Don't miss opportunity to secure Millstone's future
Was the statement by a Dominion spokesman Monday stating that Dominion Energy would have to reassess the future operation of Millstone Power Station in Waterford a negotiating tactic meant to pressure the legislature into action or a genuine threat that Millstone could close in a not-so-distant future?
It was probably a bit of both.
"Regrettably, if Connecticut chooses not to act, we will begin a strategic reassessment of our plans for Millstone Power Station," said spokesman Kevin Hennessy in comments first reported by the Hartford Courant.
The comments came after the Connecticut Mirror reported that a bill meant to assure the long-term viability of Millstone Power Station would likely fail to win approval in the state legislature this year.
That would be unfortunate, because this is the time to get a bill done. Evidence presented to the legislature documented the economic pressures facing nuclear operators such as Millstone, yet the plant is not in the type of a crisis that would make a potential shutdown imminent. At least so it has seemed based on information presented to the legislature.
Despite Hennessy's comments, it would be a major surprise to see Millstone close in the next year or two. In that regard, Hennessy may have been going for a little shock value to shake up Connecticut lawmakers, who have witnessed the departure of General Electric to Boston and the pending move of Aetna's headquarters from Hartford. Watching Millstone retire its two nuclear reactors because the legislature failed to act would be an infamous trifecta.
A study commissioned in October by Dominion concluded Millstone generates $1.5 billion in annual impact and employs a workforce of 1,000-plus, not counting the jobs from companies that contract to provide services to the nuclear station.
So while Millstone is not going to close tomorrow, the potential it could shutdown sooner than later is not something the legislature should be trifling with.
Ironically, critics pointed to the fact Millstone is not in any immediate danger of closing as evidence that no special treatment is necessary. But does the legislature really want to wait until a crisis looms? Millstone provides 55 percent of Connecticut’s power and does so without generating greenhouse gases. Lawmakers may not get such a good deal if faced with having to prevent the impending loss of Millstone’s power supply.
Millstone owner Dominion has made the the case that current energy pricing policies in Connecticut's deregulated market do not mesh with its nuclear model, built on long-term consistent operation.
The development of fracking technology has produced an abundance of natural gas and a growth in gas-powered electric generation plants. That has led to extreme volatility in the daily energy markets. Several nuclear plants, unable to operate profitably in those markets, have closed across the country.
Millstone is seeking the security of long-term energy contracts to secure the viability of its nuclear energy model. Under the proposed legislation, plant owner Dominion would be able to sell half of Millstone’s energy through such extended deals to mitigate price instability.
Safeguards in the legislation would require the Department of Energy and Environmental Protection, the Office of Consumer Counsel and the attorney general to verify the contracts were in the best interest of ratepayers.
This is a reasonable compromise, forcing Dominion to sell half of Millstone-produced energy in the existing market while providing consumer safeguards for the energy sales it ties to long-term contracts.
The natural gas industry, hoping to expand its market share, has led a strong lobbying campaign against the legislation, including extensive TV ads. Renewable energy groups also opposed the bill, fearing it would crowd out clean energy technology. AARP, expressing concerns about higher rates for seniors, opposed the legislation as well, though its apprehensions appeared overwrought.
While not as popular with green energy fans as solar and wind power, the fact is Millstone produces much of the power Connecticut and New England needs and does so without creating greenhouse emissions.
Despite the reporting of the bill's demise, Sen. Paul Formica, R-East Lyme, tells us he believes it may yet pass. It would be great if he is right.
If not, the legislature may only have the 2018 session to get this worked out. With time, the threat of Millstone closing will only grow more serious. If the debate stretches to another session, Dominion needs to make a better case for the necessity of such a policy change and that may require greater transparency about the nuclear station’s fiscal position and outlook.
Things are getting ominous. Connecticut does not need more bad news.
This editorial was updated to reflect new information.
The Day editorial board meets regularly with political, business and community leaders and convenes weekly to formulate editorial viewpoints. It is composed of President and Publisher Pat Richardson, Editorial Page Editor Paul Choiniere, retired Day editor Lisa McGinley, Managing Editor Tim Cotter and Staff Writer Julia Bergman. However, only the publisher and editorial page editor are responsible for developing the editorial opinions. The board operates independently from the Day newsroom.
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