Critics: Millstone tax proposal unfair, out-of-line, anti-business
Hartford - A bipartisan group of lawmakers and southeastern Connecticut municipal, labor and business leaders Wednesday denounced a proposed state tax on electricity generators that targets the Millstone nuclear power station in Waterford.
The legislative proposal would tack various new charges onto oil, coal and nuclear power producers. Yet a full 97 percent of the tax would be shouldered by Millstone, the sole operational nuclear station in Connecticut.
"I'm not a big business guy - I'm a pretty big labor guy - but that just makes no sense at all," said state Rep. Ernest Hewett, D-New London, one of 18 state lawmakers at the news conference at the state Capitol.
Dominion Resources Inc., of Richmond, Va., owns Millstone and has said it would close one or more of the facility's operating reactors if the tax becomes law. Neither the House nor the Senate has yet to act on the bill.
"This is such a huge disparate tax, and no business should be forced to bear this tax," David Christian, chief executive officer of Dominion Generation, told reporters Wednesday. Christian also said it would be "unwise" to operate a nuclear plant with the thin margins that would result.
Bill opponents criticized the tax measure as sending an anti-business message about Connecticut and discouraging investment in the state. Even if Millstone remained open and paid the tax, the tax would likely get passed on to consumers as a rate increase, they said.
"Senate Bill 1176 would send our entire state in absolutely the wrong direction in regards to economic development," said state Sen. Andrea Stillman, D-Waterford.
But the bill's proponents argue that the tax would ultimately benefit ratepayers while merely trimming the high profits Dominion has made for years in Waterford.
Backers include House Speaker Christopher Donovan, D-Meriden, the state Office of Consumer Counsel, as well as Rep. Vickie Nardell, D-Prospect, and Sen. John Fonfara, D-Hartford, who are co-chairmen of the Energy and Technology Committee that voted 12-9 last month to forward the bill.
Consumer Counsel Mary Healey dismissed arguments that the tax is a state-directed attack on business. Proceeds from the tax are to go to paying off bonds, and then providing ratepayer relief and supporting alternative energy projects.
"I'm getting tired of this anti-business refrain," Healey said Wednesday afternoon. "Ratepayers are also businesses, so it's not business unfriendly."
During the news conference, Christian, the Dominion Generation CEO, was questioned about an earlier and separate proposal by Gov. Dannel P. Malloy that would tax all energy generators. Christian said he was open to discussion on "the concept of a temporary shared sacrifice to help the governor." The Malloy proposal would have cost Millstone about $33 million a year, the company said.
An economic impact study of the Millstone station, commissioned by Dominion, determined that the plant pays a $33.6 million in taxes a year to state and local governments, including $17.7 million in annual property taxes to Waterford.
Millstone employs 1,080 people and 350 contractors. Dominion shed 200 jobs at the nuclear facility in 2010, including laying off about 50 workers who didn't accept the company's voluntary separation offers.
Waterford First Selectman Dan Steward said Dominion represents about 30 percent of the town's tax base. He said the uncertainty surrounding the tax and the potential plant shutdown may already be costing the town money as it issues bonds for school projects.
One firm, which holds about $35 million of the town's municipal bonds, has been calling the town almost daily with concerns.
"Our bond rating is already being affected by just the presence of this bill," Steward said.
State Rep. Ed Jutila, D-East Lyme, stood with opponents of the tax.
"This is simply patently unfair to put a burden of this size on one single enterprise in this state," Jutila said. "The result would be increased costs for ratepayers, either because it gets passed on to consumers or because the plant shuts down."
Joseph Rosenthal, principal attorney for the consumer counsel, criticized Dominion on Wednesday for scaring workers and residents with threats of layoffs.
"They've already shown that they will lay off people," he said. "People were laid off last year despite very excellent profits."
Those layoffs were done to reduce costs at Millstone, according to Dominion spokesman Ken Holt, who said plant safety was unaffected.
"We had high [worker] numbers compared to the industry," he said.
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