Connecticut legislators unveiled a trio of proposed taxes on nuclear power Wednesday after previous incarnations of their plan were rebuked by the energy industry and the governor.
Sen. John Fonfara, D-Hartford, and Rep. Vickie Nardello, D-Prospect – co-chairs of the Energy & Technology Committee – offered three versions of their proposed tax on electricity generation for legislators to choose, raising $72 million, $100 million or $150 million. Their original proposal generated $340 million in tax.
Fonfara and Nardello said the new proposals are specifically designed so the electric generators cannot pass the tax onto ratepayers, a main argument against their previous proposals.
Dominion – operator of the nuclear Millstone Power Station in Waterford, which generates more than half of the state’s power – bitterly opposes the tax since most of it comes from nuclear.
In the $340 million proposal, 98 percent of the tax came from Dominion. Under the three new proposals, between 87-93 percent of the tax would come from Dominion.
“Dominion has invested more than $600 million into Millstone since purchasing the station in 2001, improving the reliability and overall margin of safety,” said Daniel Weekley, Dominion vice president for Government Affairs. “This is a strange way for these legislators to treat a company that has grown its business.”
If the state adopts the tax, Dominion has threatened to close the Millstone plant.
Gov. Dannel Malloy opposed the $340 million tax, saying it disproportionately went after nuclear power. In his proposed budget, Malloy includes a $72 million tax on electricity generators, although more spread out throughout the industry with Dominion paying 55 percent of the tax.
In a press conference on Wednesday announcing their new proposals, Nardello and Fonfara said their tax proposals go after nuclear power because it is cheaper than other sources of fuel.
Even though operating costs at power plants vary throughout Connecticut, federal law dictates that each power generator must be paid the same price. Therefore, cheaper fuel sources such as nuclear receive greater profits from operations than more expensive fuel sources, such as natural gas.
“By taxing generators who have low costs, and minimizing taxes on the natural gas generators who set the price of electricity, we enable ratepayers to be held harmless,” Nardello said.
Nardello and Fonfara were supported Wednesday by six other Democrat legislators, the Office of Consumer Council, the Connecticut AARP, the Connecticut Citizen Action Group, Better Choices Connecticut and SEIU.
Weekley said raising taxes on electricity generation – especially the cheap sources of generation such as nuclear – only adds to Connecticut’s problems of having the second highest electricity rates in the nation.
“It’s disappointing that a few legislators continue to pursue these attempts without really focusing on core energy issues in the state such as why Connecticut consumers pay 20 percent more for electricity than other New England states,” Weekley said.
