Dominion Close To Winning Opportunity to Bid
HARTFORD, CT — Although they’re still waiting for the financial information requested from Dominion Energy last August, two state agencies have completed a draft report concluding that the Millstone Nuclear Plant should be able to bid on energy contracts.
According to the draft report from the two agencies
— the Department of Energy and Environmental Protection (DEEP) and the Public Utility Regulatory Authority (PURA) — Dominion Energy would be able to bid into the electricity market, which is designed to favor the least costly energy technology. That means nuclear would be competing with renewable energy sources like wind and solar, which are also zero carbon emission technologies, but with much higher price tags.
Dominion has argued that it needs to be able to bid on the electricity contracts because without them they will have to retire the Millstone plant in Waterford. However, Dominion has yet to hand over the audited financial information regulators requested in order to prove that they’ll need to retire the plant.
Katie Dykes, chair of the PURA, said Dominion could still come forward with the financial information regulators are seeking, or they could choose not to disclose any additional financial data in their bid, and as such their bid would be scored accordingly. She said regulators would take into consideration price and the value of the plant to the region.
The report, which generated more than 500 comments from stakeholders and other interested parties, would seem to be a win for Dominion Energy.
“The final appraisal is clear,” said Paul Koonce, CEO of Dominion’s Power Generation Group. “Millstone is vital for Connecticut to meet its cheaper, cleaner and more reliable energy goals and aggressive carbon goals.”
The report details how Millstone is a resource for the region and at the same time it concludes that “the Millstone units are profitable through 2035 under multiple scenarios.”
Regulators hired Levitan & Associates as a consultant to model financial information that’s publicly available. Levitan & Associates estimated that Millstone has a value of $2.3 billion annually and recent tax law changes have likely improved the profitability of the company, according to the report.
At the same time, “Dominion’s late-filed, unsubstantiated, summary data (submitted under protective order) suggests that the generating facility’s profitability is low,” the report states. “Lack of access to audited operational data and costs caused by Dominion’s incomplete response to the data requests in this proceeding creates uncertainty in the state’s assessment of the financial viability of Millstone Nuclear Units. Dominion’s unknown return requirements and expectations on return on investment could lead to an unanticipated retirement decision.”
But the plant is an important resource for the region.
“The retirement of Millstone’s 2,200 MW facility would not trigger the need for new capacity in Connecticut specifically, but it would cause the New England region as a whole to need new generation capacity,” the report states. “Replacement capacity procured through the ISO New England market would likely be natural gas-fired, exacerbating security and system reliability issues due to the region’s over dependence on natural gas.”
A coalition of mostly natural gas companies isn’t buying Dominion’s threat to retire the plant or its assertion that it is not profitable.
David Gaier, a senior director of communications for coalition member NRG East Region, said they still haven’t “seen any persuasive evidence that Millstone needs a handout in the form of an above-market contract — one that will directly harm Connecticut ratepayers.”
The coalition, which calls itself “Stop the Millstone Payout,” said allowing nuclear into this type of competitive market would essentially eliminate the competition.
Millstone officials have said it needs the ability to sell its power directly to consumers to cut out the hedge funds that trade it as a commodity. They argue they will be able to offer better prices to consumers through the bidding process.
Earlier this month, ISO New England, the regional grid administrator, released a fuel security study that predicts the region would experience rolling blackouts if Millstone were unavailable in future winters.
“Millstone provides over half the power for Connecticut on a daily basis,” Sen. Paul Formica, R-East Lyme, said Monday. “Ensuring Millstone’s stability while we work toward building a future system that includes more renewable energy resources is needed to preserve reliability and affordability. As we have seen in recent weeks, the state does not have the capacity to rely on natural gas especially during cold winters when natural gas prices surge.”
Formica said Millstone contributes nearly $1.5 billion annually to Connecticut’s economy and is a vital resource for the region.
A final report is due Feb. 1 and regulators are accepting comments on the report until Thursday, Jan. 25, 2018.