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Nuclear wins big in clean energy competition – and not just Millstone

The final clean energy competition of the Malloy administration not only handed the Millstone Nuclear Power Station the lifeline it has sought for more than two years – claiming the plant was at risk of closing otherwise – but it also accepted a proposal from the region’s only other nuclear plant, Seabrook in New Hampshire, which is not claiming financial distress.

Together the two plants account for some 1,256 megawatts of power – more than 82 percent of the overall bids accepted.

In a major disappointment to the environmental community, only 104 megawatts of offshore wind power was approved – to be added to the 200 megawatts the state has already authorized for the Revolution wind project being developed by Deepwater Wind, the developers of the nation’s only operating offshore wind off Block Island.

The small commitment to offshore wind, which many have touted as a potentially large economic and jobs driver for the state, leaves Connecticut far behind other states in the region, each with large offshore wind commitments as high as 3,500 megawatts.

The energy transition committee for Gov.-elect Ned Lamont has recommended the state do a similar offshore wind carve-out of 2,000 megawatts by 2030. That’s roughly the same amount of power Millstone provides.

Also approved were nine grid-scale solar projects around the region – two with energy storage components – totaling 164 megawatts. Three of the solar projects, one of them with storage, would be in Connecticut.

The selection of Millstone underscored the notion among many in the environmental community that the process had been designed more as a lifeline to Millstone than a genuine clean energy effort.

“We’re glad the state will see some new solar and wind come online as a result of this procurement, but are still very concerned that as a whole, these choices don’t put Connecticut on the road to a clean energy economy,” said Claire Coleman, climate and energy attorney at Connecticut Fund for the Environment. The future is off-shore wind, solar, geothermal, and smart strategies for efficiency and energy storage – but the small investments in these newer resources compared to the heavy investment in nuclear largely don’t reflect that. Instead the state has doubled down on the energy sources of the past.”

Rob Klee, the outgoing commissioner of the Department of Energy and Environmental Protection, which made the selections, referred to the selections as a “diverse selection of zero-carbon resources that ensures that Connecticut is doing its part to address climate change.”

He said of Millstone in a statement: “We remain committed to keeping this valuable zero-carbon resource, provided that it is affordable, as we work towards long-term replacement through smart investments in offshore wind and solar paired with grid-scale storage. At the same time, we believe ratepayers deserve, and can get, a more competitive price for Millstone’s output.”

A statement from Paul Koonce, who heads up power generation for Millstone’s owner, Dominion Energy, said in part: “Our zero carbon offer brings at least $670 million in net benefits to Connecticut customers. We are especially pleased to share this news with the 1,500 women and men that operate the Millstone Power Station.”

Sen. Paul Formica, R-East Lyme, ranking member on the Energy Committee in the next session, represents both Waterford, where Millstone is located, and New London, whose port stands to benefit from the offshore wind industry. He has fought on behalf of Millstone relentlessly.

“We’ve always said Millstone’s nuclear output should act as bridge to the renewable future. This indicates DEEP is thinking along the same line. This gives us time to flesh out the solar and the offshore wind,” he said. While he said the now 300 megawatts of offshore wind Connecticut has committed to is “great news for the city of New London,” he admitted expectations for offshore wind awards from this procurement were higher.

“I’m a little disappointed,” said Rep, Jonathan Steinberg, D-Westport, a member of the Energy Committee since 2011, who has been a vocal proponent of renewable energy, though not an opponent of Millstone’s continued operation. “I was really hoping we’d have more renewables – particularly solar and wind.” He said he was also a little disappointed there were not more storage projects to help make solar in particular a better alternative to fossil fuels. “I would have like to have seen at least half of the solar projects with storage.”

And Mike Trahan, who runs the industry group Solar CT – at odds with DEEP over several solar policies he says have slowed solar growth in the state and cut jobs in the process – was not happy to see most of the solar projects approved were out-of-state. “If the goal is it to lower energy costs and create jobs, maybe we should start by not giving jobs away to other states,” he said.

