Millstone to remain open as Dominion, utilities reach deal

Hartford — After warning for years that Millstone Power Station faced early closure, Dominion Energy this week hammered out a 10-year deal with Eversource and United Illuminating that state leaders say will keep the Waterford nuclear facility operational.

The contract, announced Friday afternoon by Gov. Ned Lamont and Department of Energy and Environmental Protection Commissioner Katie Dykes, comes two weeks after Dominion Energy hinted that Millstone's closure remained on the table if negotiators failed to reach a deal by Friday.

Lamont said the loss of Millstone — which generates 2,100 megawatts, employs 1,500 workers and is Waterford's largest taxpayer — would have been "catastrophic for our state and our region."

"The shutdown of the plant would have exposed the New England region to a nearly 25 percent increase in carbon emissions, increased risk of rolling blackouts, billions of dollars in power replacement costs, and the loss of more than 1,500 well-paying jobs," Lamont said.

The deal reached between Dominion and utilities reduced the "incremental ratepayer cost of the contract" by almost 50 percent compared to the bid originally selected by DEEP in its zero-carbon electricity auction in December. Prices have not yet been revealed, and the contract now advances to the Public Utilities Regulatory Authority for review.

The contract will see Millstone deliver 9 million megawatt hours per year for a decade.

In a statement, Dominion said it welcomed the agreement "and appreciates Gov. Lamont and his administration's leadership on an issue vital to Connecticut's economy and environment."

Rep. Kathleen McCarty, R-Waterford, one of several lawmakers pushing to support Millstone the last few years, called it "an historic agreement" and referenced nuclear plant closures, and threats of closure, across the U.S. over the last several years.

"The patience and perseverance paid off," she said. "Like I've said over the last three years of battle, it's a win-win for Waterford, the state, the community and ratepayers, to have clean, reliable energy."

Waterford First Selectman Dan Steward said the town was "thrilled to have Millstone continue to stay open, keep the people employed there and provide the state the amount of power that, right now, there aren't alternatives to replace."

Steward said the 10-year contract gives the state time to find new technology and renewable energy options that will eventually replace electricity from one or both of Millstone's operating units. The deal also gives the town time to find alternative sources of revenue, Steward said. Millstone accounts for more than $20 million in annual property taxes for the town.

"It's not just 10 years away and we're not going to do anything," Steward said. "We have to be prepared."

Had the deal not been reached by Friday, Dominion may have notified the regional grid operator that it intended to close by 2023.

Regulators in 2017 said Millstone would remain profitable for years, but they also forecast stark economic and environmental impacts if the nuclear plant were to shutter prematurely. DEEP, Dominion and Dominion's opponents debated for more than a year over whether the plant was truly at risk of retirement, especially since Dominion was obligated to provide electricity to the New England grid over the next few years.

Dominion, which turned over to regulators confidential financial data to demonstrate its at-risk status, had warned for years that high operational costs and competition from cheap natural gas threatened Millstone's future.

Nuclear plants in New York, Illinois and New Jersey have faced early retirement before lawmakers in those states approved subsidies. Dominion closed Kewaunee Power Station in Wisconsin in 2013.

In Connecticut, Dominion sought to avoid competition with natural gas in the wholesale market by selling some of its electricity in the state's auction for zero-carbon power producers.

Lawmakers in 2017 paved the way to allow nuclear facilities to compete with higher-priced solar, wind and hydropower in the zero-carbon auction, and Millstone in December 2018 won a contract with DEEP.

But Dominion later said the deal approved under the administration of former Gov. Dannel P. Malloy wasn't good enough and pressed Lamont's office and utilities over the last few weeks.

"This is a huge win for Connecticut, the region, and our colleagues at Millstone," said Paul Koonce, Dominion president & CEO of power generation, in a statement Friday. Koonce added that the deal preserved "the vast majority of Connecticut's carbon-free electricity" and helps the state reach its aggressive carbon emissions reduction goals.

In a statement, Eversource spokeswoman Tricia Modifica said, "We are pleased to reach agreement on retaining a major zero-carbon and economic resource for CT in accordance with the statutes and at the direction of DEEP."

Lamont also announced that all New England governors, in coordination with regional grid operator ISO New England, had committed to evaluating "market-based mechanisms that value the contribution that existing nuclear generation resources make to regional energy security and winter reliability."

b.kail@theday.com

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