DEEP paves way for Millstone's power bid

PHOTO | HBJfile Millstone Power Station in Waterford.

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By Matt Pilon

A potential hiccup in controversial competition for long-term electricity contracts that involves Connecticut’s sole nuclear power plant appears to have been averted, after state regulators tweaked the terms of its bidding process.

The Department of Energy and Environmental Protection (DEEP) on Tuesday night released a final version of its request for proposals for “zero carbon” electricity, which could include nuclear, as well as solar, wind, hydropower and energy storage.

Millstone Power Station has been pursuing the state’s blessing to sell its electricity to utilities -- similar to the way the state uses the
contracts to spur investment in solar energy and other technology -- since at least last year, when plant owner Dominion warned lawmakers and regulators that its Waterford plant could be at risk of closing.

The company has had successes along the way, despite fierce opposition from fossil fuel plants and environmental groups who characterize the contracts as an unneeded handout.

Last fall, lawmakers authorized DEEP to conduct the RFP, and to move forward with the contracting process if the agency deems any bids to be in ratepayers’ best interests.

However, as part of the bidding process, which is largely based on price, Millstone would get favorable treatment if it’s deemed to be at risk.

After DEEP released a draft version of the RFP in June, Dominion said the language may delay it from winning at-risk status until 2023. The final version of the document released this week instead specifies 2022, though an at-risk designation could come sooner if regulators are convinced Millstone’s financial condition puts it at risk of closure.

Sen. Paul Formica (R-East Lyme) said Wednesday that he was pleased DEEP modified the RFP language, after listening to Dominion’s concerns.

“This revised RFP will allow Dominion, owner of Millstone Power Station, an opportunity to prove to regulators their at risk status,” Formica said.

Financial transparency

A key controversy in Dominion’s lobbying for access to long-term energy contracts was the energy giant’s unwillingness to share full financial information about the Millstone plant with regulators for some time.

Dominion has since privately shared the financial information, Paul Koonce, CEO of Dominion’s power generation group, noted in a letter last month to DEEP and the Public Utilities Regulatory Authority.

“With this information in hand, both agencies have strong, independently audited evidence that Millstone is at risk now,” Koonce wrote in the July 18 letter, italicizing the final word in the sentence.

If Millstone is successful and regulators find its proposal favorable, it could sell as much as 12 million megawatt hours of electricity a year to Connecticut utilities through state-approved contracts. That equates to roughly 70 percent of the plant’s 2015 output.

Utilities’ costs are ultimately passed on to their customers. Dominion has argued that awarding it electricity contracts would save ratepayers money, but opponents of the deal have argued the opposite.

According to a timeline in the RFP document, DEEP could announce winning selections by this winter.

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Millstone wins “at risk” status