October 12, 2017

With no plan for replacing Millstone, what are CT's options?

HBJ file photo
HBJ file photo
Millstone Power Station in Waterford

For the third time in less than a year-and-a-half, the Connecticut legislature has come close, but still hasn't okayed a plan to boost the finances of the Millstone Nuclear Power Station.

Millstone's owner Dominion is arguing it needs help because cheap power produced from natural gas is forcing it to consider shutting Millstone down.

But even if legislation does finally pass, it won't change some basic realities: One day Millstone will close, and Connecticut doesn't have a plan for that.

With Millstone will go some 2,100 megawatts of carbon emissions-free electricity. The plant is the largest single power source in the New England grid and accounts for nearly one-third of the power in Connecticut. It is critical to getting the state anywhere near meeting its goals for reducing greenhouse gas emissions.

Many say the state should have been working on an after-Millstone plan at least since the issue of its closing first came up in early 2016 – but really long before that – a dozen years ago when the licenses for its Units 2 and 3 were extended to 2035 and 2045, respectively. (Unit 1 closed in 1995.)

The question of how to replace Millstone elicits all kinds of ideas. But parameters matter: Are we talking short-term, long-term, cleanly, at what cost to ratepayers? But in a world of changing energy and energy delivery technology, there's also the idea that all of Millstone's power doesn't need to be replaced and that whatever you do, you need to modernize the electric grid too.

"The first thing you do is free yourself from the idea that you do actually have to replace it," said Karl Rabago, executive director of the Pace Energy and Climate Center at Pace Law School in New York, who has an extensive background as an energy executive and regulator. He also has advised Connecticut legislators and activists on a host of clean-energy matters.

"It's not a zero-sum game. There are a lot of other resources that can displace the capacity," Rabago said.

Raw numbers provided by Synapse Energy Economics of Cambridge, Mass., show the loss of Millstone wouldn't plunge the region off a power cliff. Natural gas units scheduled to come online in the region by 2020 would offset currently scheduled plant retirements. Those are mostly coal plants, though one of the closures is the 670-megawatt Pilgrim Nuclear Power Plant in Massachusetts in May 2019.

This expected new capacity does not include plants now in the early planning stage or any of the renewable energy sources under construction or somewhere in the pipeline. Massachusetts alone is requiring the building of 1,600 megawatts of offshore wind and 1,600 megawatts of rooftop solar. Together that's half-again Millstone's capacity, even without other grid-scale clean power projects as well as additional rooftop solar.

According to a filing by the Independent System Operator that runs the New England grid (ISO-NE), an overview of power resources with and without Millstone showed that its loss right now would cut into the 16 percent reserve power ISO-NE maintains on the grid.

ISO-NE generally has 34,000 to 36,000 megawatts available. The highest demand ever on the grid was 28,130 megawatts on Aug. 2, 2006. Barring something cataclysmic, lights, air conditioners and everything else would have turned on even without Millstone.

Since then energy efficiency and rooftop solar systems have kept demand on the grid flat to declining, according to ISO-NE's data. And ISO's forecasts show those savings getting larger. Energy efficiency, which ISO says saves more than 1,800 megawatts now, is predicted to account for nearly 4,500 megawatts in 2026. In that same time period, it predicts solar will grow from around 1,900 megawatts to more than 5,600, and wind will go from 1,100 to more than 8,400.

It's those ideas of efficiency and clean energy that Rabago is talking about. He and others believe Millstone can be replaced with an all-of-the-above approach that includes reducing power needs through more advanced energy management systems, microgrids that can take pressure off the main grid, as well as a suite of renewable energy options including solar, offshore wind, hydropower, fuel cells and the holy grail – energy storage.

"There's no silver bullets, he said. "There's only silver buckshot."

That's less of a radical concept than it might appear. Connecticut officials and energy experts need only look – and ARE looking – across the border to New York's Renewing the Energy Vision – REV. It fosters new concepts in power generation, distribution and efficiency as the state faces shutdown of its Indian Point nuclear power plant, adopts a ban on natural gas fracking, and sets tough clean energy and greenhouse gas emission targets.

Rabago and others point to the 10-year shutdown processes underway at Indian Point and Diablo Canyon in California – both to be replaced with renewable energy.

