Why Dominion is Expanding in Virginia, Not Waterford

A look at the many reasons Dominion picked Virginia to build a new nuclear power plant instead of Waterford, and why company officials have said they will not put another reactor in Waterford.

Earlier this month, there was an article on a Fredericksburg news site about the delays associated with Dominion’s effort to build another nuclear reactor at its North Anna Nuclear Power Station in Virginia.

What might be newsworthy, at least to Waterford residents, is that Dominion isn’t building another reactor at Millstone Power Station, despite that the site can hold six reactors and only has three. Not that it is a surprise, as State Rep. Betsy Ritter, D-Waterford, told Patch that Dominion told her it has no plans to build another reactor at Millstone.

A new reactor would mean around 500 to 700 new jobs, would provide millions in tax revenue to the town and the state annually and it would produce enough electricity to power a quarter of Connecticut, according to Millstone spokesman Ken Holt said. Yet Ritter said Dominion has told her and other state officials that they would not build another reactor in Connecticut unless something changes because of the “very demanding regulatory environment” in Connecticut.

Holt said there are many decisions behind building a new reactor, which can take more than a decade to permit and build and can cost more than $5 billion to construct. The demand for electricity in a certain area is important, but so is the regulatory environment of the state, he said.

Virginia's government passed legislation to make it easier for Dominion to build a new reactor, Holt said. Meanwhile, Connecticut has done the opposite.

Virginia Compared to Connecticut

Perhaps the biggest difference between the two states is that Connecticut has a non-regulated energy market and Virginia’s is regulated. That makes a big difference in building a new nuclear reactor, as it requires a “massive upfront capital expenditure,” Ritter said.

In a regulated market, Dominion can begin to charge customers the cost of construction for the reactor while they are building it, Holt said. That means in Virginia, Dominion doesn’t have to take on all the cost upfront, but instead it is put on the ratepayers, he said.

In Connecticut, it is the opposite. Dominion would have to pay for all of the cost upfront of building the plant and then hope to recoup those costs by selling electricity once the reactor is built.

But there are other differences as well. Connecticut has the highest tax burden of any of the states that Dominion has a nuclear power plant in, Holt said. Property taxes and state taxes are both higher on Millstone than at the North Anna site, he said.

The best example is a $42 million annual production tax levied against the plant the past two years. Holt said the company has never dealt with a production tax based off the amount of electricity a plant produces regardless of how much they sell it for, or if they sell it at all.

That tax is expected to sunset this July, Ritter said. The state is facing another tough budget year though, but Ritter said ensuring that tax would indeed sunset would be a high priority for her this upcoming budget year.

Additionally, Ritter said the regulatory climate of Connecticut is high on all businesses in Connecticut, including nuclear power plants. Ritter said that is because there is a strong desire in this state for those regulations.

John Sheehan January 22, 2013 at 09:29 PM
Millstone 1 is shutdown and in SAFESTOR and will not be further deconstructed until the entire site is decommissioned. There are no contamination or radiation leaks from Millstone 1. It is properly and safely contained and its spent fuel rods are currently in the spent fuel pool. I believe that if the expansion of the dry cask stowage field is approved, the Millstone 1 fuel rods will be transferred to dry cask stowage after that expansion is completed.
Casey January 22, 2013 at 11:21 PM
The comments on this article is further evidence that America has become a "Do Nothing" society. We are afraid of everything. Can't build roads, bridges, buildings and certainly can't build a Nuclear Power plant in spite of a stellar record for that industry. We were once a nation of doers - we led the world in all things. We now trail and are falling back at an alarming rate and there is no spirit in this country that will stop the slide.
Ron January 22, 2013 at 11:59 PM
The only building being performed in CT is Governor Molloy building Jackson Labs (subsidized at over $ 1,000,000 per promised job created counting janitors and the Xerox printer toner replacement vendor) and the train to nowehere to get CT residents faster access to Springfield MA ( $ 200,00,000) Now Molloy is asking for another $ 200,000,000 to subsidize more bio research companies to use CT taxpayer money rather than stockholder and private capital. I think he forgot that Pfizers, a private corporation and biggest drug company in the world, tried to build this bio research capability in CT and abandoned that effort to move to Boston and other places. However Molloy and the Democrats know more than Pfizers on bio devlopment because Molloy once read the warning label on the back of a bottle of aspirin and almost understood it. Dominion wouldn't build a toilet in CT because it has smart people and obligations to stockholders to only invest in states that have rational regulations and tax policies. However the one huge construction project being built now iin CT and no where else in the world is the State Union Suggestion Box that is to contain all the suggestions from the State unions which are projected by the union to save CT $ 400,000,000. So far the Suggestion Box has yielded one cent in total savings with the suggestion to print the instructions on how to use a paper clip on double sided paper. Kudos to Dominion for there intelligence.
fedspy January 23, 2013 at 03:02 PM
lets follow our leader in washington and the democratic senators and have solar panels on our roofs, and wind mills for energy, green energy is the solution, and lets not forget bikes to ride around on. the progressives know how to destroy an economy let alone the power structure.
xsailor8 January 27, 2013 at 06:07 PM
Doesnt anyone think its odd i cant find an insurance company that will insure my losses in the event that millstone does a japanese kind of thing? I wonder why? Risk too high? Im told im insured by the feds...yeah right! we can see how well they responded to sandy...if you consider all the costs of nuclear power from cradle to grave (but we have no grave) born by consumers and the fed. govt. its not cheap power at all.


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