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Fight Over Millstone Continues

by | Jun 27, 2017 4:30am () Comments | Commenting has expired | Share
Posted to: Energy, Environment, Waterford

ctnewsjunkie file photo HARTFORD, CT — They might have lost the battle to get their bill passed before the end of the regular legislative session, but Dominion Energy continues to press forward with its attempt to win support for an opportunity to bid on energy contracts.

The company, which currently operates the Millstone Nuclear Plant in Waterford, hinted that it’s willing to walk away from the plant, which generates more than half of the electricity in Connecticut, because it says it’s struggling like most nuclear facilities to compete with the price of natural gas.

Dominion Energy wrote ISO New England, the nonprofit entity responsible for keeping electricity flowing in six New England states, on June 13 to confirm its understanding of its options to close the facility or transfer ownership. It also wanted to know what type of authority it had retire the plant.

“Regardless of the outcome of the reliability study, the ISO does not have the authority to prevent a resource from retiring,” Vamsi Chadalavada, executive vice president and CEO of ISO New England told Dominion Energy in a June 23 letter.

Chadalavada tells Dominion that the Millstone plant is obligated to supply electricity to the grid through May 31, 2021. However, “while the plant is obligated to be available to the ISO during this time, Dominion has the option to seek to transfer these obligations through bilateral agreements or through demand bids.”

Chadalavada’s letter lays out several options for Dominion including transferring the operation of the facility to another company.

It also describes what would happen if Dominion wants to retire the generator.

“Should Dominion seek to shed its forward obligations and ultimately retire Millstone Station, it must do so in accordance with the requirements for retirement de-list bids under the ISO Tariff,” Chadalavada wrote.

Essentially that means Dominion can pay a hefty penalty if it decides to retire the nuclear plant early. But no matter what happens it must wait until next March for an opportunity to de-list the facility through the ISO New England bidding process.

The nuclear units are licensed to continue operating until 2035 and 2045, with options to be renewed again for 20 years.

A coalition of mostly natural gas fired plants, which have teamed up to call themselves the Stop the Millstone Payout coalition, said these statements affirm previous claims by the group that Millstone is not at risk of imminent closure. Moreover, the ISO’s letter publicly confirms that there are other opportunities in place to provide assistance to plants needed for reliability that can demonstrate they are in actual financial distress.

“The evidence is clear: Millstone is the most profitable nuclear plant in the country and is not shutting down anytime soon,” Matt Fossen, a spokesman for the coalition, said. “Even if it did fall on hard times, Millstone would be able to seek financial relief through the existing process as managed by the ISO-New England, instead of demanding a special legislative payout from Connecticut ratepayers based on unsupported threats of closure.”

Fossen said there’s nothing new in these letters.

“The fact of the matter is that there’s nothing new to say about Millstone,” Fossen said. “We’ve known for months that Millstone doesn’t need a special deal, that such a deal would raise rates, and that concerns over the plant’s future are unfounded. We hope that lawmakers will recall these facts, and further hope ISO’s letter will put an end to this prolonged saga.”

Thomas Wohlfarth, senior vice president of regulator affairs at Dominion Energy, said it would continue to “vigorously pursue legislative options,” but made it clear that its “due diligence for our shareholders requires we undertake this strategic review.”

Both sides are using the letter from ISO New England to make their arguments to lawmakers who are focused on finding enough support to pass a two-year budget.

Language regarding Millstone could find its way into one of what is likely to be hundreds of pages of budget implementation language, none of which has been written yet. Legislation that would have allowed the Department of Energy and Environmental Protection move forward with bidding if the market conditions changed passed the Senate, but never passed the House.

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