"Instead of this sort of dance around 'well maybe we'll bail you out and maybe we won't,' it might be time to start the negotiations and say 'dammit, shutdown is coming; now all we have to do is set the date,'" he said. "The planning objective is – it closes on Dec. 31, 202X, or whatever it is, and nobody notices. It closes and Connecticut breathes and New England breathes a collective yawn."

But getting to that yawn, especially with replacement power that doesn't add greenhouse gas emissions, hasn't been the case with rapid nuclear shutdowns. Timing makes a big difference.

The emissions impact

A survey by the Center for Climate and Energy Solutions (C2ES) showed that all six nuclear plants that have retired since late 2012, including San Onofre in California and Vermont Yankee, were replaced with fossil fuel generation – mainly natural gas, one with coal. In all cases greenhouse gas emissions rose.

The most recent greenhouse gas inventory in California showed in-state emissions still nine million metric tons higher than they were back in 2011 when San Onofre was running. In New England emissions went up by 2.5 percent in 2015 after Vermont Yankee closed the previous year.

"It's not simple to replace them," said Doug Vine, senior energy fellow at C2ES, who generally follows the nuclear industry. "It's not simple to replace them quickly anyway. And all you've achieved is getting back to zero, so it's like you're running to stand still."

That, along with the prospect that the knee-jerk replacement strategy for Millstone would be natural gas – particularly if it were to shut down soon – has the regional environmental community uniformly concerned, especially in the face of emissions in Connecticut that began rising again in 2013.

"The essential thing we've been saying throughout is you have to have a plan," said Peter Shattuck, director of clean energy initiatives at the regional advocacy group, Acadia Center. "If there's no plan to replace it – yes, it's going to be replaced by gas right away."

The environmental community and others also worry that if natural gas plants or pipelines become the short-term solution, the cost of such investments would keep them entrenched for decades, thwarting more robust development of grid-scale renewables, such as offshore wind and solar, as well as so-called distributed generation, the most common form of which is rooftop solar on individual homes and businesses.

Hydropower imported from Canada also is seen as a clean, quick-ish fix. "The large shiny object," is what Vine called it. "It's relatively close. The Canadians would love to sell more to the U.S.," he said.

Environmental groups are split on hydro. There are tricky transmission issues – like getting lines built through northern New England's undeveloped forests.

Connecticut v. New England

In a July executive order, Gov. Dannel P. Malloy authorized a rapid-response resource assessment to help figure out whether the state should come to Millstone's financial defense. The assessment isn't designed to be a replacement plan for Millstone, but it will make some evaluations of the kinds of things that might ultimately replace Millstone.

It also could begin to shed light on the costs to consumers of the various timing scenarios for closing Millstone, as well as the costs to prop it up. Those numbers are mysteries right now, especially with Dominion refusing to open Millstone's books.

Because of the way the different regions within the New England grid receive power, the areas outside of Connecticut are likely to feel a greater pinch in power availability from the loss of Millstone than Connecticut would. (ISO-NE provided documentation, but refused repeated requests for an interview.)

And that speaks to a major dispute over the potential closing of Millstone – whether it's a regional or a Connecticut issue.

Ask just about anyone in Connecticut wrestling with the Millstone problem, and the answer is regional.

"Connecticut is part of an integrated New England grid, so the question of what a replacement scenario looks like is also one we have to evaluate in combination with what else is happening in other states," said Mary Sotos, DEEP's new energy division chief. "We're 25 percent of the New England load; Massachusetts is 50 percent. If Massachusetts is able to deliver on its aggressive goals, that's good for us; that's good for the region. But I think having a coordinated, thoughtful approach of how all those things work together will be an important part."

While many put a large focus on how clean and renewable Millstone's replacement power will be, Sotos put a lot of emphasis on cost. And she was definitely in the natural gas camp when it came to an immediate Millstone replacement because it's now cheaper than renewable alternatives.

"If we're trying to build out a competitive economy, and we already have the highest electric rates in the continental U.S., I don't think we can be cavalier about costs," she said. "I think there are tradeoffs."

The other New England states have balked at spending money to help keep Millstone operating. Even though they benefit from its power, because the plant is located in Connecticut, through an old complicated formula Connecticut can claim most of the clean-power credits from Millstone.

There is widespread recognition that a multi-state grid like the one ISO-NE runs needs to have more regional camaraderie going forward. It doesn't have the benefit of being a one-state grid like California's or New York's that can take unilateral actions more easily.

