Millstone Weighs Options as Opposition to Financial Aid Continues

Groups opposed to financial relief for Connecticut’s 2,111-MW Millstone Nuclear Power Station continue to press their case against subsidies for the plant as state lawmakers prepare for a special session to prepare a state budget for the new fiscal year, which begins July 1.

The regular 2017 legislative session ended June 7. Dominion Energy in early June said it would begin a “strategic reassessment” of its plans for the Millstone plant after S.B. 106, which would have allowed Dominion to bid for state energy contracts reserved for renewables, failed to pass in the state’s House of Representatives. Dominion has never specifically said it would close Millstone, which is the largest electric power generating station in New England and one of three nuclear plants in the region, along with Pilgrim in Boston – slated for closure in 2019 – and Seabrook in New Hampshire.

Some state lawmakers have said they may look for an opportunity to revive the financial aid legislation during the special session. Stop The Millstone Payout, a coalition of consumer and environmental groups that also includes some other power plant operators, on June 26 released a letter that the group says bolsters its argument against the legislation. The group says Millstone does not need financial support, citing a Massachusetts Institute of Technology (MIT) study that says Millstone is the nation’s most-profitable nuclear power plant.

The June 23 letter from Vamsi Chadalavada, chief operating officer for regional electric grid operator ISO-New England, to Thomas Wohlfarth, Dominion Energy’s senior vice president for regulatory affairs, says in part that Millstone must supply power for the regional grid through May 31, 2021. The opposition group says the letter shows Dominion can’t close Millstone prior to that date even absent subsidies.

Dominion Energy's Millstone nuclear station in Waterford, Connecticut, is at the center of a fight in the state legislature about a bid process for state energy contracts. Courtesy: Dominion

Dominion Energy’s Millstone nuclear station in Waterford, Connecticut, is at the center of a fight in the state legislature about a bid process for state energy contracts. Courtesy: Dominion

“Even if it did fall on hard times, Millstone would be able to seek financial relief through the existing process as managed by the ISO-New England, instead of demanding a special legislative payout from Connecticut ratepayers based on unsupported threats of closure,” Matt Fossen, a spokesman for Stop The Millstone Payout, said in a statement.

A spokeswoman for ISO-New England, along with a Dominion spokesman, in separate statements said the group is misinterpreting the letter. Dominion spokesman Ken Holt said in a statement that while the utility has “an obligation to operate until that date in 2021 … we also have the ability to transfer that obligation. The letter also says that ISO-New England has said it does not have the authority to prevent a resource from being retired.”

ISO-New England spokeswoman Ellen Foley in her statement said the grid operator’s structure allows that “Dominion, or any resource owner, can trade out of its obligations to provide capacity for the relevant commitment periods. [It can be done] either in reconfiguration auctions or directly with another company through a bilateral agreement that can cover the obligation.”

Foley said that if Dominion wanted either of those options, “it would trigger an ISO-New England reliability review to ensure such an arrangement does not result in the violation of any reliability standards.” Foley said reconfiguration auctions are held both monthly and annually and are used regularly “by resources that either need to cover their obligation or want to sell their obligation.”

Foley earlier this year said ISO-New England “cannot prevent a plant from retiring. We do not have the authority to order them to stay online.”

Dominion currently sells Millstone’s power output in long-term bilateral agreements to hedge funds and other financial institutions. The utility has said that in order for Connecticut to secure low-cost, long-term power resources that meet both environmental and economic goals, the bid process for contracts must be expanded to include nuclear power.

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