A bill that will lead to lower electricity prices for most Connecticut power customers is coming before the legislature. “We think this proposal will reduce rates,” Energy Co-chair Senator Paul Formica told the New London Day this week.
Under SB 106, proposed by leaders of the Energy Committee, Dominion Resources would have the opportunity to sell the power generated by the Millstone nuclear power station in Waterford directly to utility companies such as Eversource. Under current law, the power generated at Millstone is sold into the energy marketplace where it is bought and sold like a commodity before reaching homes and businesses. This system of energy market middlemen, created almost 20 years ago, adds to ratepayer costs and needs to be updated.
Connecticut has among the highest electricity prices in the nation and Governor Dannel Malloy has correctly identified the need to lower those costs as a major part of the state’s economic development efforts.
The most important part of the Energy Committee’s legislation is that it requires no subsidy from the state of Connecticut, no increase in taxes and no increase in rates. The bill guarantees lower rates by setting up an auction that would allow Millstone, owned by Dominion, to bid to supply power directly to companies that deliver electricity to consumers. It would be in Dominion’s best interest to offer the lowest price possible in such an auction. Other companies would have a similar incentive to offer the lowest price possible in an effort to win the business.
Some critics have argued that the legislation is meant to favor Dominion, but that is not the case. The legislation only gives Dominion a chance to compete to supply power by entering into a bid process. Dominion could lose if another company offers a lower price. In any case, consumers will win. If Dominion offers the lowest price, consumer rates will go down and if another supplier offers a lower bid, consumer prices will still go down.
The entire process will be overseen by Connecticut utility regulators and a winning bid will only be awarded if those officials determine it is in the best interest of Connecticut ratepayers.
It makes sense to allow Millstone to sell power directly into the market by-passing energy traders who profit from the current system, but add no value for consumers. Millstone provides 60 percent of Connecticut’s power supply and employs hundreds of people in the type of high paying jobs our economy needs. Nuclear power is carbon free and the continued operation of Millstone helps ensure that Connecticut will reach its carbon emissions goals.
When Governor Malloy unveiled Connecticut’s new energy policy at the start of his administration he said we want cheaper, more reliable and cleaner energy. This legislation meets all those goals. If approved, it is certain to lead to lower consumer prices and if Dominion is given the opportunity to sell directly to power retailers it will ensure the long term sustainability of Millstone and the continued availability of reliable, carbon free power in Connecticut.
Kevin R. Hennessy is the New England State Policy Director for Dominion Resources Inc., and can be reached by email here. Dominion Resources Inc. is included among the sponsors of this website.
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