$42 Million Millstone Tax Going Away?

It looks like a tax proposed by Gov. Dannel Malloy that would cost Millstone Power Station $42 million a year might go away after all.

Connecticut News Junkie reports that State Sen. Andrea Stillman, D-Waterford, has suggested the state borrow more money rather than continue a $76 million annual tax on electricity producers. Stillman, along with many others, has said that the tax on electricity producers will just increase the cost of electricity for everybody in New England.

The proposal is to tax electricity produced in Connecticut at $2.50 per megawatt, which yields the state about $76 million a year. Of that total, $42 million is paid for by Millstone Power Station, the largest electricity producer in New England.

The tax was originally adopted in 2011, with Dominion – owners of Millstone Power Station – saying Malloy promised them it would sunset in July of 2013. Malloy proposed the exact opposite, but if Stillman’s proposal goes through, the tax will indeed sunset.

However, some republicans have spoken against Stillman’s proposal. They said that her plan of borrowing more will cause financial problems in the future, according to Connecticut News Junkie.

“I refuse to believe that the state’s only options are an unfair tax today, or borrowing and paying higher interest tomorrow,” Sen. Minority Leader John McKinney, R-Fairfield, told Connecticut News Junkie. “The state needs to cut spending. I certainly hope that the passage of this bonding bill isn’t an indication that the Democrats plan to follow suit with the governor and propose another unaffordable state spending increase when they announce their budget on Friday.”

The Finance and Appropriations Committee, which Stillman is part of, will release their budget proposal today. Patch will keep you updated if the generator tax is part of their plan.

To read more about the proposed generation tax that costs Millstone $42 million a year, click here. To read more about the efforts to eliminate that tax, click here.