Malloy Mum on Extension of $42M Millstone Tax

At the beginning of this month, Gov. Dannel Malloy proposed extending a $2.50 per megawatt production tax on electricity produced by all non-renewable Connecticut generators, which includes Waterford's Millstone Power Station.

Malloy promised Millstone that the tax, which was instituted in 2011, would sunset at the end of June, according to Millstone spokesman Ken Holt. Holt said Malloy “broke his promise” and said the nuclear power plant will pass the $42 million annual cost of the tax onto ratepayers, meaning higher electricity rates for Connecticut residents.

Patch sent an email and left a voicemail for Malloy’s spokesman, Andrew Doba, asking for comment about the tax two weeks ago. Neither was returned.

On Tuesday, Malloy held a press conference on his “comprehensive energy strategy,” saying his proposed budget will bring “cheaper, cleaner and more reliable power to Connecticut.” Patch again emailed a Malloy spokesperson the same questions about the proposal. The spokesperson, Juliet Manalan, emailed back a one-paragraph statement from the governor’s office that did not answer those questions.

“The fact is that generation rates have fallen 12 percent in the last two years,” the statement read. “That means Connecticut residents are paying less for energy than they were two years ago.  That means Connecticut businesses are paying less, so they can reinvest that money and create jobs.”

Patch emailed Manalan back at 1:20 p.m. on Tuesday and said the statement did not answer our questions, and asked if there would be any more comment from the governor's office. We have yet to hear back from Manalan or the governor’s office.

Our Questions

Here was our email to Doba, which he never responded to. Patch sent this email to him on February 6th, which was 14 days ago. We sent it again to Manalan Tuesday.

The email:

Mr. Doba,

My name is Paul Petrone and I'm the editor of the Waterford Patch (and I just left a message on your office phone).

My understanding is the governor is proposing to keep the production tax on energy generators in his budget proposal, which costs Millstone $42 million per year. Millstone has told me in previous interviews that the governor promised them this tax would only be a two-year tax and would be sunsetted at the end of June. Millstone also did not pass this tax onto ratepayers as part of that understanding.

A few questions here:

First off, did the governor break his word?

The governor said in his address he is going to work to lower electricity costs. Won't this increase the cost of electricity by not sunsetting a $42 million tax on the largest generator of power in Connecticut?

Why continue with a production tax, a tax Millstone has told me it has never dealt with before. Most other states tax a percentage of the sale of electricity, instead of a blanket tax on the amount of electricity a generator produces regardless of what price they sell that electricity for, or if they sell the electricity at all. Why a production tax?

Did the governor talk with Millstone and other generators before releasing this budget to tell them about this alleged broken promise?

And finally, is this a good way to do business? With the governor allegedly breaking his promise?

*The email was edited slightly for grammar.