The governor of the US state of Connecticut has passed a senate bill that could lead to Dominion Energy being allowed to sell output from its Millstone nuclear power plant alongside other higher-priced clean energy sources, such as wind and solar. However, he said if this is going to happen, the utility must fully cooperate with requests from state authorities for detailed financial information.
Yesterday Governor Dannel Malloy passed Senate Bill 1501 - An Act Concerning Zero Carbon Procurement - which, providing it is shown to be in "the best interest of ratepayers", would allow the state's nuclear power plants to enter into a competitive procurement process with other zero carbon energy sources. The bill was approved by the Connecticut General Assembly last week.
An executive order Malloy signed on 25 July directed the state's Department of Energy and Environmental Protection (DEEP) and its Public Utilities Regulatory Authority (PURA) to carry out an assessment of the current and future viability of continued operation at Dominion's Millstone plant. The study is also to consider the role of existing nuclear generating facilities, large-scale hydropower, demand reduction measures, energy storage, and renewable energy in helping Connecticut meet emissions targets whilst maintaining grid reliability.
In a preliminary progress report to Malloy, DEEP said Dominion had not supplied Levitan & Associates Inc (LAI) - consultants to DEEP and PURA - with the necessary financial documentation for their assessment.
"Dominion has not provided the requested information either in writing or through an oral briefing, despite DEEP and PURA's ability to protect confidential business information through a protective order, as is standard practice," DEEP said.
It added, "A primary impetus for Executive Order 59 was the claim from Dominion that Millstone was experiencing the same types of severe financial challenges that other nuclear facilities in deregulated markets have faced due to low natural gas prices and other factors. Owners of existing nuclear facilities in New York and Illinois, for example, provided evidence of their distressed financial position to justify ratepayer-backed financial support mechanisms in those states. For this reason, DEEP and PURA believe that it is reasonable to expect such a demonstration from Dominion."
Boston-based LAI has informed DEEP and PURA that, based on the best available information, Millstone is likely to operate profitably between 2022 (the first year the plant does not have an existing obligation in the Forward Capacity Market) and 2035 (when the operating licence of Millstone unit 2 expires). Under expected market conditions, the present value of Millstone's net after-tax cash flow from mid-2021 through to mid-2035 is about $2.3 billion. Even in a scenario that assumes unfavourable market conditions for Millstone, Dominion's after-tax cash flow is $1.2 billion, according to LAI.
"As such, there is unlikely to be a basis upon which to conclude at this time that Dominion requires electric ratepayers to provide financial support outside the regional market in order for Millstone to continue operating profitably," DEEP told Malloy.
"Absent any information being provided by Dominion, it is unlikely that LAI's analysis will change prior to finalisation of the study," LAI said.
Malloy called for Dominion to fully cooperate with DEEP and PURA to provide the necessary information to complete an accurate assessment of Millstone.
"The importance of this asset to both the state and the region cannot be overstated," he said. "If we are to realise the goals set out by this legislation, there is more work to be done.
"The state needs significantly more engagement from Dominion as other nuclear facility owners have engaged under similar circumstances in other states. I look forward to continuing this conversation and to increased cooperation from the party seeking assistance."
Dominion's Millstone plant is the only nuclear power plant in the state of Connecticut. Its two operating reactors, with a combined capacity of 2088 MWe, generate about 45% of the state's electricity.