Disclosure and Protections Needed Before Special Deals for Power Plant is Approved

Dominion Resources, the private energy company in Virginia that operates the Millstone Nuclear Power Station in Connecticut, has told our legislators that the plant is unprofitable. As a result, Dominion is seeking legislation to compensate for the losses. They claim the request is not for a ratepayer subsidy, but rather allow them to compete for state power contracts with Eversource and United Illuminating

The use of the phrase “competes for a state contract” is misleading. Dominion currently competes against other generators throughout all of New England to serve consumers across multiple states, including Connecticut.

Connecticut is in a regional electric market (known as ISO New England). Therefore, any Connecticut-only subsidy plan for Millstone would violate the wholesale price formation rules of Federal Energy Regulatory Commission (FERC), as well as the Interstate Commerce Clause of the U.S. Constitution.

FERC and the courts have struck down similar schemes in Ohio and are reviewing another subsidy plan like these in New York.

The market rules that Dominion and other power generators operate under in Connecticut and throughout New England are the same rules that they asked for when the state deregulated electricity nearly 20 years ago.

Now that the power rates might slightly improve for the ratepayers, Dominion wants to operate by the rules from the 1990s. They want ratepayers to subsidize additional profits for them without having to disclose any verification of the losses for this request to the Public Utilities Regulatory Authority (PURA).

Essentially, Dominion wants special treatment: long-term generation contracts for their power at subsidized prices. Any subsidy or long-term contract should be tied to Millstone disclosing their financial losses to the public.

According to TheStreet.com in a January 24, 2017 article, “Dominion Resources has been a profitable investment for more than a quarter of a century.” A January 23, 2017 article on marketrealist.com stated, “Dominion is one of the fastest growing US utilities. It expects long-term earnings growth of ~10% for the next few years—nearly double the industry average.”

A recent AARP survey showed that 87 percent of voters over the age of 45 feel Dominion should provide their customers and state legislators with financial reports that show a loss in profit before any subsidies are approved. Additionally, more than three quarters of respondents (78%) feel funding for any approved subsidy should be spread across all of the New England states Millstone serves and not just Connecticut.

The Millstone plant has evidently cleared the three-year capacity auction, which would mean it is indeed economically viable. The plant cannot close during this three-year period. Beyond that, in order to shutter, it would need approval from ISO New England and FERC. Alternatively, they could order it to stay open. The plant is also eligible for new pay-for-performance capacity payment enhancements.

The rules that generators operated under before Connecticut deregulated should continue to apply. Dominion wants the parts of regulation that benefit them, but not the rules that benefit ratepayers, a public inspection of the books.