In his Op Ed piece on March 3rd, Kevin Hennessy (director of state policy for Dominion) claims Dominion is not asking for any subsidies from the state of Connecticut, its taxpayers, or ratepayers. This is simply not the case.
The legislation introduced in the final days of the 2016 session would have raised energy prices for all Connecticut consumers, not lower them. Similar legislation, Senate Bill No. 106, is being pursued again in 2017. I do agree with Mr. Hennessy that this legislation is all about the rates. This bill, however, would raise rates, not lower them as he claims.
The legislation would create a process that guarantees a higher price for the electricity Dominion currently sells on the New England wholesale competitive market. Those added costs will be passed along to Connecticut ratepayers only. Dominion does not need a special deal from the state; the company can currently sell electricity to the electric distribution companies (Eversource & United Illuminating) directly. AARP would support those contracts if they were on a cost-of-service basis, meaning Dominion would be paid expenses and a reasonable rate of return, which would be determined by regulators. Dominion, however, wants special treatment without having to disclose the losses they claim to be experiencing to the ratepayers or regulators.
The new process that Dominion has requested would treat them as a renewable power — such as wind and solar energy — and let them “compete” for standard offer service contracts. Currently Connecticut requires that the standard service generation offer be composed of a certain percentage of renewable power, which is knowingly more costly. The state’s policy goal is to increase the growth of newer, cleaner technologies and eventually lower their costs. Nuclear meets neither of these criteria.
Millstone represents about 50 percent of the power generated in Connecticut. They will inevitably offer the lowest price in any “competition” with the smaller and more costly true renewable generators. This will raise the overall cost of the power generated at Millstone and those expenses will be passed along to Connecticut ratepayers.
While it is true that this process will be overseen by multiple state regulators, it will still be a net increase in costs for consumers. Those state regulators will have to determine, based on the costs of more expensive renewable power, that the nuclear power option would benefit ratepayers. If those same regulators had to base it on the existing regional competitive market for all power types, where nuclear is one of the cheapest forms of generation, the outcome would be much different. It does not take a lot to see that someone will have to pay the difference if Dominion gets paid more than they do now. This difference is a subsidy and would be born on the backs of all ratepayers in Connecticut.
John Erlingheuser is Advocacy Director for AARP Connecticut and can be reached by email here. AARP Connecticut is included among the sponsors of this website.
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