A bill designed as a “safety net” for the nuclear energy industry sailed through the state Senate late Friday — just five minutes after it was posted online and a month after the industry signaled that it was struggling.
Sen. Paul Doyle, who co-chairs the Energy and Technology Committee, said Millstone Nuclear Power Station, like other nuclear plants, is struggling to compete in a changing energy market.
The financial situation of Dominion Energy, the company that owns the two nuclear reactors at Millstone in Waterford, is unclear because the publicly-traded company sent “mixed signals” at an informational hearing in March.
However, it worried committee co-chairs Doyle and Rep. Lonnie Reed enough to take action and raise a bill that didn’t go through the traditional legislative process.
Doyle said there was no threat made that Millstone would close, but they started raising concerns and this legislation seeks to help them compete by giving them the power to bid on long-term energy contracts against other forms of energy such as solar, wind, hydroelectric, and trash-to-energy facilities.
The legislation, which still needs to pass the House, “is not a direct subsidy,” Doyle said. “It’s giving them an opportunity to bid in a process.”
The authority to bid on the contracts will be left up to the commissioner of the Department of Energy and Environmental Protection, Rob Klee, who will have to decide if it’s in the best interest of the ratepayers to allow Dominion to bid. Doyle said they could bid in half their capacity into these long-term contracts, but it has to be in the best interest of the ratepayers.
“It can’t be a dog for us,” Doyle said.
Doyle said he understands Millstone’s competitors are upset by the legislation, since nuclear energy made huge profits about five years ago, “but we can’t lose them.”
Jim Ginnetti, who represents Dynergy, the second largest electricity generator in Connecticut, said the bill was not vetted and is bad for ratepayers. He said Dominion will still be able to place higher bids into the marketplace that they could win because their costs are lower than some of the renewables in the electricity market.
“You can’t give Dominion more money and not have it come out of the pocket of ratepayers,” Ginnetti said.
But Kevin Hennessy, director of government affairs for Dominion, said it’s good for ratepayers.
“It gives us the opportunity to compete,” Hennessy said. “And the more competition, the better the costs.”
But Ginnetti said since Millstone is far larger than all of the other zero emitting energy sources it will result in the state accepting whatever amount Millstone proposes.
Doyle said if Millstone shuts down tomorrow, then the state would need three more natural gas power plants like the one recently opened in Oxford in order to make up for the capacity provided by Millstone. Doyle pointed out that the diversity of energy sources is also important because if the state relied solely upon natural gas, then at some point prices would skyrocket.
Katie Dykes, deputy DEEP commissioner, told lawmakers in March that 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. However, if Millstone were to close, she said the state’s emissions would jump by a third.
The measure passed by the Senate on Friday did not follow the typical legislative process and did not have a public hearing or pass through committee. Many Senators didn’t even have a chance to review the legislation Friday before it was called for a vote.
Chris Phelps of Environment Connecticut said the legislation is “clearly targeted at propping up nuclear power plants.”
“Where is the emergency? What’s the rush?” Phelps said.
He said the legislation hasn’t been vetted and there’s a real risk to ratepayers who already subsidized the transition to a deregulated marketplace where generators are no longer able to sell electricity.
Doyle and Reed spent several days working on the legislation behind closed-doors.
Reed, who initially said they weren’t planning on introducing legislation to help Dominion, said Saturday that after they met with ISO New England they learned the state was the only entity that could help. She said ISO New England, the regional electrical grid, can help them shut down, but once they’re gone, they’re gone. She said the loss would increase the state’s emissions.
“We had to do something,” Reed said.
She said nuclear plants are closing in New England and ISO New England didn’t have a backup plan. She said Millstone is the largest of the nuclear plants in New England.
The bill’s fate in the House is unclear at this point.