Hartford - A committee of the Connecticut legislature narrowly approved Tuesday a proposed tax on generators of electricity to provide relief for ratepayers, finance alternative energy systems and raise revenue.

The legislature's Energy and Technology Committee voted 12-9 to approve the bill, which now heads to the Finance Committee. It would impose a tax on generators that use oil, coal and nuclear power. The tax would raise $340 million in revenue, with $332 million from Connecticut's Millstone nuclear plants.

Dominion Resources Inc., which operates the plants in southeastern Connecticut, said the tax will raise prices for consumers and that it is discriminatory.

Daniel Weekley, vice president of government affairs for the Richmond, Va.-based Dominion, told the committee last week its proposal is a "punitive energy tax" that would force it to raise prices. It also undermines business as Gov. Dannel P. Malloy insists his administration is pro-business, he said.

"Dominion will be required to pay more than $300 million in additional taxes - not exactly what Gov. Malloy intended when he called upon businesses to share in the pain," Weekley said.

Weekley and other opponents say the legislation, which bars taxes on electricity generated in Connecticut exclusively through fuel cells or an alternative energy, discriminates against nuclear, oil and coal.

Rep. Vickie Nardello, co-chairwoman of the Energy and Technology Committee, said the Millstone plants have benefited from low costs and can bear the proposed tax more than other generators.

"Where is the fairness here?" she asked.

Rep. Laura Hoydick, R-Stratford, the ranking House Republican on the energy committee, said higher taxes on the generators will lead to higher rates.

"If we feel that this is not going to affect us negatively, it most certainly will," she said. "Stifling generation will dissuade other generators from investing in Connecticut."

Rep. Betsy Ritter, D-Waterford, lives near Millstone. She called the bill "very bad policy" and said it excessively punishes the nuclear industry, the lowest emitter of greenhouse gas in Connecticut.

"This bill strictly rewards natural gas generators, encourages them to build their presence in our state," she said.

The tax also would provide much needed revenue as the state faces a large budget deficit and finance development of clean energy, Nardello said.

Consumer and environmental advocates support the measure. Christopher Phelps, program director at Environment Connecticut, told lawmakers at a public hearing last week that the revenue will support spending for renewable energy and energy efficiency and would repeal a tax established last year.

However, the New England Power Generators Association said that because no other state in New England imposes a tax on generators of electricity, such a tax would make Connecticut less competitive in attracting business.

Individuals and businesses have complained for years that electricity prices have risen dramatically since Connecticut deregulated electricity in 1998 and have pressured the legislature to find ways to reduce costs. Separate legislation overhauling Connecticut's energy policy is intended to reduce electric rates, encourage renewable and homegrown energy such as solar and wind power, help reduce energy waste and lead to a long-range state energy plan.

Associated Press writer Susan Haigh in Hartford contributed to this report.