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

  • Company wants ratepayer aid for reactors licensed through 2045
  • Critics say operators seek ‘extra sugar’ at public’s expense

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 spread to the Federal Energy Regulatory Commission, which is planning to review the impact of subsidies for nuclear power, acting chairman Cheryl LaFleur, said this month.

“We support Dominion’s position in Connecticut,” Exelon Chief Executive Officer Chris Crane said in an interview. “That’s just another way to be able to keep nuclear on a level playing field.”

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?"

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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.

Economic Benefits

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." 

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.”

— With assistance by Rebecca Kern

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