Protecting Millstone, state's primary electric provider
As Connecticut residents, we pay the highest retail electricity rates in the continental United States. A bill before the state legislature could change that, but there are special interest groups in our state that want to keep things as they are. They want us to keep paying unreasonably high rates in order to preserve their own profitability. That’s why they oppose Senate Bill 106.
The proposed legislation would allow Dominion Energy, the owners of the Millstone nuclear power plant in Waterford, to bid in a state-sponsored auction to sell electricity produced at our plant directly to consumers. Under the current process most of the power produced by Millstone is bought first by energy dealers (Hedge Fund managers) and then sold back into the regional energy market, increasing the price we pay in our monthly electric bill.
Allowing Millstone to participate in the state-sponsored auction would lead to lower prices, because to win approval, the winning bidder will have to offer its power at the lowest price possible.
There are consumer protections built into the legislation. Winning bids are only chosen if they are approved by the Department of Energy and Environmental Protection, the Office of Consumer Counsel, the Office of the Attorney General and the Public Utility Regulatory Authority. All four need to agree that an offer is “in the best interest of consumers.” If Dominion does not meet that standard, its bid for Millstone’s power will be rejected.
Senate Bill 106 requires no use of taxpayer money or other forms of ratepayer support. It’s not a “bail out.” The only thing the bill does is allow for an auction to seek the lowest price possible on behalf of Connecticut electricity customers. There is no risk to consumers. There is no subsidy to the power industry by taxpayers. From a consumer perspective, from my point of view, there is no risk.
Opponents of the legislation claim this bill would be beneficial to Millstone. There are benefits to Millstone in the security it offers our employees and operations. But the only way Dominion Energy attains those benefits is if it offers a low bid and is selected.
A winning bid for Dominion is a win for Connecticut ratepayers, because Millstone is capable of generating approximately half of Connecticut’s electricity, it employs 1,500 people in high paying jobs, and it produces carbon-free power that helps the state meet its greenhouse gas reduction goals. Its power is there all the time, including windless, overcast days.
There are economic realities to consider that are affecting the nuclear industry. In states around the country, nuclear power plants have announced closures and are being replaced by natural gas fired power plants. It is not that these plants are poor performers, or inefficient, but the cost of running them cannot justify continued operation when compared to the return on investment for shareholders. Unfortunately, Dominion Energy is keenly aware of this. We had to close a high performing nuclear power plant due to its economic uncertainty. This is an economic reality Connecticut cannot ignore when considering the issue.
Connecticut is in a unique position when it comes to competition between nuclear energy and natural gas fired plants. Connecticut does not have the pipeline system necessary to bring more gas fired plants on line quickly. There is limited support for expanding the natural gas pipeline system throughout the state. If Millstone were to cease operations, consumer electricity prices would spike as a matter of supply and demand. This is the real reason other energy companies and special interest groups are opposing Senate Bill 106. The loss of Millstone as an energy producer would allow them to become more profitable. That is the bottom line.
Under Gov. Dannel P. Malloy’s leadership, Connecticut has committed to lower electricity prices, increased reliability, and lower greenhouse gas emissions. Millstone would help Connecticut achieve all three objectives. Connecticut has a clear choice on this issue: Keep our electricity prices high or create an avenue to bring them down by allowing Millstone to bid into the state-sponsored auction.
Craig T. Olsen is the plant manager for Millstone Power Station in Waterford. The station operates two nuclear reactors.