Legislationto support Connecticut's sole nuclear plant in an era of low energy prices hasadvanced in the state Legislature, but opponents claim lawmakers are keepingthe public in the dark.
Connecticut'sSenate on April 29 unanimously passed Senate Bill 344 to allow 's plant near NewLondon, Conn., to bid for long-term, power purchase agreements for up to 10years as a means of meeting the state's energy and environmental goals andensuring reliability. The bill would leave the state commissioner of energy andenvironmental protection, the state attorney general, and the consumer counsel theauthority to approve contract bids if it is in the interest of ratepayers.
Dominionspokesman Ken Holt praised the bill as a "forward looking" initiativethat will mitigate the growing risk of New England ratepayers becoming overlydependent on natural gas by enabling the roughly 2,151-MW Millstone plant tocompetitively bid into contracts. Holt stressed the proposed contracts are farfrom subsidies and will deliver carbon-free electricity at low rates forconsumers.
Holtsaid Millstone nuclear plant, which supplies roughly 50% of electricity inConnecticut, is still economically in a "good position" but thereality is that all nuclear plants in New England are facing downward pricepressure in the energy market as a result of low natural gas prices. Already,under these economic pressures, VermontYankee in Vermont was shut down in December 2014 and in Massachusetts isscheduled to retire in 2019.
"Asmore non-natural gas generators are driven out of the market then the potentialdownside of a change in natural gas price becomes much more onerous for theratepayers," Holt said. "If natural gas prices start to go up, nowthat's where you are getting all of your electricity from, then that is goingto drive rates up."
Policyand financial research firm Washington Analysis LLC expects Connecticutlawmakers to pass S.B. 344 following the weighing in on power plant "subsidies"by the Supreme Court and FERC. In a research note, analysts Rob Rains and TimVandenBerg said the bill at "first blush" resembles "incentivestructures" rejected by federal courts in Maryland and New Jersey, and theyexpect litigation from competing generators such as , , , and possiblyNextEra Energy Inc.,if the bill is seen as violating ISONew England Inc.'s price-setting rules. Furthermore, the note viewsthe bill's provision to allow electric distribution companies the option tosell power into ISO-NE as "negative for the program's ultimate survival,should this be challenged in court."
Dynegyspokesman David Onufer said in an interview that a bill of this magnitude hasthe potential to cost consumers, especially as it is not needed. "Millstoneis committed to operating through the next decade," he said. "There'sno urgency to act at the moment. We feel the Senate passed this bill hastilywithout any public hearings or debates."
S.B.344 has also received flak from renewable supporters including EnvironmentConnecticut, whose state director Chris Phelps decried it as a "terribledeal" for ratepayers.
"Thereshould absolutely be a discussion of what Connecticut and New England's energyvision should be for the next decade and beyond," Phelps said. "Theregion should be planning to shift to far greater reliance on zero-carbonrenewables. But that debate should happen in the light of day, not in a backroom open only to a handful of lobbyists paid handsomely by the nuclearindustry."