Millstone in 2000 and has made healthy profits since then, due to Connecticut’s long-standing high electricity prices. Now that low natural gas prices and increasing competition from low cost renewable resources are bringing down wholesale electricity prices, reducing shareholder returns for Dominion, they are asking the state to intervene on their behalf.
What is particularly outrageous is Dominion is not even claiming that the reduction in wholesale electric prices threatens the viability of their power plant – only that it might in the future. Dominion proposes a “heads I win, tails you lose” scenario: They benefit from competitive markets when market conditions provide healthy profit margins, and force ratepayers to pay more when market competition lowers prices. Even if there was a threat of imminent closure, the regional wholesale market has mechanisms to ensure enough power is provided to the regional grid, providing other opportunities for Dominion to boost revenues if needed to stay open.
Even worse, Dominion’s proposal would prop up an old existing technology by undercutting renewable wind and solar power. The state power auction Dominion wishes to enter has been created to develop new renewable energy resources in Connecticut and New England, not to prop up mature, uncompetitive power plants. Nuclear power represents about 50 percent of the power generated in Connecticut. If that volume of power is allowed to displace demand for renewables, it could stifle continued growth of wind and solar power here and throughout New England. That would set back current progress being made towards shifting to 100 percent clean, safe, affordable renewable energy in coming years.
Dominion’s nuclear power plants are old and getting older. Rather than prop them up with subsidies and higher rates for Connecticut’s consumers, we should be encouraging continued rapid growth of the cleaner, safer, and cheaper renewable energy sources we need to meet our energy needs once the nuclear plants reach the end of their life and must be shut down.
Katharine Cohen is state director of ConnPIRG.
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