Millstone bill passes Senate but fizzles out in House
Area officials were touting a bill that passed the state Senate on Wednesday as key to preventing Millstone, a major employer and energy provider, from leaving the region.
However, there was not enough support to push it through the state House of Representatives, The Associated Press reported late Wednesday night. Democratic House leaders agreed to hold only a limited discussion of the bill and it later was pulled from consideration, AP reported.
The Senate had voted 23-9 early Wednesday to pass the bill, S.B. 778. Inaction by the House could mean the legislation is dead; it was unclear whether the issue might be addressed in a special session, the The Connecticut Mirror reported.
Chet Wade, vice president of corporate communications at Dominion, Millstone's parent company, issued a statement late Wednesday. "We appreciate the Senate's strong, bipartisan vote to help customers and to reject calls to double down on the failed system that has produced the highest electricity rates in the continental United States," he said.
"We were disappointed that the House chose inaction," he said in the statement, adding, "Continued inaction harms customers, the state's ability to meet its climate goals, and the state's economy. We will continue assessing our investments in Connecticut while advocating for needed action."
“This legislation is a win-win for ratepayers throughout our state and one of Connecticut’s major employers," state Sen. Paul Formica, R-East Lyme, co-chair of the Energy and Technology Committee and a bill sponsor, had said in a statement earlier Wednesday. "Preserving Millstone’s ability to compete in the market is vital to maintaining the state’s energy stability and stopping the disastrous situation that would occur if Millstone closed."
"Millstone provides over half of Connecticut’s daily power and 30 percent of the power for all of New England," he said. "If the plant were to close, more than half of all of New England's electric power would have to be supplied by gas-powered facilities. Connecticut simply does not have that kind of capacity. That dramatic increased demand for natural gas, especially in the cold winter months, would lead to skyrocketing energy costs and ratepayers would suffer."
Under the bill passed by the Senate, the state Department of Energy and Environmental Protection would have conducted a study of nuclear power plants and would have decided if a competitive procurement process for nuclear power should be initiated, DEEP spokesman Dennis Schain said.
Formica said the bill would have provided for DEEP to conduct an appraisal of the nuclear energy environment in the New England region, including the current and projected economic conditions, and create a report by Jan. 1, 2018. The state would then implement corrective actions, as necessary, by May 1, 2018.
Formica had called it a "good compromise bill" that was not only about economics, but also energy stability over the next three to 10 years for Connecticut. He said it would provide an opportunity to allay all the questions that have been asked and offer solutions.
Dominion currently sells Millstone’s power through contracts with third-party hedge funds and Wall Street institutions. The availability of cheap natural gas prices is heightening market volatility and lessening Millstone's profits, company officials have said.
Eversource Energy, one of the bill's opponents, had expressed disappointment with the bill's passage in the Senate.
"We, along with other energy companies, Connecticut's AARP, and consumer and environmental groups continue to oppose the bill because customers would pay more for the same nuclear energy they receive today — all for the purpose of increasing profits for Dominion Energy," Mitch Gross, spokesman for Eversource, said in a statement.
Waterford First Selectman Daniel Steward said in a phone interview Wednesday that he hoped the bill would pass the House. He said "something has to happen to maintain business" in Connecticut.
"This is a big company, and it's a huge asset to our community," he said about Millstone. "It also provides half the power to our state of Connecticut."
A Dominion spokesman had made statements on Monday that the company would "begin a strategic reassessment of our plans for Millstone Power Station," if the legislature did not take up the proposed bill before the end of the session.
Barclays, a global financial services provider, issued an analysis on Monday that if the legislation failed and next year's prices remain close to 2017 levels, the retirement of the Waterford power plant "will become a realistic conversation."
"Dominion has indicated that the lack of gas infrastructure plus seasonal weather should provide enough natural price support to keep merchant nuclear plants viable in New England; however, market conditions over the past two years have fallen short of expectations," Barclays wrote.
The Stop the Millstone Payout Coalition on Tuesday called Dominion's statements "scare tactics" and said that ISO New England — an independent, nonprofit group that oversees power system planning in New England — requires Millstone to remain open through May 2022.
“While it may be politically expedient for Millstone to scare lawmakers about the future of the plant, the claim that Millstone is at risk of closure is entirely unfounded. Millstone is the most profitable nuclear plant in the United States, and is predicted to be so for at least the next three years," the coalition said.
ISO New England "has a process in place that Millstone can follow if it is truly struggling — but instead, its owner is [resorting] to scare tactics because it wants a special deal," the group said. "At a time when so many Connecticut businesses and residents are legitimately struggling, it is an outrage that the nation’s most profitable nuclear plant is crying poverty. Our message to lawmakers is follow the money — do not be fooled.”
Ken Holt, a spokesman for Dominion Energy, said that it's not true that Millstone is required to stay open through that period. While Millstone has an obligation to ISO New England, Millstone would be able to get out of the obligation in a number of ways, including by paying a penalty.
"We are pleased that the CT General Assembly continues to value the importance of the carbon-free, round the clock electricity produced by Millstone," Holt had said in a statement after the passage of the Senate bill. "Thank you to the Senate Democrats and Republicans and the Governor's office for their support of Millstone and its more than 1,400 jobs."
Steward, Waterford's first selectman, said he considered Dominion's statements about strategic reassessment, if the legislation were to fail, not to be a "threat" but a "promise." He believes that if it's not economically feasible for Dominion to keep Millstone in Waterford, the company would leave.
"It's not a promise we can let happen," he had said, adding that the community needs Dominion to continue to remain a partner.
Associated Press writer Susan Haigh, The Connecticut Mirror and Day Staff Writer Judy Benson contributed to this report.