Waterford — Millstone Power Station's push for an edge in Connecticut's "zero-carbon" energy auction picked up steam Friday as the Public Utilities Regulatory Authority released a draft decision deeming the nuclear plant "at risk of retirement."

It's a designation long sought by owner Dominion Energy and lawmakers concerned about the potential economic and environmental impacts of an early Millstone closure.

In the draft decision, PURA said Dominion "sufficiently disclosed its financial data in a manner that facilitated the authority's review of Millstone's actual financial circumstances in recent years, as well as the company's projections on its financial condition going forward."

The information provided by Dominion "provided a clearer picture of the business and financial risks facing Millstone," wrote PURA, which found that "demonstrated reductions in market revenues along with the comparatively high fixed costs associated with operating a nuclear facility are critical factors affecting the viability of the Millstone units."

The Department of Energy & Environmental Protection is reviewing dozens of bids from hydropower, solar and wind facilities and two nuclear plants — Millstone and Seabrook Station in Seabrook, N.H. — in the zero-carbon auction. DEEP paved the way for nuclear power to compete in the auction this summer, after repeated pushes from lawmakers and local leaders and warnings from Dominion that Millstone faced early closure largely because the wholesale market is dominated by cheaper natural gas.

Proposals from at-risk energy producers will be scored by DEEP on environmental and grid benefits along with price; those without the at-risk designation will be scored on price alone. It's up to PURA to determine whether Millstone is considered at risk of closure, and the final decision should come later this winter after further comments from Dominion, regulators and utilities.

After DEEP selects winning proposals in the auction, the selected energy producers will hammer out contracts with Eversource and United Illuminating. Those contracts must be approved by PURA early next year. Prices and amounts of electricity offered have been redacted in public versions of proposals during the auction.

DEEP expects to select winning auction proposals by the end of the year. But PURA's draft decision is another win for Dominion, which received support from DEEP and the Office of Consumer Counsel in September, when both agencies urged PURA to grant at-risk status for Millstone.

Dominion earlier this year had submitted the confidential financial data — redacted in public versions — to show PURA that without an at-risk determination in the zero-carbon auction, Millstone faced a mix of lower revenues and high operations, maintenance and security costs that all threatened the plant.

In a previous briefing to PURA, Dominion noted that in 2012 it "prematurely retired a very well-run, but uneconomic" nuclear plant in Wisconsin, the Kewaunee Power Station, which faced similar price pressures due to low-cost natural gas. Kewaunee was licensed to operate until 2033. Millstone Units 2 and 3 are licensed with the U.S. Nuclear Regulatory Commission until 2035 and 2045, respectively. Unit 1 was decommissioned in 1998.

"We are pleased to see that the Public Utility Regulatory Authority agrees with Dominion Energy that Millstone is at risk," plant spokesman Ken Holt said Friday. "They have been given access to our confidential information, have done their own analysis, and reached their own conclusion."

"We are now focused on the zero carbon procurement," he added. "We made numerous offers that would both ensure Millstone's continued operations and provide benefits to Connecticut ratepayers ranging from the hundreds of millions of dollars to billions of dollars."

Competitors, utilities, environmental groups and even consultants hired by DEEP have disputed Dominion's threats of closure, arguing that the plant remains profitable. Regulators consistently said, however, that early plant closure would spark heavy job losses, grid unreliability and spikes in greenhouse gas emissions from replacement power sources.

Regulators and Dominion's critics also have argued the cost of shedding capacity obligations to the New England power grid would be so expensive that Millstone could not feasibly close until those obligations expired in June of 2023.

PURA's draft decision noted that Dominion argued the obligations would "not impact the decision to retire, though perhaps are a factor on when to wind down operations, and while the one-time cost to shed these obligations is uncertain, it might be the appropriate course of action for Dominion to take."

Dominion must decide whether to participate in ISO New England's next Forward Capacity Auction — which would include capacity commitments from June 2023 through May 2024 — by next spring, PURA said.

PURA said that even though DEEP believes the plant is not at risk until 2023, DEEP took the proper approach by allowing at-risk energy producers to be selected for contracts "even if it is determined ... to be at risk for only part of the period covered in its bid and not at risk for another part of the period." This determination could give Millstone an edge against zero-carbon competitors as soon as next year, which Dominion claimed was necessary to maintain continued operations.

Eversource and UI have argued that to protect ratepayers, PURA must limit contracts between Millstone and utilities to amounts required to simply alleviate the plant's at-risk status.

The utilities also argue that as proposed contracting partners, they should gain access to Dominion's confidential financial data.

b.kail@theday.com