Dominion shares Millstone data with DEEP, PURA
Waterford — Dominion Energy recently shared confidential financial data on Millstone Power Station with regulators as the state considers energy market overhauls Dominion claims are vital to sustain the Waterford plants.
Dominion's decision to divulge some of Millstone's financials followed pressure to open its books to convince regulators and lawmakers that the facility faces dwindling profits along with other U.S. nuclear plants threatened or shuttered primarily by stiff competition from low-priced natural gas. The plant produces about 50 percent of the electricity used in the state, officials have said.
According to a Nov. 30 affidavit, Dominion shared "two exhibits" — both under a protective order barring public release — "containing confidential and proprietary financial data and calculations for Millstone Power Station" with the Department of Energy and Environmental Protection and the Public Utilities Regulatory Authority.
The agencies are charged with assessing Millstone's economic viability and completing a final report by February, per a July executive order from Gov. Dannel P. Malloy. DEEP and PURA expect to release a draft report on their assessment next week, with a public hearing set for 6 p.m. Tuesday, Dec. 19, at Waterford High School.
In October, Malloy signed a bill allowing, but not requiring, energy officials to open the door to Millstone to sell electricity directly to utilities in a state-sponsored competitive bidding process currently open to renewables and other low-emitting energy sources.
Many local officials applauded the bill, but regulators and Malloy still urged Dominion to at least privately release financial documentation demonstrating Millstone's need for market changes.
Millstone spokesman Kenneth Holt said the bill signed by Malloy on Oct. 31 "was certainly a significant step in the process."
Asked about the nature of the information shared privately with DEEP and PURA, Holt said he could not discuss specifics but noted the data revealed Millstone faces the same challenges as the rest of the nuclear industry.
"Millstone is no different," Holt said. "We feel the information we've presented to the state demonstrates that."
Whether the confidential data Dominion relayed in recent weeks was sufficient to appease regulators remains unclear.
DEEP spokesman Chris Collibee confirmed that agency received Dominion's confidential financial information but said he could not yet answer detailed questions about how the data compares with initial DEEP and PURA reports showing the plant's financial position would be strong for years to come.
"We will review the financial data as we would any other piece of information," Collibee said. "This is still an open matter and the draft report will be released sometime next week."
Messages left with PURA and the governor's office were not immediately returned.
Public filings reviewed by analysts indicate Millstone is profitable, but Dominion has hinted that, without legislative action enabling Millstone to compete in a higher-priced market among wind, solar and hydropower, the state jeopardizes the plants' 1,500 jobs, energy production and statewide emission-reduction goals.
Holt added that the overhauls made possible by the October bill are different from efforts to boost profits of struggling nuclear plants in states like New York and Illinois.
"Right now the people that buy our power tend to be hedge funds who eventually sell that power to utilities. By the time it gets to a utility, the price is higher," Holt said, saying the legislation eventually could "eliminate that middle man."
David Gaier, spokesman for NRG, one of several energy firms that opposed the legislation, argued that if utilities end up "paying more than the market price" established in the existing market, "it's going to cost ratepayers more."
"I think it's important that DEEP, PURA and the public be assured that whatever information they've provided is independently audited," Gaier said of Dominion's financial data.
Consultants hired by DEEP and PURA, Boston-based Levitan & Associates, forecast in a preliminary progress report in October that "Millstone's financial prospects are bright," with strong cashflows from energy and capacity sales into the New England wholesale market from mid-2021 through mid-2035.
Even in what Levitan & Associates described as a worst-case scenario of lower-than-expected natural gas prices and higher-than-expected operations and maintenance costs, Millstone would remain profitable, according to the consultants.
Holt disputed the report, saying Levitan & Associates "looked at typical costs for dual nuclear plant sites ... but we're not a typical site."
Millstone's costs are greater than normal, Holt argued, because its three units — one is no longer in operation — are dissimilar, requiring separate training units and separate operating staff.
Asked about the report, Richard Levitan, president of Levitan & Associates, said, "These analyses are super detailed and require a lot of research. We've been working on it for many months and we're about done."
Levitan said he was not fully aware of what Dominion had shared since DEEP and PURA asked a host of financial questions in August and September.
Dominion officials say they shared the proprietary data in a mix of face-to-face meetings over the last several weeks and sealed envelopes delivered to DEEP and PURA leadership in late November.
The data is under a protective order barring anyone granted access from revealing the information publicly, according to the Nov. 30 filing. DEEP and PURA must keep a log of all staff with access to the confidential information, and no one can be added to the list without Dominion's written consent, per the protective order.
Dominion claimed in September that Connecticut was "at a critical crossroads when it comes to the future of Millstone," telling the state that "to ensure a future for Millstone in Connecticut," their assessment must be combined with legislative action.
In response to DEEP and PURA financial questions in September, Dominion offered statistics on payroll and property taxes — which in 2016 amounted to $188 million and $27.1 million, respectively — but refused to publicly delve into proprietary details on operational costs, revenues, estimates, contracts and strategies.
But Holt said Dominion agreed to unveil certain data after state officials agreed to full confidentiality.
State Sen. Paul Formica, R-East Lyme, co-chairman of the Energy and Technology Committee, said in the weeks after the legislation, Dominion and state officials held more candid meetings.
"Dominion has always said they would discuss that privately but not publicly," Formica said of the financial data. "I just look forward to DEEP and PURA implementing the intent of the legislation we passed and allow nuclear power to be part of the procurement that the state provides so we can begin to drive down energy costs."
State Rep. Kathleen M. McCarty, R-Waterford, said she firmly backed the energy market changes, saying the vast majority of locals want Millstone to stay and arguing "you can't just get rid of nuclear" because it serves as "a transition to get over to the renewables."
"I thought (the sharing of confidential information) was fair and just the way it was done by both parties," she added.
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