Stakeholders clash over Millstone's future

Dominion's Millstone Nuclear Power Station is seen from the air May 11, 2005, in Waterford.  (Sean D. Elliot/The Day)
Dominion's Millstone Nuclear Power Station is seen from the air May 11, 2005, in Waterford. (Sean D. Elliot/The Day)

Waterford — Lawmakers, energy companies and environmental advocates clashed this week over the future of the Millstone Power Station, which owner Dominion Energy says is threatened by competition from low-priced natural gas on the wholesale energy market.

Dozens of stakeholders, including locals and Dominion competitors, made their final case to regulators weighing whether to let Millstone sell the electricity it produces in a more favorable market — namely a state bidding process where it would compete with higher-cost renewables and hydropower. Proponents say the move is essential for the environment, economy and electricity grid, while critics derided it as an undeserved economic windfall for a profitable firm.

On Wednesday night, Dominion — which has faced continued pressure to open Millstone's books to verify its financial situation — filed more than a dozen redacted financial documents shared with the Department of Energy and Environmental Protection and the Public Utilities Regulatory Authority, which are reviewing Millstone's economic viability in advance of a final report in February.

Millstone has garnered robust support from local and state officials, with almost 60 General Assembly members signing a letter this week urging regulators to recommend including nuclear in the state bidding process, which Dominion says is vital for the plant's continued operation. The plant's future, Dominion said this week, is "ultimately a management decision."

Energy experts and lawmakers say Millstone provides a low-carbon source of power while employing 1,000-plus workers and creating at least $1.3 billion in statewide economic activity. Lawmakers told regulators Millstone is the "lowest-cost, carbon-free, around-the-clock energy resource available."

"Where would Connecticut be if Millstone was not here over the past two weeks?" the lawmakers wrote, citing the record-breaking cold snap that's spiked energy prices and squeezed supply chains.

But Eversource, United Illuminating, Dynegy and other energy companies and associations pushed back against proposals for state or regionwide relief to help keep Millstone operational. Several firms said Millstone should remain profitable for decades, especially considering the corporate tax cuts signed into law by President Donald Trump in December.

"Quite simply, there has been no demonstration that a special solicitation is needed," James King of the Connecticut Industrial Energy Consumers wrote to DEEP and PURA.

A draft report released by DEEP and PURA in December showed that even in poor market conditions, Millstone likely would earn at least $100 million in annual profits between 2021 and 2035.

Dominion, which disputes the report's figures, says much of its electricity is purchased by hedge funds that hike prices, so selling to the state in a bidding process eliminates middle men and potentially could lessen ratepayers' bills.

But many commenters to DEEP and PURA remain unconvinced, arguing there were no guarantees Millstone's pricing would be a deal for ratepayers.

"The likelihood is minuscule that Dominion would submit a bid for a price that is merely sufficient to recover its costs and a fair rate of return," United Illuminating wrote. "In no event should Connecticut's electric customers be forced to pay an economic windfall to Dominion due to fears that Millstone may close, particularly when all publicly available evidence indicates that such fears are unfounded."

DEEP's and PURA's review was sparked by an executive order last summer from Gov. Dannel Malloy. In October, Malloy signed a bill that would allow regulators to include Millstone in the state bidding process as desired by Dominion, but only after regulators complete their review. A final report is due Thursday, Feb. 1.

"We will be reviewing the comments we received, along with the verbal or written testimony that was submitted as part of the two public hearings as we work toward the issuance of a final report," DEEP spokesman Chris Collibee said.

Dominion releases redacted Millstone data

Eversource claimed this week that confidential information Dominion turned over to regulators in November was "likely too scant to contain the level of detailed information needed to justify a valid determination of financial need" for the state to step in and help Millstone remain operational.

Dominion, which has been adamant about protecting trade secrets, said it "stands ready to continue to provide the agencies any additional information they require, on a confidential basis," to support its claims that Millstone suffers from higher-than-normal labor and operational costs not recognized in regulators' draft report.

