Hartford Business Journal

www.HartfordBusiness.com • January 7, 2019 • Hartford Business Journal 5 Millstone victorious in quest for CT power contract By Matt Pilon mpilon@hartfordbusiness.com C apping an approximately three-year lobbying push at the state Capitol by Domin- ion Energy, Connecticut's sole nuclear plant has won a state- assigned clean-energy contract that will enable it to sell approximately half of its massive output to electric ratepayers over the next decade, state officials announced. "The Millstone nuclear facility is an extremely important resource provid- ing efficient, reliable, baseload zero carbon electricity to the region as well as economic benefits to the state," the Department of Energy and Environ- mental Protection and Gov. Dannel P. Malloy's office said in announcing the deal, which came in the final days of the Malloy administration. Also selected for similar, albeit smaller contracts to sell electricity to Eversource and United Illuminat- ing were New Hampshire's Seabrook Nuclear Power Plant, which will pro- vide 230 megawatts of capacity; nine solar projects, which will provide 164 megawatts; and 100 megawatts for the offshore Revolution Wind project. Overall, the assigned contracts, which must be finalized with the Public Utilities Regulatory Authority (PURA), cover 1,524 megawatts of gen- erating capacity that will produce an estimated 11.7 million megawatt hours of electricity a year, with three-quar- ters of it coming from Millstone. The total electric output covered by the agreements is equivalent to 45 percent of the power Connecticut draws from the New England grid annually. "We are pleased that Connecticut's regulators have selected Millstone's of- fer as being in the best interest of cus- tomers," said Paul Koonce, Dominion's CEO of power generation. "DEEP's de- cision is good news for Connecticut's economy and the environment." Dominion says the Millstone deal will provide at least $670 million in net benefits to Connecticut ratepay- ers, as compared to a scenario in which the nuclear plant closed and its output was only partially replaced by other zero-carbon resources. Over the past few years, Dominion has sought to convince state lawmak- ers and regula- tors that it faces future financial risks too large to ignore. Should the plant close, it's likely that carbon-emitting plants, such as those fired by natural gas, would replace much of its output. Dominion also touted the plant's economic impact — it employs 1,500 workers, has an annual payroll of more than $100 million, and pays $40 million in state and local taxes — as a reason for it to be considered for the long-term contracts. Other power plant owners, along with environmental groups and AARP, criticized the prospect of a Mill- stone deal as a bailout or subsidy, argu- ing the plant should be forced to open its books to prove its financial condi- tion, and that giving it a long-term contract could raise electricity prices and suppress development of renew- able energy like solar and wind, which have grown in recent years thanks to similar DEEP-led, bidding processes. Dominion eventually shared its financials confidentially with PURA and DEEP. PURA deemed the plant to be at risk of retirement starting in 2023, and DEEP concurred. That at-risk designation, origi- nally created by the legislature, gave Millstone a leg up in DEEP's scor- ing criteria for the dozens of bids it received in September. While the announcement is a major win for Millstone, the deal is not quite done. The first three years of Millstone's contract are based on its submitted bid price, which was not disclosed, but DEEP said it wasn't satisfied with the rate of return Dominion wanted for the final seven years of the deal, calling it "not in the best interest of ratepayers." DEEP has ordered Eversource and UI to negoti- ate lower pricing. Solar contracts The solar projects selected by DEEP include three in Connecticut and six outside the state. DEEP said the prices utilities will pay for the solar power amount to just under 5 cents per kilowatt hour. That price, the agency said, "is approaching parity with the market price of energy, and represents continued price reduc- tions compared to our last procure- ment of grid scale solar, as well as additional savings to ratepayers." In-state projects include Montville Energy Center, Black Hill Point En- ergy Center and Gravel Pit Solar. The exact locations of each wasn't immediately clear. 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