Millstone: Malloy Broke $42 Million Promise

Millstone said Gov. Dannel Malloy is proposing to break a $42 million promise and, if approved, Connecticut’s electricity rates will increase because of it.

A “broken promise” by Gov. Dannel Malloy has left Millstone Power Station “disappointed” and possibly on the hook for $42 million more in taxes next year.

In 2011, the state legislature placed a $2.50 per megawatt production tax on all electricity produced in Connecticut, with the exception of renewable energy like solar and wind. The cost per year to Millstone was $42 million, but Malloy promised it would be a two-year tax and it would expire on July 1, 2013, according to Millstone spokesman Ken Holt.

Millstone agreed not to pass the tax onto ratepayers and absorb the $82 million in extra taxes over the past two years, believing the governor would live up to his word and push to sunset it on July of this year, Holt said. But on Wednesday, Malloy released his budget proposal for the 2013-14 and 2014-15 fiscal years, and included in the proposal was an extension of the production tax.

“We are disappointed with the governor’s decision to break his promise,” Holt said. “When he introduced the tax, it was a temporary measure to help the state through a crisis.”

Holt said Millstone will no longer absorb the tax and it will pass it onto ratepayers. That will mean higher electricity rates to Connecticut families, he said.

“Customers will end up carrying the burden of this tax,” Holt said. “This will ultimately hurt Connecticut families that already pay the highest electric rates in the continental United States.”

In his speech Wednesday, Malloy said his proposed budget “continues aggressive efforts to lower energy costs for families and businesses.” Yet Holt said that the extension of this tax will increase the cost of energy to Connecticut families and businesses.

The proposal still needs to be approved by the state legislature. The office of State Sen. Andrea Stillman, D-Waterford, said she will fight against the extension of the tax.


Dominion, which owns Millstone Power Station, has long-term contracts with the providers it sells its electricity to. If Dominion wants to pass on this tax to ratepayers, those contracts would have to be renegotiated.

If this tax is extended, Dominion will renegotiate those contracts and it will pass on those costs, Holt said. Holt said “contracts can be changed” and will be changed because Millstone will not absorb another $42 million in lost revenue to taxes.

“Forty-two million dollars a year is a lot of tax to eat,” he said.

Waterford First Selectman Dan Steward said he is against the extension and would consider going to Hartford and lobbying against the tax. He said the governor should have followed through with his promise.

“When you make a promise, you should do everything you can to adhere to it,” Steward said.

Waterford Tax Assessor Mike Bekech said the extension of the tax could have an impact on the assessment of Millstone, which makes up roughly 30 percent of the town’s grand list. Bekech said it would depend on if Millstone can pass the tax on to ratepayers or not, but income derived from a commercial property is one of the key components to assessing its value.

Meanwhile Holt said the extension of the tax, at least at this time, would not force Millstone to lay off employees of shut down the plant. He also said the tax, which is a production tax, is unlike any tax Dominion has ever dealt with before. Holt said most other taxes are a sales tax on the sale of energy, not just a flat fee on the amount of energy produced, regardless of the how much it sells for or if it is sold at all.

A Wednesday afternoon phone call and an email by Patch to Andrew Doba, Malloy’s director of communications, was not returned.   

Jason Morris February 09, 2013 at 08:25 PM
haha, good, hope they close the place finally. found the news reports from back in april 2011 with Dominion threatening to close it saying that $330M of the expected (at the time) $340M tax revenue it would produce would come from them...lol. obviously they were wrong and it came to $42M as stated in your article. and here's nice quote: "Nardello said she doubts claims that the new tax would devastate the plant's finances. After reviewing Dominion's corporate and regulatory filings, she said, she believes the nuclear plant has for years been highly profitable for the company and would stay in the black even with the proposed taxes. "They had profits over the years that are far and above all the other operators," she said." time to end nuclear power. the only ethical, moral energy solutions are renewables. Solar, Wind, Geothermal, Hydro, Piezoelectric. http://www.gizmag.com/piezoelectric-road-harvests-traffic-energy-to-generate-electricity/10568/
Paul Petrone February 09, 2013 at 09:02 PM
You are referring to another tax that was eventually dropped. That tax would have cost them $330 million annually. Instead, that tax was dropped, and they were given a $42 million annual tax, on top of the taxes they already pay.
willban1 February 10, 2013 at 02:03 PM
Since when is a politician lying and costing the taxpayer more a news story?
Will Brady February 11, 2013 at 03:44 PM
The comments from Dominion in this item - sound more like self-serving corporate prattle than they do real news. The Dominion Virginia Power subsidiary alone was found to have overcharged electricity customers more than $523.7 million than they should have last year, state auditors concluded. I wonder how much Dominion has gotten away with scamming Connecticut's citizens. According to Dominion's corporate website, they aren't hurting: "RICHMOND, Va., Jan. 31, 2013 /PRNewswire/ -- Dominion (NYSE: D) today announced ...operating earnings for the 12 months ended Dec. 31, 2012, amounted to $1.75 billion ($3.05 per share), compared to originally reported operating earnings of $1.75 billion ($3.05 per share) for the same period in 2011." It breaks my heart to hear of the supposed "sufferings" of corporate giants like that. Next time write a more balanced article, and not one based on the bleatings of corporate shills.


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