On Wednesday, Dominion released more than a dozen pages of redacted Millstone financial data, including historical and projected expenses for the plant and comparisons with other facilities in Dominion's fleet.

The documents include several charts with monetary figures blacked out; in a chart labeled "Millstone Forecasted Expenses" from 2018 to 2022, all figures are redacted for operating expenses, including contractors, security, regulatory fees and staff.

"There was a lot of misinformation being spread about Dominion Energy not sharing information with DEEP and PURA," Millstone spokesman Ken Holt said Thursday. "We wanted to eliminate that perception, set the record straight, and show the very specific information that we shared to help DEEP and PURA make their decision."

Several companies and groups over the last few months had called on Dominion to augment its initial confidential filing by providing titled documents and redacted public versions.

Dominion had balked at such suggestions until Wednesday, but at least one competitor remained unsatisfied.

NRG spokesman Dave Gaier said Millstone's redacted filing "makes a mockery of the regulatory process and the governor's order."

"Dominion didn't respond to the vast majority of (regulators') questions in its initial response, and now has provided only a superficial PowerPoint presentation, with responses at much less detailed level than DEEP requested," Gaier said, calling for an independent audit of Dominion's figures.

Dominion maintains DEEP's and PURA's consultant, Boston-based Levitan & Associates, improperly compared Millstone to Dominion's Virginia plants and failed to account for Millstone's uniqueness in having two different unit types requiring costly "separate control rooms, separate spare parts inventory, distinct operator training and separate teams of licensed operators."

Millstone also has a much larger physical footprint than Dominion's North Anna and Surry nuclear stations in Virginia, requiring higher utility and maintenance costs and a larger security staff, Dominion argued.

Regulators also failed to consider that Millstone is in a high-cost northeastern state compared to North Anna's and Surry's placement in rural areas in lower-cost Virginia, according to Dominion.

"Evaluating the profitability of assets in a diverse company like Dominion Energy, which operates in multiple states throughout the nation, is a complex undertaking," Dominion wrote. "While we greatly value our role in Connecticut's energy and environmental landscape, economy and civic life, the continued operation of Millstone is ultimately a management decision."

Still, premature closure would require approval from the Federal Energy Regulatory Commission and ISO New England, the regional energy grid. Millstone's closure also would require Dominion to pay substantial penalties because it already has received payments for electricity capacity through 2021 in ISO New England's capacity auction.

Clean energy advocates push for renewable replacements

Several local environmental advocates and clean energy groups, including Sierra Club, Acadia Center and 350 CT, lobbied against state assistance to Millstone, steering regulators and lawmakers toward planning for renewable replacements of Millstone's electricity generation in the years to come.

"It would be against Connecticut's best interests to continue to invest in Millstone as the solution to meeting our Global Warming Solutions Act (GWSA) emissions reduction targets," Claire Coleman of the Connecticut Fund for the Environment said. "Connecticut should instead be focusing on creating an actionable plan to replace the plant with energy efficiency and renewable resources by the end of its licensure in 2035 (Unit 2) and 2045 (Unit 3)."

Yet many lawmakers and energy officials argue Millstone is essential to reducing greenhouse gas emissions. DEEP and PURA predicted in the draft report that without Millstone, the state could see increased fossil fuel production to make up for lost electricity. The state also might increase reliance on pipeline-constrained natural gas, hurting ratepayers in harsh winters when energy prices peak.

The Nuclear Energy Institute estimates that in Millstone's absence, other energy generators would release 8.3 million metric tons of carbon dioxide annually.

The GWSA called on the state to reduce greenhouse gas emissions to 10 percent below 1990's emission levels by 2020, and 80 percent below 2001's emission levels by 2050.

If Connecticut procured half of Millstone's output "for our residents, we would already be achieving the 2020 required emission reduction target," according to Sen. Paul Formica, R-East Lyme.

Brookfield Renewable, a major hydropower provider, countered that DEEP and PURA overestimated the impact of a Millstone closure, saying Connecticut and New England could rely in part on electricity from existing hydro plants in New York.

b.kail@theday.com

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