Indeed there are actually a number of regional actions in progress pertaining to the New England grid. One is called the Integrating Markets and Public Policy (IMAPP, pronounced Eye-map) process, in which ISO-NE is working with the voluntary New England Power Pool (NEPOOL) to coordinate power needs with clean energy and other state-specific policies.

A separate effort called Competitive Auctions with Subsidized Policy Resources (CASPR, pronounced casper), is looking at how to equitably have subsidized, renewable energy compete against more standard, non-subsidized forms of power – say offshore wind versus Millstone's nuclear power.

ISO-NE is also conducting a regional fuel security analysis largely to assess the region's increasing reliance on natural gas in the face of a number of planned power plant shutdowns and pipeline constraints, especially in winter. A Millstone closure could put even more pressure on the pipeline system, which has had been expanded very little in the face of widespread opposition all over the Northeast and a belief among many that it is unnecessary. The study is due for release this month.

All of this can be viewed not only as a back-door admission that Millstone is a regional, not just a Connecticut, concern, but also as an admission that the idea of eventually replacing it in the style of the old central station grid is a dated concept.

It's unlikely a replacement for Millstone will mimic what the nuclear facility is considered now – a baseload power unit that operates 24/7. Replacement is more likely to be a compendium of all kinds of energy. Most, maybe even all, of it could be renewable, distributed around the region in ways that optimize efficiency for getting it into the grid when and where it's needed.

In other words, it would be a whole new paradigm for how an electric grid operates. That would require a whole new mindset from everyone – utilities all the way down to customers.

Looking into the future

Dan Esty, the man who set Connecticut's clean-energy strategy in motion in 2011 and served as the first DEEP commissioner until 2014, has long championed the idea of a modernized grid structure with market forces dictating it's direction. He said the time has come for utilities – which in Connecticut now provide just transmission and distribution of electricity – to reframe their business models, and he regretted not having done more to make that happen while he was in office.

"The critical feature of the energy markets today is that you pay for energy and capacity," he said. "In the energy market of the 21st century you need to pay for energy, capacity and attributes of the energy – whether it's clean, whether it's reliable."

Essentially Esty is envisioning a business model in which a utility may benefit more from providing the components and efficiencies of a modernized grid structure than perpetuating the centralized structure that's been in place for a century. But he cautioned that the utility model of 25 years from now is likely to be very different from the model in place over the next five to ten years. And he pointed particularly to energy storage – a not-yet-ready-for-prime-time technology that has the potential to be a game changer for intermittent energy sources like solar.

"In 25 years I can imagine getting beyond this concept of baseload power, but not in the next five to 10," he said. "And I think this is where one has to have both a vision of the future and a practical reality in mind simultaneously to produce good energy policy."

There are some who think the state is being too timid and too slow in pushing for more renewables, and they point to tepid commitments to offshore wind and counter-intuitive solar policies in the new draft Comprehensive Energy Strategy released this summer. They think the state should be more actively trying to buy into the offshore wind market, now in development.

Massachusetts is already betting on offshore wind, which has the potential to produce large swaths of power. It may be variable, but is not intermittent like onshore wind.

There are those who would like to see the state push utilities more to embrace new businesses, such as running microgrids or advanced energy management or efficiency as part of a more decentralized energy system.

Rep. Lonnie Reed, D-Branford, who is co-chair of the legislature's Energy and Technology Committee, reiterated what she has said repeatedly – that the state needs an "all-of-the-above" strategy.

"One of the frustrations is that so many people are traveling in one lane and not seeing the big picture," she said.

She worries that the NIMBY mindset has now morphed into BANANA – build absolutely nothing anywhere near anyone – and will make new energy sources harder to add as communities fight wind turbines, solar fields and even gas plants.

"Everybody intellectually loves this stuff till it comes to their neighborhood," she said. "Then it freaks them out. 'Yeah, yeah, yeah.' They believe in it, but 'please put it someplace else.'"

She too believes the utility business model needs a reset as part of plotting the path for a post-Millstone region.

"Not only do we have to have a whole reset – but it's urgent. The clock is ticking," she said. "The decisions we make in the next few years will mean years of what our energy ecosystem is going to look like. That's why it's so scary, because you're afraid to invest too much in the wrong things – too many gas plants – yeah we're going to live with those babies for 30 years."

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