Bloomberg News Probes Millstone Bailout Plea

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Dominion’s Nuclear ‘Bailout’ a Do-or-Die Moment for Opponents

By Jonathan N. Crawford

(Bloomberg) — Environmental groups opposed to subsidies
for nuclear power may be facing a do-or-die moment in
Connecticut.

Lawmakers there want to help Dominion Resources Inc.’s
Millstone plant, a move they say is needed to preserve jobs and
maintain the generator’s zero-emissions power. Dominion is
lobbying for the aid, though it hasn’t said the station faces
the kind of economic headwinds that led Exelon Corp. to announce
plant closings in Illinois. Exelon ultimately won subsidies
there.

Opponents say they fear throwing a government lifeline to a
generator that isn’t drowning would make it that much more
difficult to stop similar measures under consideration in places
like Ohio and Pennsylvania. States are mulling ways to prop up
nuclear plants as wholesale power prices collapse amid
competition from cheap natural gas-fired generation and a sharp
rise in renewable energy.

“You get that precedent set here and then it might become a
bad model that is easier to put in place elsewhere,” Bill
Dornbos, a senior attorney at the Acadia Center, an
environmental group, said by phone. “That’s a real concern. It
is a risky door to open.”

Concerns have already spread to the federal level, where an
agency that oversees power markets is set to review the impact
of nuclear resources subsidized for their carbon-free
electricity. Cheryl LaFleur, the acting chairman of the Federal
Energy Regulatory Commission, said this month that the
department will hold a discussion with states, companies and
power grid operators on such payments.

13-Year Low

Booming gas production from reserves in the Northeast
helped drive revenues in New England’s energy market to the
lowest in 13 years in 2016, according to ISO New England Inc.,
operator of the six-state market. Millstone will be just one of
two nuclear plants left in the region after Entergy Corp. closes
its Pilgrim station in Massachusetts in 2019 amid falling
profits.

State aid “is spreading like a bad Dutch Elm disease in the
forest,” John Shelk, president of the Washington-based Electric
Power Supply Association, said by phone. “The nuclear folks are
seeing an opportunity to get a little extra sugar in their
coffee at the expense of other people.”

Connecticut state Senator Paul Formica, a Republican whose
district includes Waterford where the reactor is located,
introduced legislation in January that he said would allow
Millstone to sell power to Connecticut’s utilities at above-
market rates. The measure, similar to a bill that failed last
year, is needed to preserve, “an engine of economic growth” that
provides jobs and supplies over half of Connecticut’s power, he
said in a statement.

“We often wait until the problem sits directly under our
nose, instead of taking proactive solutions to move ahead a year
or two before we actually see what’s happening,” Formica said by
phone. “Do we want to take that chance at Dominion?”

Entergy Shops More Nuclear Power Plants That It Plans to
Close

Opponents of the Connecticut bill are reaching out to state
legislators and the consumer advocate, and planning protests at
the capitol, according to Nancy Burton, director of the
Connecticut Coalition Against Millstone.

“We shouldn’t give bailouts for a dying industry,” Burton
said by phone.

While Millstone isn’t at immediate risk of retirement, it’s
“certainly a potential outcome if power prices stay as depressed
as they are,” Dominion spokesman Ken Holt said by phone. “The
pressure on nuclear power plants across the Northeast is real.”

Federal License

Millstone, the state’s only nuclear plant, has commitments
to supply New England through at least 2020. Its two reactors
are licensed by federal regulators to run until 2035 and 2045.
The generator provides $1.5 billion in economic benefits
annually to Connecticut while supporting almost 4,000 jobs,
according to Dominion’s website.

Exelon and Entergy set a precedent for other operators when
in August they won subsidies totaling about $500 million a year
from New York for three plants. In December, Illinois approved a
$235 million-a-year lifeline for the Quad Cities and Clinton
nuclear facilities after Exelon announced plans to shutter the
reactors.

“There’s a lot of concern about giving a big company like
Dominion extra money without proof on the table that they
actually need it,” John Flumerfelt, a spokesman for Calpine
Corp., a competing power generator, said by phone. “While some
plants were very much on the rocks, Millstone is not showing any
signs that it’s actually in that much trouble.”

To contact the reporter on this story:
Jonathan N. Crawford in New York at jcrawford47@bloomberg.net
To contact the editors responsible for this story:
Lynn Doan at ldoan6@bloomberg.net
Jim Efstathiou Jr.

Copyright © 2017. Nancy Burton | contact us (203) 313-1510 info@mothballmillstone.org

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