Tax Plan Could Shut Nuclear Plant: Lawmakers

Several state and local politicians in Connecticut challenged the fairness of a proposed state tax that would disproportionately fall on Dominion's D.N Millstone nuclear power plant and could force the shutdown of the two reactors.

The proposed legislation, An Act Concerning Electric Rate Relief Senate Bill 1176, aims to raise revenue, provide ratepayer relief and fund clean energy projects.

The money would come from a tax on the power produced at nuclear, coal and oil-fired generators in the state.

The bill is expected to raise about $340 million a year, but Dominion said $330 million of that would come from Millstone, the only nuclear plant in the state.

"If the tax passes we will be forced to shut Millstone. That burden of $330 million will make the plant no longer economically viable to operate," Dominion spokesman Ken Holt told Reuters.

State Senator John Fonfara, a Hartford Democrat, and State Representative Vickie Orsini Nardello, a Democrat from Bethany, referred the bill to the Joint Committee on Energy and Technology on March 10, one day before the massive earthquake crippled the Fukushima nuclear plant in Japan.

The bill passed the Energy and Technology Committee by a vote of 12 to 9 on March 22 and will commence on or after July 1 if it becomes law.

Since Fukushima, governments around the world, including the United States, have reviewed the safety of their existing nuclear fleets and some nations reevaluated proposals to build new reactors.

State Senator Andrea Stillman and State Representative Betsy Ritter, both Democrats from the town of Waterford where the plant is located, held a press conference challenging the fairness of the proposed bill.

"SB 1176 from its outset has the damaging effect of putting our state in one corner and one single corporate entity in the opposite corner Â— ahead of what promises to be a bruising, knockdown showdown between the two," Stillman said.

Ritter said the bill "specifically and punitively targets certain large companies, and creates a difficult and negative environment for businesses interested in thriving in the state of Connecticut. This proposal doesn't help us in building the strong economic future that our state so badly needs in these tough times."

The shutdown of Millstone could have a major impact on the state.

The 2,022-megawatt plant produces enough power to meet about half the state's energy needs without any greenhouse gas emissions.

Dominion said it provides about $1.2 billion in annual economic benefits to the state and employs 4,230 direct and indirect jobs, including 1,080 Dominion employees and 350 supplemental workers.

Dominion also said a shutdown of the plant would not only cut tax revenues for the state but lead to higher electricity costs for consumers due to more expensive replacement power.

Connecticut consumers already pay the second highest cost for power in the nation, almost 19 cents per kilowatt hour in 2010 versus the national average of about 11 cents. Only Hawaii consumers pay more.

"This is not an easy decision or idle threat," Dominion said on its website about closing the plant if the tax becomes law. The proposed tax threatens the economic viability of the facility and the jobs of more than 4,000 people.