Dominion Brokers 10-Year Deal to Keep Millstone Nuclear Plant Open

Connecticut Gov. Ned Lamont on April 15 announced the Millstone Nuclear Power Station will stay open for at least another decade, thanks to a deal between Dominion, the plant’s owner, and utilities Eversource and United Illuminating, a subsidiary of Avangrid.

Millstone, like other U.S. nuclear power plants, has been challenged by rising operating costs and competition from other power sources in recent years, primarily natural gas-fired generation. Virginia-based Dominion had threatened to close Millstone, a 2,088-MW plant with two reactors that entered service in 1975 and 1986, respectively, with company officials saying the plant was no longer economic to operate.

Entergy closed the Vermont Yankee nuclear plant at the end of 2014. The Pilgrim Nuclear Generating Station in Plymouth, Massachusetts, is scheduled to close this year.

“We had to make a deal, and we made a good deal,” Lamont said at a ceremony announcing details of the Millstone agreement, which was first announced in mid-March. “We made a good deal that was good for the ratepayers, good for the future of the state of Connecticut, good for the environment, and good for stability of this region going forward.”

“Today, we’re really celebrating a Millstone milestone,” said Katie Dykes, a commissioner with the state’s Department of Energy and Environmental Protection (DEEP), after Monday’s announcement.

Lawmakers Part of Effort to Save Plant

State lawmakers were part of a bipartisan effort to save the plant, led by Paul Formica, a Republican state senator, who said Monday he was “extremely proud and very relieved” that a deal got done. Dominion for three years has worked with Connecticut regulators and lawmakers to find a way to keep Millstone in service.

“We all know nuclear plants have been challenged … forcing many states into economic and energy supply chaos,” Formica said. “We were determined to avoid that scenario.” Formica said Connecticut and the New England region should not rely only on natural gas for its baseload power.

The state’s Public Utilities Regulatory Authority must still approve the agreement, which was reached after Dominion won a bid for zero-carbon energy in December 2018 from DEEP. The agency supported a 10-year bid for zero-carbon power from Dominion, about half of Millstone’s output, but the price of the electricity still had to be negotiated with the utilities.

Interestingly, officials said Dominion’s threat to close Millstone was a reason the company was allowed to participate in the Connecticut auction for carbon-free energy contracts, as the state sought ways to keep the plant open. Millstone employs about 1,500 workers.

Plant Supplies About Half of State’s Power

The Millstone station produces about half the electricity in Connecticut. Analysts have said it also accounts for 98% of the state’s carbon-free power, and its operation is seen as key for the state to meet its carbon reduction goals.

Tom Farrell, president and CEO of Dominion Energy, said the deal represents a “very, very creative solution to a very difficult problem.”

Millstone’s fate—the plant is an important facility for the New England power grid—was a topic of discussion at a meeting of the region’s governors in Washington, D.C., earlier this year. Dominion prior to this deal had said it would operate the plant at least for the next three years, with talk of retiring the reactors in 2023 when its current contracts expire. There also was a discussion of Dominion buying out those contracts if that made more economic sense than keeping Millstone open.

ISO New England, the regional transmission organization (RTO) that oversees the grid for six states, including Connecticut, recently said it is working on “market enhancements” that would help compensate power plant owners, in an effort to keep more facilities operating. The RTO recently staved off Exelon’s threat to shut down its Mystic power plant in Everett, Massachusetts, saying it wanted to keep Mystic’s liquefied gas-fired turbines online. The Mystic plant supports the nearby Everett liquefied natural gas import facility.

In that deal, approved by the Federal Energy Regulatory Commission in December 2018, Exelon could bank up to $200 million in payments from New England ratepayers annually over a two-year period ending in June 2024.

Lamont on Monday said keeping Millstone open “gives us a lot of energy stability, holds down price, and it means 1,500 good-paying jobs that are not going anywhere.” The governor also Monday noted his support of renewable energy in the state, including an offshore wind project, and said, “this part of the state is going to be the hub of green power for the next generation and going forward. It starts right here at Millstone.”

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).