The mission of the General Assembly's Energy and Technology Committee is to decrease the cost of electricity to consumers. To help the cause, the group passed a bill earlier this month that would force Millstone Power Station, which produces 35 percent of Connecticut’s electricity, to pay an additional $300 million annually in taxes.
“It just doesn’t make any sense,” said state Rep. Betsy Ritter, D-Waterford, who is on the committee. “It is horrible policy.”
The bill would put a half-cent per kilowatt-hour tax on coal energy, and one-half of one mill for oil-fueled energy, while putting no additional taxes on natural gas. But the largest tax would go on nuclear energy, which would pay an additional two cents per kilowatt-hour.
Millstone Power Station is the only nuclear power facility in Connecticut, so it would be the only company affected. The new fees would cost Dominion, which owns Millstone, an additional $300 million per year, Dominion spokesman Ken Holt said.
“It is one of the stupidest things the state has ever tried to do, and that is really saying something,” said J.W. “Bill” Sheehan, who is the chairman of the State of Connecticut Nuclear Energy Advisory Council and a member of Waterford’s board of finance.
Effect On Electricity Rates
The idea is to use the $300 million revenue to invest in new clean energy, and the new tax will not raise the price to consumers, supporters of the bill said. That is utter nonsense, Ritter said.
“(The General Assembly) always passes these additional taxes on energy suppliers and says it will not increase the cost of electrical rates, and they always do,” she said. “Every single one we have passed, they say it won’t increase the cost, and every single one has increased the cost to all ratepayers in Connecticut.”
Dominion is locked into long-term contracts with suppliers, so it theoretically cannot renegotiate the rate, Ritter said. However, that isn't the truth, she said.
“I don’t know a contract in the United States of America that can’t reopen over $300 million,” Ritter said. “That is a pretty large bill to deal with.”
Even if it cannot get out of the contracts, it will be able to eventually, she said. And when it does, it will raise the rates beyond what it needs to be to make up for all the money it lost, she said.
That is, if Dominion keeps it doors open. If Dominion cannot renegotiate contracts and is forced to absorb the entire $300 million in annual costs, the company will likely no longer be profitable, Holt said.
If the evaluation is done and the company realizes it can no longer make money, it will stop producing energy, Holt said. The company's goal is to make money, not lose money, he said.
“We won’t operate at a loss,” Holt said. “Our job as a business is to make electricity, yes, but we are in the business, like every other business, of making money.”
If Millstone stops producing electricity, the supply of energy would go down, so the prices would be forced up, Holt said. It is impossible to levy a $300 million cost on a company and not have the product become more expensive, he said.
“(The bill) will increase the electric bill of every single Connecticut resident,” he said.
Anti-Business
This bill is fundamentally anti-business, Holt, Sheehan, Ritter and Waterford First Selectman Dan Steward said. The state sees a company making money and has decided to go after it, Ritter said.
“Dominion cannot be the solution to the state’s spending problem,” Holt said.
Local Impact
While the passing of this bill would affect everybody in Connecticut, the effect in Waterford would be totally destructive, Steward said. Millstone is both the town’s biggest taxpayer, paying 30 percent of the total property taxes, and its biggest employer, with more than 1,650 employees, according to town records.
Because the new bill would decrease the company’s profits, it would affect the assessment of Millstone Power Station, Ritter said. Town Assessor Michael Bekech was not available Friday for verification, but it would probably equal millions of dollars a year in taxpayer revenues lost, Ritter said.
To remain profitable, Millstone would also likely have to resort to layoffs, Ritter said. If Dominion decided to stop producing electricity altogether, the layoffs would be worse, Ritter said.
Holt would not confirm that Dominion would be forced to lay off employees in either scenario, saying the company would have to evaluate the situation and then make a decision. But he did say it was possible it could happen.
Where The Bill Stands
The bill was passed 12-9 by the energy committee, and will next go to the finance committee, Ritter said. If it passes there, it will go before the House and Senate.
State Sen. Andrea Stillman, D-Waterford, is on the finance committee, and has strongly opposed the bill, Ritter said.
In the energy committee, only Ritter and one other delegate represent an area east of the Connecticut River.
State Sen. John Fonfara and State Rep. Vickie Nardello, who both support the bill and are the co-chairs of the energy and technology committee, did not return phone calls.
