Power Producers Oppose Legislation Helping Millstone Nuclear Plant
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Millstone Nuclear Legislation faces opposition from Calpine, Dynegy, NRG, and EPSA, as Connecticut debates market access, ratepayer impacts, renewable and low-carbon procurement, and Dominion transparency amid low natural gas and power prices.
The Important Points
A Connecticut plan to expand Millstone's market access while balancing ratepayer costs, competition and low carbon goals.
Guarantees market access via low-carbon procurement process
Raises concerns over rates, competition, and transparency
Positions nuclear alongside renewables in Connecticut policy
Power producers are set to announce Tuesday their opposition to legislation that would guarantee markets for the Millstone nuclear plant, calling it special treatment for one energy source in Connecticut.
Legislation has yet to be drafted, but it could follow a measure that failed last year, proposing to boost Millstone's access to electricity markets amid a broader market overhaul in Connecticut that lawmakers are weighing.
Calpine Corp., Dynegy, NRG Energy and the Electric Power Supply Association say state assistance to Millstone could drive up energy costs for businesses and residents, echoing arguments that in deregulated electricity markets subsidies are unnecessary and distortive, the companies and trade association say the legislature should require Dominion Resources Inc., Millstone's parent company, to make public its financial records to prove it needs a change in state law.
"This legislation would carve out a significant part of the market in the region for one company under different terms than anything we could hope for," said John E. Shelk, president and chief executive officer of the Electric Power Supply Association.
Thomas F. Farrell II, chief executive officer of Dominion, told investor analysts on a conference call to discuss fourth-quarter earnings last week that power prices have been "under some pressure."
Referring to the possibility of favorable legislation, Dominion is "hopeful that things will improve there," he said.
Shelk said Farrell's comment is an admission that "this is all about the drag Millstone is having on the corporate parent."
"The Connecticut legislature has proposed a competitive process to reduce retail electric rates, and amid debates like ACORE's FERC filing on subsidy proposals state energy officials would determine whether it is in ratepayers' best interests," Dominion spokesman Kevin Hennessy said.
Several nuclear plants around the country, unable to compete with low natural gas prices, have shut, even as New England weighs transmission proposals like the Maine-Quebec transmission line to access lower-carbon power options.
"There was a trend and a very distressing trend," Reed, D-Branford, said at a public hearing last month.
The plan that failed last year would have allowed nuclear energy to participate in a competitive purchase of renewable or low-carbon electric power, including contentious imports such as the Northern Pass hydropower project that has stirred debate, in a process administered by the state. If Millstone were to be selected, it would be guaranteed a market as natural gas prices decline.
Dan Weekley, vice president of corporate affairs at Dominion, rejected a proposal that the company's financial records be opened for public inspection, saying any information would be irrelevant.
"What is in the customers' and the ultimate ratepayers' best interests?" he asked at the public hearing. "What is the best price for consumers?"
AARP Connecticut said it also will oppose Millstone legislation. A legislative proposal could reclassify power generated by the plant as renewable fuel, allowing Dominion to undercut the cost of other renewable fuels and receive a higher price for its power, AARP said.
