Dominion Energy has reached an agreement with utilities in Connecticut to keep the Millstone Power Station, the state’s only nuclear power plant, in service for at least another decade.
Dominion announced the deal March 15, the deadline the company had to tell ISO New England, the regional grid operator, whether it would retire the two reactors at the 2,088-MW plant.
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.
“This is a huge win for Connecticut, the region, and our colleagues at Millstone,” Paul Koonce, president and chief executive of Dominion’s Power Generation Group, said in a statement. “Not only does this preserve the vast majority of Connecticut’s carbon-free electricity, it preserves good jobs for the 1,500 women and men who work at Millstone and keeps 4,000 other residents employed.”
Dominion, headquartered in Richmond, Virginia, has for years said that the Millstone station is no longer economic to operate. The plant’s reactors entered service in 1975 and 1986, respectively.
Power prices in New England have fallen in recent years due to more gas-fired power generation, and an increase in renewable resources.
Dominion for three years has worked with Connecticut regulators and lawmakers to find a way to keep Millstone in service. The state in December of last year selected Millstone for a contract to purchase a little more than half the plant’s electricity for 10 years. That contract, though, did not have a firm price, and Dominion continued negotiating with state officlals and two local utilities that are units of Eversource Energy and Avangrid Inc.
Dominion in its statement said the agreement would support its move toward a more regulated and long-term contracted earnings profile, along with reducing its business risk. The company said the contract represents a “modest financial uplift,” which results in expected operating earnings-per-share levels that are within its existing guidance for 2019 and beyond.
For more background on the Millstone plant, read these previous POWER articles: