Hydro firm says regulators inflate potential costs of Millstone closure

Waterford — A major hydroelectricity producer says Connecticut regulators' recent report on the Millstone Power Station inflated the projected ratepayer costs of a potential plant closure.

Michael Cuzzi of Brookfield Renewable, which operates more than 200 hydroelectric facilities, including dozens in New York, told regulators this week that hydroelectric resources in the Empire State could replace up to 20 percent of Millstone's energy output if necessary.

Contracts delivering more hydropower into the New England grid could mean cost savings for ratepayers, Cuzzi argued, compared to regulators' forecasts of increased solar and other renewable projects potentially sparked by a Millstone closure.

The Department of Energy and Environmental Protection and the Public Utilities Regulatory Authority are studying Millstone's economic viability as officials consider energy market changes that would benefit the plant, which owner Dominion Energy says is threatened by high operational costs and competition from cheap natural gas.

DEEP and PURA estimate that a premature plant closure would spike statewide utility bills by between $700 million and $5 billion depending on measures taken by the state to replace the electricity produced by Millstone. Those costs include a range of new plants, infrastructure and incentives for renewables, but not siting and construction costs for new facilities.

Overlooking hydro's potential in the region "unnecessarily inflates the presumed cost to ratepayers to replace or even exceed Millstone's non-emitting carbon capacity," Cuzzi told DEEP and PURA leadership at a public hearing in Hartford on Wednesday.

Brookfield did not immediately respond to requests for comment Friday.

Brookfield is one of several energy companies and advocacy groups either challenging assumptions made by regulators in their report or openly opposing any market changes or potential subsidies that would benefit nuclear power and Dominion.

Lawmakers passed a bill in October that eventually could let Millstone compete with higher-priced solar, wind and hydroelectric producers in a state bidding process. Dominion says such a market is necessary to keep Millstone operational, as nuclear plants across the U.S. have suffered in markets competing with natural gas.

DEEP and PURA officials maintain they are reviewing all public comments in preparation of a final report on Thursday, Feb. 1, 2018.

"It is important that we hear from all stakeholders in this matter, including ratepayers, environmental advocates and businesses before we issue the final report to (Gov. Dannel Malloy) and the state legislature," DEEP spokesman Chris Collibee said Friday. "There is not more weight given to comments from one group versus another."

Asked about Brookfield's take on the draft report, Millstone spokesman Ken Holt on Friday referred to previous comments on the issue. Holt and other Dominion officials have been adamant that the company wants an opportunity to sell power to the state, not "straight subsidies" that have helped nuclear plants stay operational in other states.

Many state and local officials concerned about the economic and environmental impact of Millstone's premature closure support letting Millstone enter the bidding process along with renewables.

In addition to providing almost $30 million in annual property taxes to Waterford and more than $1 billion in statewide economic benefits, the Nuclear Energy Institute estimates Millstone prevents the release of 8.3 million metric tons of carbon dioxide annually, helping the state reach its emissions-reduction goals.

DEEP and PURA, whose draft report forecasted the plant would remain substantially profitable through 2035, will provide recommendations on proposals in their final report. The agencies note they have no knowledge of how Dominion weighs performance or profit levels to determine whether to keep individual plants operational.

While a public hearing on the draft report generated largely favorable comments on Millstone from lawmakers and locals in Waterford on Tuesday, the second hearing in Hartford on Wednesday saw more pushback from Dominion opponents.

Claire Coleman, a Connecticut Fund for the Environment attorney, told regulators that her organization recognized Millstone's power generation as vital to help the state reach emissions-reduction goals. But, she argued, "Millstone does not need a special deal to be (financially) viable ... in today's energy markets."

Kevin Hennessy, Dominion's state policy director in New England, emphasized that political battles over energy market changes were "behind us at this point in time," as lawmakers already opened the door for a state bidding process for renewables and low-emitters, which he called a "a no-risk venture."

"Regardless of what others may think, the decision (to close Millstone) lies solely with Dominion," Hennessy said.

If the plant closed prematurely, "There are a whole slew of scenarios that are negative from an environmental standpoint, an economic standpoint and local economy standpoint," Hennessy said.

DEEP and PURA will take written comments on the issue until Monday, Jan. 8, 2018.



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