The Day – Waterford considers possibility of life without Millstone

Waterford — While Dominion has cooled off its threats of premature shutdown, officials here have begun planning for a future without Millstone Power Station.

The plant is the town’s top employer and taxpayer, representing nearly 35 percent of the tax base.

“We recognize full well we would not be able to fill that $30 million void overnight,” town Finance Director Kevin McNabola said. “So we’re trying to be proactive. What else could we bring in here to help fill the void?”

The Representative Town Meeting’s re-established Long Range Fiscal Planning Committee recently began evaluating options for economic development. Officials say it’s early in the process, but First Selectman Dan Steward and McNabola say it’s possible Waterford could draw a large company to establish a distribution center with solid access to interstates 95 and 395.

Committee member Susan Driscoll said that, on top of finding ways to cut the budget, “We need to find some business development and get some state support to repair transportation infrastructure.”

Committee member Joshua Steele Kelly said he was pleased town leaders had brainstormed ways to generate cash and save on utilities, such as switching the street lights to LEDs, which officials say could save about $250,000 annually.

“A little bit of thought … and vigilance on the part of the whole town can help mitigate this before it becomes more of an issue,” Kelly said, noting the committee planned to meet quarterly.

Steward said the town also will save on utilities by putting more efficient energy systems in municipal buildings and installing solar panels at the landfill. He said the town would “ask the state for more grants and more money” but he and McNabola weren’t going to bank on it.

While Millstone’s two operating units are licensed until 2035 and 2045, Dominion has hinted that cheap natural gas in the wholesale energy market threatens the power station’s future. The specter of heavy job losses within the next few years — and questions about how to replace Millstone’s power while meeting the state’s green energy goals — whipped up unwavering support for the plant among area lawmakers.

Regulators this past week said they’d let the plant try to prove it is “at risk” of closure. The designation would let regulators evaluate Millstone’s environmental, economic and grid benefits, giving Dominion’s proposals a boost against solar, wind and hydropower companies in a state-run auction for zero carbon energy.

Local, state and federal officials note that no matter what, Millstone couldn’t close on a dime like a Radio Shack. Even when Millstone decides to cease operations, decommissioning can take years and involves a phased reduction in staffing before the site is maintained only for spent fuel storage, according to Dominion and the Nuclear Regulatory Commission.

Dominion critics point to publicly available data showing Millstone will remain profitable until at least 2035. Millstone’s energy capacity commitments to the New England grid make imminent closure even less likely, some argue.

‘A huge asset’

Analysts say Millstone’s annual economic impact on the state approaches $1.5 billion.

McNabola said in 2018, Millstone paid $29.7 million in property taxes; the town expects about $30.7 million from Millstone in 2019, almost 35 percent of the net taxable grand list.

Steward said even if regulators let Millstone get a favorable deal in the zero carbon auction, Dominion was “still a company we have to watch very carefully.”

“They’re a huge asset to the state,” he said, citing Millstone’s 2,000-plus megawatts, tax revenue and donations to nonprofits and area towns.

Millstone spokesman Ken Holt noted that Millstone employees have contributed more than 25,000 volunteer hours since 2013 and made almost $12 million in charitable donations since 2002, including a scholarship program at Three Rivers Community College.

‘Serious concern’ for schools

School Superintendent Tom Giard said “potential early closure of Millstone is of serious concern to the town and school district.”

“Budget reductions are certainly part of the answer and would be a necessary step,” he said. “The other part of the equation … would be to vigorously engage the state legislature and Department of Education for intervention on the funding front.”

State Department of Education spokesman Peter Yazbak said a significant dip in the town’s taxable property would impact the state Education Cost Sharing Grant formula and result in more funding.

The district has tried to control costs by eliminating top salary tiers for new teachers and requiring higher health care contributions from employees. The moves resulted in savings estimated at about $8 million over the next 20 years, Giard said. The Board of Education also worked with Eversource to extend a gas line to Clark Lane Middle School, with yearly savings in the tens of thousands of dollars.

Giard said he couldn’t speculate on how Millstone’s closure could impact enrollment of the 2,500-student district. But he said school districts often serve as a community’s “center of activity and pride.”

“A drastic reduction in services to our children would certainly have families asking themselves if they have the means to look elsewhere to give their children the best opportunity at success,” he said.

‘We haven’t been back in court’

As of the end of fiscal year 2017, the town’s unassigned fund balance totaled $13.2 million, McNabola said. Officials hope to keep building the fund to help offset the eventual wallop of a Millstone closure.

After the Connecticut Yankee nuclear plant closed in 1996, annual property tax payments to Haddam plummeted from about $13 million to a little more than $1 million, according to Connecticut Yankee spokesman Bob Capstick. A handful of employees overseen by a manager still staff the site 24/7. Forty dry cask storage containers have held 1,019 spent fuel assemblies at the site since 2005.

Today, Millstone’s assessed value is approximately $1.1 billion, McNabola said. Dominion purchased the plant about 18 years ago from Northeast Utilities for roughly $1.3 billion but argued to the town that it was only worth about $900 million.

“We spent about six or seven years discussing that with them,” Steward said, referencing a court battle settled between the town and Dominion in 2008.

Town officials at the time said the $2.7 million they spent in legal fees was worth it because of the resulting settlement.

But can the town and Dominion prevent a legal tussle over assessed value when the plant eventually closes?

Steward and McNabola said the relationship between Waterford and Dominion had improved over the years.

“We haven’t been back in court,” Steward said. “We’re on top of what they’re doing and they’re willing to share.”

‘Who’s going to absorb us now?’

Dominion Energy employs more than 1,000 workers at Millstone. Ninety-two percent of Millstone’s full-timers live in New London County, said Holt, the plant spokesman. About 37 percent of them live in either East Lyme or Waterford.

One of those employees, Ernie Babcock, isn’t eager to find a new career.

A maintenance mechanic at Millstone Power Station since 1997, Babcock started working at the Waterford plant during refueling outages in the early 1980s. Back then, he had a similar gig at West Springfield Generating Station in Massachusetts before a 10-year stint at Haddam’s Connecticut Yankee.

“When Connecticut Yankee closed, they did help find places for guys to go,” said Babcock, a 58-year-old member of Millstone’s Fix It Now (FIN) team of mechanics, electricians, operators and instrument and control technicians. “Most of us who wanted to keep working were absorbed by Millstone. But if this place shuts down, who’s going to absorb us now?”

Over the last five years, competition from natural gas and economic and political uncertainty have driven a handful of nuclear plants out of business.

The federal government recently said it was considering ways to rescue unprofitable coal and nuclear plants, and some states have either created subsidies or adjusted energy markets to benefit nuclear power. But nuclear companies still plan to shutter a half-dozen plants in the U.S. in the next few years.

“The concern is real,” said Babcock, who lives in Waterford with his wife, Monica. He is the father of Melissa Johnson, a copy editor at The Day. “We talk about it all the time. We have a lot of younger employees here, they’re trying to get to 36 years in the industry like me. But even the older guys, we don’t want to have to run out and find new employment at this point in our careers.”

Babcock said the company keeps employees up to speed on developments with regulators and lawmakers. He said he wouldn’t know what to do if Millstone shut down within a few years, especially since so many power plants have closed and others, like the West Springfield Generating Station, are “peak plants” manned by skeleton crews until demand on the energy grid spikes.

He added that a closure would hit the bottom lines of local auto dealers, big box retail stores and small businesses like Giuliano’s Bakery in Niantic, one of his favorite spots to pick up a breakfast sandwich.

b.kail@theday.com