Dive Brief:

• Dominion Energy has warned Connecticut state officials that the company is considering shutting down its Millstone nuclear plant, after a draft request for proposals issued by the Department of Energy and Environmental Protection (DEEP) would have made the plant ineligible to bid for certain carbon-free energy contracts for five more years.
• Connecticut lawmakers last year passed legislation allowing the state to change its energy rules to allow Millstone to sell some of its output in a competitive solicitation with renewable resources. DEEP's proposal, however, would not allow the nuclear plant to bid until 2023.
• Not all parties believe the plant is unprofitable. While a report from DEEP and the Public Utilities Regulatory Authority (PURA) earlier this year concluded the plant would likely be profitable through 2035, the finding came with plenty of caveats.

Dive Insight

For struggling nuclear plants, the situation in Connecticut is a reminder that even while states acknowledge they need the sector's emissions-free electricity, turning that into financial support remains a challenge.

Dominion said in its filing with DEEP that delaying its ability to bid on the carbon-free energy contracts undermines legislators' intent when they passed the law last year.

DEEP's report earlier this year, on the financial outlook for Millstone, concluded the plant was likely financially viable — but the conclusion was hardly definitive. The report said that using "best available public information," Millstone would likely be profitable through 2035. But because of several variables, the plant could also be at risk.

Given the uncertainty, the agency recommended an additional step to the state's procurement process, which would allow zero-carbon resources to demonstrate they are at risk. But DEEP is now proposing to not allow Dominion to do that until 2023, when the "at risk time period" would be available.

State Rep. Lonnie Reed, D, who voted for the measure to help Dominion last year, told the Connecticut Post lawmakers intended for Millstone to submit bids immediately.

“We wanted to get ahead and let [Millstone] play in the zero carbon lane,” Reed said. "We feel regulators didn’t get the point. It can’t be all solar or all wind or all nuclear.”

The comment period on DEEP's proposal runs through the end of July.

Dominion says the plant is at risk for reasons familiar to many operators: rising costs and cheap gas-fired power.

A half dozen nuclear reactors in the United States have closed permanently since 2013, and others plan to retire before their operating licenses run out. Several states have passed legislation to assist struggling plants. This year, New Jersey Gov. Phil Murphy signed a law establishing a zero emission credit program for the state's nuclear generation.