Millstone Power Station debate heats up

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

Waterford — Whether you fear Millstone Power Station could shutter within a few years and create an economic and energy grid crisis, or believe plant owner Dominion Energy is making empty threats about closing before its licenses expire, state regulators want to hear from you.

The Department of Energy and Environmental Protection will issue its final request for proposals for the zero-carbon energy auction by July 31. DEEP says it will pick bid winners by this winter.

Millstone's participation in the zero-carbon auction follows years of pushing from Dominion and lawmakers, who are concerned that cheaper, abundantly available natural gas could threaten the plant's survival in the wholesale energy market.

DEEP in February agreed to let Millstone compete in the zero-carbon auction against higher-priced hydropower, solar and wind. But the draft request for proposals issued in late June includes a caveat preventing Millstone from getting the best deal possible until 2023. That's when DEEP proposes to allow Millstone to be considered "at risk" of closure — a designation that would let regulators weigh Millstone's environmental and grid benefits as opposed to just its bid price.

"The whole thing is, Millstone is at risk now," Waterford First Selectman Dan Steward said in a recent interview. "They are willing to close the facility and we're in trouble if they do that."

While public data shows the plant should remain substantially profitable for more than a decade, Dominion argues Millstone is part of a larger portfolio. They say to justify investing hundreds of millions of dollars in maintenance, upgrades and security, Millstone requires greater financial security than the wholesale market provides.

And without the competitive edge of an at-risk designation, Dominion says it may not even submit a proposal in the zero-carbon auction it fought to compete in.

"Dominion Energy must face critical business decisions regarding the future of Millstone, irrespective of the consequences those decisions might have on Connecticut or the New England region," Dominion President and CEO Paul Koonce said recently. Dominion plans to file additional comments by Friday.

As of Tuesday night, DEEP had received a handful of comments from the public and lawmakers. More than a dozen lawmakers filed a letter urging DEEP to reconsider its proposal to wait until 2023 before potentially considering Millstone at risk.

State Rep. Holly Cheeseman, R-East Lyme, told the Southeastern Connecticut Council of Governments on Wednesday that DEEP's draft request for proposals does not represent the legislature's intent. The council unanimously voted to send a letter, signed by the council's executive director James S. Butler, in support of amending the request for proposals to comply with the law the General Assembly enacted. Several officials expressed interest in sending comments on behalf of their municipalities.

"This is a bipartisan effort," Cheeseman said. "Everyone in the region realizes what a terrible, terrible outcome it would be if we were to close those plants."

Steward filed a letter to regulators Tuesday, urging them to recognize the plant was "at risk" and to weigh Millstone's bids based on all of its benefits to the community. The facility accounts for about 35 percent of Waterford's annual tax revenue, between $25 million and $30 million the last few years.

"If Millstone were to go away and somebody said you have to find $35 million to keep your budget whole, where do you go?" Steward said. He noted the Representative Town Meeting's recently re-established Long-Range Financial Planning Committee plans to take up that very concern.

Competitors, renewable advocates and groups who fought Millstone's participation in the zero-carbon auction remain steadfast that the plant is unlikely to close anytime soon.

Regulators' consultants reached the same conclusion last year, noting Millstone was obligated to provide electricity to the regional grid that it already had sold in advance through 2023. Dominion could incur significant costs trying to shed those obligations and would face steep penalties for not meeting them, regulators said.

"Millstone's plea of poverty and threat to close 'now' is a slap in the face of the DEEP process and the legitimate interests of ratepayers," said David Gaier, spokesman for energy company NRG, which is likely to file comments by Friday. Gaier cited Millstone's energy capacity obligations and added that "with the recent reduction in federal corporate taxes, Millstone is projected to save an additional $60 million a year. These are clearly not the attributes of a generator 'at risk.'"

Dominion argues it has only sold energy capacity in advance as part of a good-faith effort to let the legislative and regulatory process play out. Unless DEEP changes course, Dominion said regulators should assume Millstone won't participate in advance markets next year.

Dominion executives have cited their 2012 decision to shutter the Kewaunee Power Station in Carlton, Wis., as an example of a "difficult decision based on operations but a prudent decision" for shareholders that could be replicated in Connecticut.

Millstone Unit 2 is licensed until 2035, and Unit 3 until 2045. Unit 1 shut down in 1995.

b.kail@theday.com

How to comment

What: Public comment on regulators' draft request for proposals for zero-carbon energy

Deadline: 4 p.m. Friday.

Send comments to: DEEP.EnergyBureau@ct.gov">DEEP.EnergyBureau@ct.gov.

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