What would happen if Millstone, the nuclear power plant run by Dominion, were to shut down?
The hearing was instigated by Dominion, whose executives told the committee that it wants an opportunity to sell its energy on the open market. Currently, in a deregulated marketplace it has to negotiate rates with power purchasers. Those power purchasers are leaning more on natural gas generators as prices remain low, which is impacting the profitability of nuclear generators across the country.
Evan Bayh, a former U.S. Senator and governor from Indiana who now co-chairs Nuclear Matters, an advocacy group for the nuclear power industry, said the closure of nuclear power stations is not a theoretical situation.
He told the committee that it’s happening in New York, Massachusetts, Wisconsin, and California.
“These are real events. Not theoretical, not hypothetical,” Bayh, who was the first of seven invited speakers, said.
He said in every jurisdiction where a plant has closed, “carbon emissions have gone up.”
The state of Connecticut has set goals to lower its carbon emissions and increase its use of renewable energy by 2025.
Katie Dykes, deputy commissioner of the Department of Energy and Environmental Protection, said they have no indication that any of the Millstone units are on the “brink of retirement.”
She said Millstone generates more than half of the electricity in Connecticut and is the largest nuclear plant in New England. She said the units are licensed to continue operating until 2035 and 2045, with options to be renewed again for 20 years.
Dykes said low natural gas prices have made recovery of costs for nuclear generators more difficult over the past few years, but she doesn’t know if Millstone is having difficulty in the market.
Trying not to take a position, Dykes said the closure of Millstone would mean an increase in electricity rates, and the state’s emissions would jump by a third.
Daniel Stoddard, senior vice president of nuclear operations for Dominion, said the drop in revenue being experienced at the nuclear plant is primarily driven by the lower price of natural gas. However, it’s unclear how much financial trouble the company is truly experiencing.
“Are you leaving?” Rep. Lonnie Reed, D-Branford, asked Stoddard.
“I do not anticipate in the short term the need to shut down Millstone,” Stoddard said. “However, the challenges exist. The challenges are significant and the trends continue to make those challenges more difficult.”
That being said, Stoddard said he doesn’t have a “crystal ball” to tell him how far and how quickly energy prices are going to drop.
He said if the trends continue and profitability decreases, then they have to make a decision.
“We cannot operate an unprofitable power station,” Stoddard said.
Reed asked Stoddard flatly what Millstone is looking for from lawmakers.
Stoddard said they just want to be able to “compete on a level playing field with other forms of generation.”
Dan Weekley, vice president of Dominion’s corporate affairs, said that doesn’t mean they’re looking for a handout or a subsidy. He said it just means they want an opportunity to compete and bid on handling Connecticut’s load.
“I’m wondering if you would give us a look at your books,” Reed said.
Weekley told Reed that if they do that, then Dominion’s competitors would also be looking to take a peek. He said they’re just asking for a chance to compete.
However, consumer advocates said they’re not impressed.
John Erlingheuser, advocacy director at AARP, said the process Dominion is asking the state to consider will require a “ratepayer bailout.”
He said they are concerned about reliability and affordability of electricity and are concerned about Connecticut’s high-priced electricity market.
Erlingheuser said what’s happening is that market conditions currently benefit the consumers and generators are looking for ratepayer bailouts.
Tom Swan, executive director of the Connecticut Citizens Action Group, said he doesn’t understand why they are having an informational forum. He said until Dominion opens its books and exhibits a need, then he sees no reason for them to be “a part of a nationwide shakedown by the nuclear industry.”
Swan equated the situation to a scenario “where you give me all your money, or I’m going to shoot myself.”
Bayh and Dominion officials met with Gov. Dannel P. Malloy before Thursday’s hearing. Malloy declined to comment earlier in a day about the situation.