As two Connecticut utilities sign a contract assuring the continued operation of the Millstone nuclear power plant, the governors of the six states making up the region of New England have issued a document outlining their commitment to cooperate to maintain clean energy facilities including nuclear.

Millstone (Image: Dominion)

The 10-year, 9 million MWh per year contract between plant operator Dominion and utilities Eversource and United Illuminating was announced on 15 March by Connecticut Governor Ned Lamont and Katie Dykes, commissioner of the state's Department of Energy and Environmental Protection (DEEP). The two-unit 2088 MWe pressurised water reactor plant generates about 45% of Connecticut's electricity but had been at risk of retirement by 2023.

"The loss of Millstone would have been catastrophic for our state and our region," Lamont said. The shutdown of the plant would have exposed the region to a nearly 25% increase in carbon emissions as well as increased risks of rolling blackouts, "billions of dollars" in power replacement costs and the loss of over 1500 jobs, he said. "With this deal in place, we can start moving forward with new investments in renewable and clean energy needed to transform our grid."

Connecticut passed a law in 2017 allowing nuclear power plants to bid into markets alongside other zero-carbon resources such as wind, solar and hydropower, but the proposed timescale applied to at-risk plants would have delayed the inclusion of Millstone - the state's only nuclear capacity - until 2023. Last December, a finding from Connecticut's Public Utilities Regulatory Authority (PURA) - that Millstone was at risk of premature retirement before that date - prompted the state and DEEP to approve the selection of a bid from Dominion under the zero-carbon procurement programme.

Dykes said the contract that has now been negotiated would ensure the state and the region could maintain a "critical fuel-secure, zero-carbon" resource. The closure of Millstone would have resulted in an "unacceptable" increase in carbon emissions and reliability, she said. "Securing this resource will enable our state to continue its progress in scaling energy efficiency and renewable investment that will ultimately be necessary to transition to a clean electric grid in the future."

Dominion said the contract represented a "modest financial uplift" and was a "significant milestone" in its progression towards a more regulated and long-term earnings profile, with a resulting reduction in business risk. "This is a huge win for Connecticut, the region and our colleagues at Millstone," President and CEO Paul Koonce said.

The agreement will now be reviewed by PURA.

Regional commitment

The joint commitment by the governors of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont, announced by Lamont at the same time as the contract, reaffirms their commitment to work together to ensure the region's energy system continues to be reliable and affordable while enabling states to reach their environmental goals.

The commitment says states have been working to diversify their energy supply and reduce carbon emissions through the integration of new clean energy generation and energy efficiency measures, but wholesale markets are designed to select resources in a "fuel-neutral way at the least cost" rather than to achieve environmental mandates.

"A particular challenge is the retirement of nuclear generation resources," it notes, adding that the closure of Millstone would have increased winter energy security risks across the region as well as increasing regional greenhouse gas emissions by 25%.

"Recognising that the entire New England region has a stake in ensuring a reliable energy system that also produces affordable outcomes for consumers, the New England Governors commit to work together, in coordination with [regional grid operator] ISO New England and through the New England States Committee on Electricity, to evaluate market-based mechanisms that value the contribution that existing nuclear generation resources make to regional energy security and winter reliability," the commitment says.

States whose energy policies "prioritise clean energy resources" commit to work together on mechanisms to value the "important attributes" of such resources while "ensuring consumers in any one state do not fund the public policy requirements mandated by another state's laws."

Lamont said such mechanisms to value the benefits of nuclear and other clean energy facilities could complement the Millstone contract.