The hand-wringing over Millstone began in 2016 when its owners, Dominion, threatened to close the plant long before the licenses of its two units ran out in 2035 and 2045 because the plant was no longer competitive against the extremely low-priced natural gas powering most of the electric plants in the region. The situation had surfaced in other states – in some cases resulting in financial bailouts for the nuclear plants.

In the face of severe budget problems and the fact that Dominion would not open its books to document its claims, Connecticut lawmakers were having none of that. The battle raged until a special legislative session in late 2017 that resulted in permission for DEEP to authorize including Millstone in energy procurements.

DEEP recommended early this year that the plant be allowed to compete in a zero-carbon procurement – which would pit it against renewable power such as solar and wind. But it also said that unless the company opened its books, it would not be allowed to compete as an “at-risk” source, which would have allowed it to compete on attributes other than price.

Additional financial material released to the Public Utilities Regulatory Authority, PURA, later resulted in an interim ruling in December that the plant could be deemed at risk, though it indicated that it would not be in danger of closing until 2022.

The procurement parameters announced today give Millstone a 10-year contract, the first half of which would be as a not-at-risk source. The second half, beginning in 2022, would be at-risk. The Seabrook contract, which is not at-risk, is for eight years starting in 2022 when Millstone moves to at-risk status.

Life after Millstone?

The environmental advocacy community has tended to lay low on the issue of Millstone. While it does represent zero carbon power, which gets the state closer to its greenhouse gas emissions reduction target, it is not a renewable energy source and there’s that matter of radioactive waste.

Environmentalists also worry that allowing Millstone into a clean energy competition could hamper potential new renewable projects – especially the larger ones such as offshore wind.

“Frankly, it’s very disappointing that Connecticut has passed up this opportunity to send a strong message to the industry that our state is serious about expanding offshore wind,” said John Humphries of the Connecticut Roundtable on Climate and Jobs, which has been promoting the potential job creation in offshore wind especially at the port of New London. “This is the critical period when investment decisions are being made that will affect the trajectory of the industry for decades.

“The incoming administration and the legislature will have to be very clear that Connecticut wants a significant share of the local jobs and investment that offshore wind can bring to our state,” he said.

Humphries and others worried that the state is not planning sufficiently for life after Millstone.

“While Millstone is currently an important part of Connecticut’s power mix, we need to start planning for the end of its current license,” Coleman said. “The best way to ensure Connecticut’s renewable energy markets are mature by the time Millstone closes is to make critical investments in zero-carbon renewable technologies like offshore wind and solar/storage projects now.”

The winners represent a fraction of the proposals. There were a staggering 90 bid packages containing about 120 separate options from more than two-dozen developers and owners. Bids totaled about 8,600 megawatts – four times the power of Millstone.

Up to 45 percent of Connecticut’s total electric load could be approved under the legislation that authorized the competition.

Aside from the nuclear plant bids, there were more than 70 bid packages for solar, about half of which included optional storage projects. There were offshore wind bids from all three developers in the region with projects as large as 1,000 megawatts.

Among the project types not selected were five land-based wind projects – all in Maine, which is likely to be more open for business with a Democratic governor about to take over from Republican Paul LePage, who had placed a moratorium on wind projects. Some included storage.

There were bids for large-scale hydro-electric and transmission projects were submitted with some of the wind and hydro.

The clean energy announcement is the last in a cascade of energy and climate change policies and decisions as Malloy leaves office. They have included Connecticut’s participation with nine other states and the District of Columbia in the next phase of the Transportation Climate Initiative, which the state has been part of since its inception in 2012. The next step will be to craft a policy mechanism for a kind of cap and trade for motor vehicles based on the greenhouse gas emissions of the fuel used.

It also included the final recommendations from the Governor’s Council on Climate Change – the most contentious of which is likely to be a carbon charge in partnership with other states in the region. And it included PURA’s approval of long-term contracts for the last clean energy winners – 200 megawatts of offshore wind, the state’s first foray into that renewable energy source, and about 50 megawatts of fuel cells.