Debate over Millstone rages on

Dominion's Millstone Nuclear Power Station in Waterford, seen July 9, 2011, from the air.  (Sean D. Elliot/The Day)
Dominion's Millstone Nuclear Power Station in Waterford, seen July 9, 2011, from the air. (Sean D. Elliot/The Day)

Waterford — Power companies, environmentalists and trade groups recently filed sparring arguments to state regulators on how to determine whether energy producers, including Millstone Power Station, are at risk of early closure.

Those who filed comments this week to the Department of Energy and Environmental Protection and Public Utilities Regulatory Authority largely held their ground on Millstone. Several emphasized the plant's profitability according to publicly available data, while Dominion reminded regulators that nuclear plants in almost a dozen states in recent years have shuttered or announced plans to close before their licenses expire.

"Connecticut has the tools in place to avoid that from happening here and thereby preserve 1,500 well-paying jobs and the significant environmental, energy, and economic benefits that Millstone Power Station provides," Dominion attorney Lillian Cuoco wrote to regulators.

In February, regulators said nuclear plants like Millstone can compete in an auction among new and existing solar, wind and hydropower energy producers for fixed-price contracts with state-regulated utilities. Millstone-owner Dominion had pushed for inclusion in the auction, suggesting high costs and competition from natural gas in the wholesale market could lead to the plant's premature closure.

Bids from energy producers in the new auction process will be weighed on price alone unless they can prove they are at risk of closing due to financial difficulties. The bids of those deemed to be at risk can be evaluated on attributes other than price, such as grid reliability, greenhouse gas avoidance and fuel diversity.

Some stakeholders questioned why Millstone would ever be considered a zero-carbon energy producer, or challenged DEEP and PURA to implement policies pushing renewables, especially wind power.

"Millstone Power Station may play a role in the state's transition to the clean energy future, but Connecticut needs a realistic, long-term plan to replace the plant with clean energy," Acadia Center said this week.

In the absence of such a plan, Acadia Center argued new fossil fuel power plants eventually would replace Millstone. Ratepayers would be on the hook for new gas pipeline infrastructure to support them, which "would be almost immediately incompatible with the state and region's mandatory greenhouse gas targets," the environmental advocacy group said.

Dominion also faced critique from West Hartford resident Tom McCormick, who argued, "There is nothing zero-carbon about the continuation of Millstone operations."

"The plant is not fueled by pixie dust rather than fuel which has a heavy carbon footprint," he wrote to regulators. "The plant does not run itself."

Dominion pushes for prompt decision

Regulators say PURA will decide by October which energy producers are at risk. DEEP plans to select winning bidders by late 2018 or early 2019.

Dominion called on regulators to wrap up the process prior to March 2019.

Under the agencies' current timeline, Cuoco said, energy producers may not know whether a unit's considered at risk in time for key deadlines with ISO New England, the regional energy grid. Between March 8, 2019, and March 22, 2019, energy producers have a window to submit retirement bids to be removed from the grid's Forward Capacity Auction. The annual auction lets energy producers compete for commitments to supply energy capacity three years in advance.

"At-risk resources will need certainty" prior to that period, Cuoco said.

She also noted Dominion was committed to providing information "needed to make a well-informed decision." The company has submitted redacted data it says proves the plant suffers from higher costs than what was assumed by regulators. DEEP's and PURA's consultants, Levitan & Associates, said the plant's two active nuclear units would be profitable in the wholesale market through 2035.

Dominion said it engaged its independent auditing firm, Deloitte & Touche, "to confirm the financial data provided was incorporated into Dominion's annual audited financial statements."

State Rep. Kathleen McCarty, R-Waterford, backed Millstone in comments filed this week.

"With the possession of this important audited financial information, it is my hope that regulators will have a better and more complete picture of Millstone's financial viability," she said.

The Electric Power Supply Association, a trade association representing power producers, opposed Millstone's inclusion in an auction among zero-carbon energy producers. This week, the group was steadfast that "no special Connecticut ratepayer support should be given to Millstone unless and until Dominion sustains its burden of proving that Millstone units are at serious risk of premature retirement."

The EPSA noted that Millstone had not submitted a retirement bid in ISO New England's most recent auction.

Utilities demand in-depth financial details

Eversource attorney Vincent Pace urged regulators to require at-risk energy producers to annually disclose a host of independently audited financial data, including whether they've received direct or indirect payments or credits through other programs.

Pace also pushed for at-risk energy producers to disclose what steps they've taken to seek compensation from other sources such as the Department of Energy, the Federal Energy Regulatory Commission or ISO New England "to mitigate the future cost of this program on Connecticut ratepayers."

United Illuminating, meanwhile, argued that since utilities must buy power from "so-called at risk" energy producers, they should be provided "full party rights including unfettered access to review, analyze and conduct cross-examination regarding any such materials deemed confidential by PURA."

As proposed, only DEEP, PURA and the Office of Consumer Counsel, an independent state agency representing electricity customers, will have access to energy producers' confidential data.

Bids are due by September after DEEP issues a request for proposals by May 1. Energy producers seeking at-risk status must petition PURA by May 18 and submit financial data backing up their claims.

b.kail@theday.com

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