Politics & Government
State Committee Scraps $42M Millstone Tax
Despite the state's finance committee recommending the removal of a $42 million annual tax on Millstone Power Station, it could still be around for the next two years.
A new budget proposal has hit the state legislature, this time without a $76 million annual tax on electricity generators, $42 million of which is paid by Waterford’s Millstone Power Station.
In February, Gov. Dannel Malloy released his budget proposal for the upcoming two fiscal years. In it, he proposed a $2.50 tax on each megawatt of electricity produced in Connecticut –a tax that costs Millstone Power Station $42 million a year – to balance the budget.
But on Friday, the state's Finance, Revenue and Bonding Committee, which is charged with figuring out how to pay for the state’s budget, released its budget proposal for next two fiscal years. In it, the group agreed to sunset a $76 million tax on electricity generators, a tax Dominion – owners of Millstone Power Station – said the state promised to sunset at the end of June.
Waterford’s state senator, Andrea Stillman, is the chairwoman of that committee. Stillman has adamantly opposed the tax, saying it will increase the cost of electricity to ratepayers throughout New England.
“Given repeated assurances that this tax would ‘sunset’ after two years, many utility companies did not—and have not—passed its cost along to customers, absorbing costs mounting into the tens of millions of dollars,” Stillman said in a January press release. “Should policymakers decide to extend this tax, its continued cost will be borne by ratepayers—to the tune of some $100 million in wholesale electricity prices—and that will in turn negatively impact both retail and commercial electricity consumers.”
Now it is up to the state legislature to make a final decision on the budget. Kevin Hennessy, Dominion’s Director of Governmental Affairs in New England, said the finance committee sent “a strong message” on Friday by removing the tax and said he hopes it will stay away.
“This past week was definitively a positive week,” Hennessy said. “Our focus is on getting the tax to expire as scheduled.”
Millstone – the largest energy producer in New England – and other Connecticut electricity generators sell their electricity to ISO New England. Therefore, if the cost to produce electricity in Connecticut goes up, the cost of electricity goes up throughout all of New England, according to the Rhode Island and Massachusetts attorney generals, who both sent letters to Malloy opposing the tax.
Hennessy said Millstone did not pass this tax onto ratepayers the first two years of the tax's existence because Malloy promised it would go away at the end of June. However, if the tax continues, Millstone will pass that tax on to ratepayers, which will increase the cost of electricity, he said.
In February, Gov. Dannel Malloy released his budget proposal for the upcoming two fiscal years. In it, he proposed a $2.50 tax on each megawatt of electricity produced in Connecticut –a tax that costs Millstone Power Station $42 million a year – to balance the budget.
But on Friday, the state's Finance, Revenue and Bonding Committee, which is charged with figuring out how to pay for the state’s budget, released its budget proposal for next two fiscal years. In it, the group agreed to sunset a $76 million tax on electricity generators, a tax Dominion – owners of Millstone Power Station – said the state promised to sunset at the end of June.
Waterford’s state senator, Andrea Stillman, is the chairwoman of that committee. Stillman has adamantly opposed the tax, saying it will increase the cost of electricity to ratepayers throughout New England.
“Given repeated assurances that this tax would ‘sunset’ after two years, many utility companies did not—and have not—passed its cost along to customers, absorbing costs mounting into the tens of millions of dollars,” Stillman said in a January press release. “Should policymakers decide to extend this tax, its continued cost will be borne by ratepayers—to the tune of some $100 million in wholesale electricity prices—and that will in turn negatively impact both retail and commercial electricity consumers.”
Now it is up to the state legislature to make a final decision on the budget. Kevin Hennessy, Dominion’s Director of Governmental Affairs in New England, said the finance committee sent “a strong message” on Friday by removing the tax and said he hopes it will stay away.
“This past week was definitively a positive week,” Hennessy said. “Our focus is on getting the tax to expire as scheduled.”
Millstone – the largest energy producer in New England – and other Connecticut electricity generators sell their electricity to ISO New England. Therefore, if the cost to produce electricity in Connecticut goes up, the cost of electricity goes up throughout all of New England, according to the Rhode Island and Massachusetts attorney generals, who both sent letters to Malloy opposing the tax.
Hennessy said Millstone did not pass this tax onto ratepayers the first two years of the tax's existence because Malloy promised it would go away at the end of June. However, if the tax continues, Millstone will pass that tax on to ratepayers, which will increase the cost of electricity, he said.
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