Millstone race against renewables clears hurdle

Waterford plant to compete with hydro, solar, wind power in auction

“From the 1,500 people employed here to the carbon-free, roundthe-clock electricity to the $1.5 billion annual impact on Connecticut’s economy, Millstone provides tremendous benefits to the state.” KEN HOLT, MILLSTONE SPOKESMAN

Waterford — Regulators’ recommendation to allow Millstone Power Station to compete with renewables in a state auction cleared another hurdle this week, as lawmakers chose not to reject the proposal.

After a monthslong review, the Department of Energy and Environmental Protection and Public Utilities Regulatory Authority on Feb. 1 recommended letting nuclear power compete with hydropower, solar and wind producers in a state-run bidding process.

DEEP expects to begin the amended bidding process, pitting new and existing zero-carbon resources against one another in competition for fixed-price contracts with state-regulated utilities like Eversource Energy and United Illuminating, by May 1.

Lawmakers had until March 1 to block the DEEP-PURA recommendations, but no push against the plan materialized.

“I think in the end everyone realized how very important keeping Millstone here was, not only for us right here in the community, but in the entire state,” state Rep. Kathleen McCarty, R-Waterford, said Friday.

Millstone owner Dominion Energy had pushed for the change for the last few years, saying the plant has suffered along with much of the

nuclear industry as it grapples with high operational costs and competition from cheap natural gas in the current wholesale market.

DEEP’s and PURA’s analysis showed the plant will remain profitable for many years in the wholesale market. But regulators still decided to include nuclear in its state auction with renewables, saying the potential threat of a Millstone closure would prove too costly to ratepayers, the environment and state and local economies.

“The importance of Millstone Power Station to the state of Connecticut is well understood by our legislators,” plant spokesman Ken Holt said Friday. “From the 1,500 people employed here to the carbon-free, round-the-clock electricity to the $1.5 billion annual impact on Connecticut’s economy, Millstone provides tremendous benefits to the state.”

Whether DEEP deems Millstone a resource “at risk” of termination — a designation that could give the plant’s bids an edge, according to regulators — remains to be seen.

When evaluating bids, DEEP potentially could give added weight to benefits like fuel diversity, grid reliability and greenhouse gas avoidance provided by energy generators like Millstone, but only if those generators can prove they’re at risk of retirement.

If resources do not prove they are at risk, DEEP will only factor their bid price during the procurement process.

“DEEP is making steady progress on the request for proposals,” DEEP spokesman Chris Collibee said Friday.

Holt said Millstone looked forward “to submitting our bid during the procurement process and helping the state achieve their goals of cleaner, cheaper, more reliable electricity.”

After months of calls to open its books, Dominion released to regulators confidential financial data it says shows Millstone suffers from higher-than-normal operating costs.

Many Dominion competitors and environmental and advocacy groups fought against the proposed bidding process, arguing publicly available data shows Millstone is not in danger of premature closure. Some described the bidding process as a subsidy or handout, while environmentalists pushed for greater investment in newer technologies and renewables.

But almost 60 General Assembly members wrote in support of Millstone in January.

Dominion consistently has argued the bidding process could lead to lower electricity rates, because hedge funds currently buy much of Millstone’s electricity on the wholesale market and hike prices for consumers.

Competitors like NRG say that characterization is misleading, arguing Dominion chooses to sell its power to hedge funds to provide greater revenue certainty.

Lawmakers paved the way for the bidding process in a bill signed by Gov. Dannel Malloy in October. Malloy called for the review by DEEP and PURA in an executive order last July.