Formica: “We’re working like crazy” – Millstone Bill Still Up for Debate [Courant]

June 6, 2017

Article as it appeared in the Hartford Courant

The corporate owner of Millstone said Monday it will reconsider keeping the Waterford nuclear plant open or making other unspecified changes if the legislature fails to back a measure broadening its access to electricity markets.

With a Wednesday deadline looming for the end of the 2017 session of the General Assembly, lawmakers have yet to debate legislation in the Senate or House that Millstone parent company, Dominion Energy Inc., has lobbied hard to pass. A similar measure failed at the end of last year’s legislative session.

“Regrettably, if Connecticut chooses not to act, we will begin a strategic reassessment of our plans for Millstone Power Station,” Dominion spokesman Kevin Hennessy said.

The Richmond, Va.-based energy company alluded to Connecticut’s loss of the headquarters of General Electric Co., which left Fairfield for Boston, and the impending departure of the Hartford headquarters of Aetna Inc., which announced last week it’s negotiating with other states to relocate.

“It would be surprising and a missed opportunity for Connecticut not to reduce the highest electric rates in the continental United States, meet its long-term carbon goals and ensure the sustainability of a major employer this year given recent events,” Hennessy said.

“We remain committed to finding a long-term solution that benefits the people of Connecticut, but we also must be fiscally responsible with our investments,” he said.

The legislature’s energy and technology committee approved the legislation in March. But several lawmakers criticized Dominion for refusing to prove it needs special attention from the legislature by opening its books.

Dominion said it should not be held to a standard different from other companies that benefit from legislation.

The Millstone legislation has become the most contentious energy bill in the legislature this year. A coalition of non-nuclear power generators, environmentalists and consumer activists lobbied against the measure, accusing Dominion of seeking a “corporate payout.”

Dominion countered by saying the bill authorizes it to bid for state power contracts on an equal footing with other generators. Millstone would be able to reduce prices by selling directly to energy retailers rather than on hedge fund markets that create no value for consumers and instead drive up prices, Dominion says.

The rise of abundant and relatively cheap natural gas has put plants like Millstone at a severe economic disadvantage. Several plants in the U.S. have closed, with Exelon announcing last week it will shut its Three Mile Island plant in 2019 unless Pennsylvania state officials include nuclear power in alternative-energy goals.

House Speaker Joe Aresimowicz said Monday that legislation favored by Dominion “doesn’t look good right now, but there’s three days left and anything can happen.”

He said he’s not convinced that Millstone would be irreparably harmed by the legislature’s failure to act. “I don’t know that it’s a pressing problem if we don’t act in the next six months,” he said.

House Majority Leader Matt Ritter said Monday a shutdown of Millstone is not imminent.

“They’re not closing tomorrow. They’re not closing next year,” the Hartford Democrat said.

Andy Pusateri, an analyst with Edward Jones, said Dominion ultimately wants to keep Millstone open and suggested it raised the possibility of shutting the plant as perhaps a “negotiating tactic.”

“At the end of day if they don’t see them as cost-effective or the legislature doesn’t do what it takes to make them profitable, they’ll retire them,” he said.

Thedilemma faced by policymakers and the industry is that gas prices are projected to stay low, making it hard for nuclear plants to compete, Pusateri said. But as natural gas prices climb, nuclear power may be back in demand, he said.

The stakes are high for the state’s economy, particularly in southeast Connecticut where the Millstone nuclear plant operates. A study commissioned in October by Dominion said Millstone generates $1.47 billion in annual economic impact and employs more than 1,000 workers. It accounts for 59 percent of the power consumed by Connecticut utility customers, Dominion said.

Three nuclear plants operate in New England: Millstone, Pilgrim in Massachusetts and Seabrook in New Hampshire. Nuclear power accounted for 30 percent of energy generated in the region in 2015, down from 34 percent the previous year, according to ISO-New England.

Vermont Yankee retired in 2014 and Pilgrim is set to close in 2019.

A spokeswoman for ISO-New England would not comment on what the region’s grid operator would do if Millstone shuts.

Rep. Lonnie Reed, the House chairwoman of the energy and technology committee, said failure to pass the bill could lead to another hit to Connecticut’s economy.

“Here, we’re supposed to be sending the message, ‘We’re business-friendly,'” said Reed, D-Branford.

Sen. Paul Formica, the Senate co-chairman of the committee, said supporters of the legislation feared a Millstone shutdown was “in the works all along.”

 “We’re working like crazy to get something,” said Formica, R-East Lyme. “We feel really confident we can get something out before Wednesday.”