Millstone – You’re Mad for the Wrong Reason

‘AAAGH!!! EVERSOURCE IS RECOVERING HUNDREDS OF MILLIONS THROUGH PUBLIC BENEFITS!! I’M SO MAD’ – Reddit (I’m mad too, I love you guys)

Here’s the deal, the Millstone deal is incurring hundreds of millions in costs, but did you ever stop to ask why? 

I emailed every federal representative we have as well as the governor, the AG, PURA, the consumer counsel, and every high-ranking member of the CT legislature’s Energy and Technology Committee asking for them to confirm what I thought the explanation was. I eventually got an answer.

The core reason the Millstone deal is incurring such high costs is that it is leading Eversource and UI to buy energy twice.

Here’s a quote from one of the responses I got: “… millstone is a hedge, sometimes ratepayers are in the money and get a credit, and sometimes, especially when prices are really low in the market, ratepayers pay extra. So far since the hedge went into effect in 2019, most adjustment periods didn’t work in ratepayers favor…”

For those who don’t know, a hedge is an investment position meant to offset potential losses or gains. It keeps things closer to average.

The problem with this explanation is that, since the deal was signed, Eversource has never purchased energy for less than the cost of its hedge position. The energy from the standard procurement process has almost always cost more than twice what the energy from the Millstone deal has.

This is a little like buying eggs for $5, selling them to your neighbor for $3.50, and then going to the fancy grocery store two towns over and buying them for $11 (or in 2023 $24).

This is also why the situation is so expensive; we pay for the electricity that is bought and sold at a loss, and then we pay to buy the electricity again through standard procurement. 

When I pointed this out to the official I was discussing it with, they stopped responding. 

Let me be clear: the utilities own this energy, which means they could hypothetically use it, but they currently sell it back to the market and we pay twice. This is why you should be mad. 

Who benefits from this setup? As far as I can see, only the middlemen on the ISO-NE who sell us the very expensive energy.

WRITE YOUR LOCAL REP AND ASK THEM WHY WE DON'T USE THE ENERGY FROM THE MILLSTONE DEAL.

Edit: Here's an example of a bid sheet from the standard procurement process, for reference the KWh cost of electricity from Millstone is 5 cents per KWh: https://www.dpuc.state.ct.us/DOCKCURR.NSF/8e6fc37a54110e3e852576190052b64d/52ece33965d7e50b852589f1004d7a3a/$FILE/SS%20Redacted%204%2018%202023.pdf