Millstone pricing saga nearing an end
A long, tough fight over how Millstone Power Station sells the electricity it generates appears to be reaching a final and fair end.
Not everyone agrees, of course. But it is worth noting that the most vocal and best financed opponents of giving Millstone the latitude it says it needs to survive are natural gas power plant operators, who stand to sell more electricity if there were no Millstone nuclear reactors operating.
For nearly three years, Millstone owner Dominion Energy has been trying to make the case that it faces the same price stresses that have forced the closure of other nuclear plants in the country. The weak point in that argument is that Millstone is doing quite well now and — based on the information state regulators have been able to evaluate — will be OK for some time, at least.
This past session, Gov. Dannel P. Malloy and the legislature passed the dispute on to the Department of Energy and Environmental Protection. It was assigned the task of gathering the evidence and deciding, with state regulators, whether it was in the best interest of the state and consumers to allow Millstone to sell some of the power it produces through an auction process heretofore opened only to renewable energy producers.
Dominion said that process, and the ability to allow it to lock in price points in long-term contracts, would insulate Millstone from the volatility in the market tied to natural-gas prices.
The conclusion of DEEP and other state regulators as to whether Millstone should be afforded the opportunity was yes and maybe.
Yes, it is in the interest of the state, DEEP found, not to call Dominion’s bluff and risk a Millstone closure that would cut the energy produced in the state by half and force a switch from nuclear, which produces no greenhouse emissions, to fossil fuels.
And a Millstone closure, given the forces of supply and demand, would drive up prices.
So, unless the legislature intervenes, state regulators this spring will allow Millstone to be part of a bid process previously open only to solar, hydropower and wind producers. The deciding factor whether to award bids to Millstone will be price.
However, under the legislation, if Millstone provides further proof that the nuclear station is at risk of retirement, its bid could be given added weight for reliability, greenhouse gas avoidance and providing fuel diversity.
So far Dominion has been unwilling to provide regulators with all the information they say they need to make this determination. The energy company says the information is proprietary. Critics say Dominion is not providing the information because it can’t make its case for special treatment.
All of which makes this a fair outcome. Millstone can compete, but its hand will only be strengthened if it makes the case for a desperate situation.
As for the legislature, it would be foolish to try to grab ahold of this hot potato again. The better choice is to let matters play out.
We will see. Dominion has insisted that by cutting out the hedge-fund middlemen in the sale of the electricity it produces, it will mean savings that actually will benefit consumers. Opponents say this new procedure amounts to a subsidy for a company that doesn’t need one and that it will force price increases on consumers.
Time will tell who is right. And what the legislature giveth, it can taketh away, based on the results.