With consumers bracing for skyrocketing electric rates on Jan. 1, state officials say the situation could have been even worse.

But in 2019 the state struck a 10-year deal with the Millstone nuclear power station in Waterford that has ensured the plant reliably generates electricity.

Millstone was facing potential closure more than five years ago when cheap natural gas threatened the financial viability of nuclear plants around the country. The situation has turned around completely as natural gas prices have skyrocketed recently — and plants running on natural gas have caused electricity price hikes.

State environmental Commissioner Katie Dykes, who oversees energy in the state, said the Millstone reactors have been upgraded so Millstone 2 is licensed through 2035 and Millstone 3 is licensed through 2045. Millstone does not burn any fossil fuels, so it does not produce greenhouse gases that contribute to global warming.

“We felt that if we didn’t keep Millstone running, we would have massive reliability problems and rolling blackouts on the power grid in the wintertime, particularly,’' Dykes said in an interview. “And we would take a major step back in decarbonizing the grid because if Millstone had shut down prematurely, greenhouse gas emissions — across not just Connecticut, but the entire New England power grid — would have increased by about 23%, digging the hole deeper at a time when we’re trying to fill it up. Those were the principal motivations for doing that contract.’'

In the short term, Connecticut consumers can choose lower supply prices that are available under the electric deregulation law that was passed more than two decades ago. And legislators have allocated more money for heating assistance for low-income households.

Gov. Ned Lamont said the state needs to address electricity prices on multiple fronts.

“I’d say, short term, we’ve got to provide relief for people,’' Lamont said when asked by The Courant. “We’ve got to make sure we keep the lights on, make sure you can afford heating. We’re coming into the four coldest months of the year. We’ve got LIHEAP a big addition in funding, compared to what we were doing pre-COVID. I think that makes a difference. The utilities did put up a little bit of money, especially Eversource.

After the rate hikes were announced, Lamont said that Eversource customers would receive a credit of about $10 per month that is largely from savings from Millstone. Since September, average residential customers of Eversource had already been saving about $9.78 per month while UI customers have been saving about $7.72 per month.

“But you’ve got to do more than just subsidies to deal with the problem,’' Lamont said. ’'I appreciate the utilities saying, ‘Don’t blame me. We’re just a pass-through. You’ve got to go to the generators.’ But I need them as part of the solution as well. That solution, from what we’ve been able to do, is double-down on Millstone and longer-term wind power. We’ve got to get access to the hydro-power coming out of Quebec. It’s been shut down by New Hampshire and Maine and referendums. That would be the third leg of the stool, on top of energy efficiency.’’

Off-shore wind

In the long term, Lamont is a major proponent of wind energy production off the coast of New London.

“I think those turbines start spinning in about two, 2 1/2 years,’' Lamont said when asked by The Courant.

But state Rep. Holly Cheeseman, a Republican who represents East Lyme and Salem, was less optimistic based on various delays in a complicated construction project. Cheeseman predicts that the wind project will not be ready for another three or four years as “they’re seeing real supply-chain issues.’'

She also questioned the reliability of correctly predicting the way that the wind blows.

“It’s premised on the wind blowing at the optimum rate, and that gives you 100%. Well, you never get 100%,’' Cheeseman said. “You get about 40%. They saw that last summer and the summer before in Europe. The winds stopped blowing. The off-shore winds stopped producing electricity, and of course, they were not getting the natural gas from Russia. So they were in a world of hurt. ... It’s weather. In very, very cold weather, the wind doesn’t blow.’'

Cheeseman, though, agrees with state officials that keeping Millstone open has been highly important.

Without Millstone, Cheeseman said, “I think we would be using candles and burning logs in our fireplaces.’'

The future

Anticipating the day when Millstone will be retired, legislators voted overwhelmingly in 2019 for a plan that could lead to 1,000 wind turbines in federal waters off the coast of New London. The bipartisan plan would take about 10 years to reach the peak of 1,000 turbines about 40 to 60 miles off the Connecticut coastline — far beyond the pioneering turbines off Block Island.

The measure passed the state House of Representatives by a 134-10 vote as legislators said Connecticut has the precise geography and a prime location for a growing industry.

“New England is often referred to as the Saudi Arabia of off-shore wind,” Rep. Charles Ferraro of West Haven said at the time. “Connecticut is poised to be a hub of offshore wind. We have three deep water ports with no bridge obstructions. New London has gotten the majority of the attention in the media, but New Haven and Bridgeport” can also benefit.

Volatility

For decades, governors and top state officials have admitted that their power is somewhat limited in a worldwide market where energy prices are influenced by political instability in the Middle East and policies set in countries such as Saudi Arabia.

The world has changed since the state struck the 10-year deal with Millstone in 2019.

“At that time, we were not anticipating that we would be seeing high energy prices,’' Dykes said. “Prices at the time were really low. Who could have predicted a global pandemic? Who could have predicted a war in Ukraine? The precise causes of these price spikes — no one would have had a crystal ball to know, but we did say at the time that fossil fuels are traded on a global market, and they’re subject to a lot of volatile price swings.’’

House Republican leader Vincent Candelora said the upcoming savings of $10 per month to partially offset the rate hikes is “an insult’' to customers. Electricity, he said, is a highly complicated issue with no fast solutions.

“I don’t believe this issue really has to do with deregulation,’' Candelora said in an interview. “This is a supply issue, mainly, I believe. We cannot get the liquefied natural gas from Europe. The generation facilities have warned us this is a problem. ... The bottom line is we have limited ourselves to a product that is in great demand and has very little supply.’'

He added, “I don’t think if Eversource and UI were in the generation business that we would be any better off than we were previously.’'

But Candelora is not sure that offshore wind will solve the problems in the future.

“We are going to spend a lot of money on a wind project in New London that I don’t think is going to bear the fruit that we need right now,’' he said. “I think the answer is looking at more nuclear and looking at piping in natural gas into Connecticut.’'

Millstone history

The Millstone power complex has had a long history of ups and downs.

In 1997, the Millstone nuclear power complex was constantly in the headlines — and the news was always bad. The plants’ safety problems got so severe that the owner at the time, Northeast Utilities, became the whipping boy of the nuclear power industry.

At that point, all three Millstone plants were shut down under federal orders, NU was bleeding money and struggling to avoid bankruptcy. On top of that, NU pleaded guilty in 1996 to six criminal counts for willfully violating the federal Clean Water Act at several facilities, and to 19 counts for knowingly falsifying training records for employees who sought to become licensed as nuclear operators at Millstone.

Under Connecticut’s electricity deregulation law, NU was forced to auction the Millstone plants. Company officials publicly said they expected to receive only about $235 million for all three reactors, but Dominion agreed to pay the stunning price of $1.3 billion in cash — the most ever paid for a nuclear plant.

The reason the plants were sold is because Dominion and NU were going in different directions. NU’s board has decided to move completely out of the electricity generating business, while Dominion was getting in deeper.

Richmond, Va.-based Dominion operates the 870-megawatt Millstone 2 and 1,154-megawatt Millstone 3. Millstone 1, which opened in 1970, has been shut down since November 1995.

The Millstone plants have a potentially long future, depending on the economics that could change in the future. Millstone 2, which opened in 1975, is licensed until 2035. Millstone 3, which opened in 1986, is licensed until 2045. Officials said that some power plants in the South have had their licenses extended as long as 80 years, and the idea that the nuclear industry would be prematurely mothballed has been discarded.

Cheeseman, the East Lyme legislator, said Connecticut could use some luck in its favor regarding energy usage.

“I think we just have to hope we have a mild winter, and we will be fine,’' Cheeseman said. “Pray to the weather gods.’'