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November 14, 2009
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I thought since the Marlin Closing thread was getting bogged down with my historical stuff from Connecticut that didn't really have anything to do with Marlin or firearms, I'd just post the news about my employer here. It's going to be an interesting battle. Of course, if you aren't interested in politics and big corperations fighting over money, don't read it.
Happyness is a Hot DW and a pile of used brass!!! Rich
November 14, 2009
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Here is the bill, it's called SB 1176 (Senate Bill)
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| General Assembly | Raised Bill No. 1176 | ||
| January Session, 2011 | LCO No. 4529 | ||
| *04529_______ET_* | |||
| Referred to Committee on Energy and Technology | |||
| Introduced by: | |||
| (ET) | |||
AN ACT CONCERNING ELECTRIC RATE RELIEF.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective July 1, 2011) (a) As used in this section:
(1) "Person" has the same meaning as provided in section 12-1 of the general statutes;
(2) "Electric generation services" has the same meaning as provided in section 16-1 of the general statutes;
(3) "Electric generation facility" means electric generation facility, as the term is used in section 12-94d of the general statutes;
(4) "Regional bulk power grid" means regional bulk power grid, as the term is used in section 16a-7b of the general statutes;
(5) "Alternative energy system" has the same meaning as provided in subdivision (21) of subsection (a) of section 12-213 of the general statutes;
(6) "Fuel cells" has the same meaning as provided in subdivision (113) of section 12-412 of the general statutes;
(7) "Commissioner" means the Commissioner of Revenue Services;
(8) "Department" means the Department of Revenue Services; and
(9) "Person subject to tax" means a person providing electric generation services and uploading electricity generated at such person's electric generation facility in this state to the regional bulk power grid.
(b) (1) For each calendar quarter commencing on or after July 1, 2011, there is hereby imposed a tax on each person subject to tax, which tax shall be one-half of one mill for oil-fueled generation, two cents on nuclear generation, and one-half of one cent on coal-fired generation, multiplied by the net kilowatt hours of electricity generated by such person at such person's electric generation facility in this state and uploaded to the regional bulk power grid, provided the tax imposed by this subsection on coal-fired generation shall only be imposed on the net kilowatt hours of electricity generated by such electric generation facility in this state and uploaded to regional bulk power grid during the months of January, February, June, July and August.
(2) Each person subject to tax shall, on or before the last day of January, April, July and October of each year, render to the commissioner a return, on forms prescribed or furnished by the commissioner, reporting the kilowatt hours of electricity generated by such person at such person's electric generation facility in this state and uploaded to the regional bulk power grid during the calendar quarter ending on the last day of the preceding month and reporting such other information as the commissioner deems necessary for the proper administration of this section. The tax imposed under this section shall be due and payable on the due date of such return. Each person subject to tax shall be required to file such return electronically with the department and to make payment of such tax by electronic funds transfer in the manner provided by chapter 228g of the general statutes, irrespective of whether the person subject to tax would have otherwise been required to file such return electronically or to make such tax payment by electronic funds transfer under the provisions of chapter 228g of the general statutes.
(c) Whenever the tax imposed under this section is not paid when due, a penalty of ten per cent of the amount due and unpaid or fifty dollars, whichever is greater, shall be imposed and interest at the rate of one per cent per month or fraction thereof shall accrue on such tax from the due date of such tax until the date of payment.
(d) The provisions of section 12-548 of the general statutes, sections 12-550 to 12-554, inclusive, of the general statutes and section 12-555a of the general statutes shall apply to the provisions of this section in the same manner and with the same force and effect as if the language of said sections had been incorporated in full into this section and had expressly referred to the tax imposed under this section, except to the extent that any provision is inconsistent with a provision in this section.
(e) The tax imposed by this section shall not apply to any net kilowatt hours of electricity generated at an electric generation facility in this state exclusively through the use of fuel cells or an alternative energy system.
(f) At the end of each fiscal year commencing with the fiscal year ending June 30, 2012, the Comptroller is authorized to record as revenue for such fiscal year the amount of tax imposed under the provisions of this section on electricity generated prior to the end of such fiscal year and which tax is received by the Commissioner of Revenue Services not later than five business days after the last day of July immediately following the end of such fiscal year.
(g) Revenues collected from the tax imposed pursuant to this section shall be (1) credited to the resources of the General Fund, (2) used to provide ratepayer relief, and (3) used to provide funding for clean and renewable energy projects.
Sec. 2. Subsection (a) of section 16-245e of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011):
(a) As used in this section [,] and sections 16-245f to 16-245k, inclusive: [, and section 16-245m:]
(1) "Rate reduction bonds" means bonds, notes, certificates of participation or beneficial interest, or other evidences of indebtedness or ownership, issued pursuant to an executed indenture or other agreement of a financing entity, in accordance with this section and sections 16-245f to 16-245k, inclusive, the proceeds of which are used, directly or indirectly, to provide, recover, finance, or refinance stranded costs [or economic recovery transfer,] or to sustain funding of conservation and load management and renewable energy investment programs by substituting for disbursements to the General Fund from the Energy Conservation and Load Management Fund established by section 16-245m and from the Renewable Energy Investment Fund established by section 16-245n, and which, directly or indirectly, are secured by, evidence ownership interests in, or are payable from, transition property;
(2) "Competitive transition assessment" means those non-bypassable rates and other charges, that are authorized by the department (A) in a financing order [in respect to the economic recovery transfer, or in a financing order,] to sustain funding of conservation and load management and renewable energy investment programs by substituting disbursements to the General Fund from proceeds of rate reduction bonds for such disbursements from the Energy Conservation and Load Management Fund established by section 16-245m and from the Renewable Energy Investment Fund established by section 16-245n, or to recover those stranded costs that are eligible to be funded with the proceeds of rate reduction bonds pursuant to section 16-245f and the costs of providing, recovering, financing, or refinancing [the economic recovery transfer or] such substitution of disbursements to the General Fund or such stranded costs through a plan approved by the department in the financing order, including the costs of issuing, servicing, and retiring rate reduction bonds, (B) to recover those stranded costs determined under this section but not eligible to be funded with the proceeds of rate reduction bonds pursuant to section 16-245f, or (C) to recover costs determined under subdivision (1) of subsection (e) of section 16-244g. If requested by the electric company or electric distribution company, the department shall include in the competitive transition assessment non-bypassable rates and other charges to recover federal and state taxes whose recovery period is modified by the transactions contemplated in this section and sections 16-245f to 16-245k, inclusive;
(3) "Customer" means any individual, business, firm, corporation, association, tax-exempt organization, joint stock association, trust, partnership, limited liability company, the United States or its agencies, this state, any political subdivision thereof or state agency that purchases electric generation or distribution services as a retail end user in the state from any electric supplier, electric company or electric distribution company;
(4) "Finance authority" means the state, acting through the office of the State Treasurer;
(5) "Net proceeds" means "net proceeds" as defined in section 16-244f;
(6) "Stranded costs" means that portion of generation assets, generation-related regulatory assets or long-term contract costs determined by the department in accordance with the provisions of subsections (e), (f), (g) and (h) of this section;
(7) "Generation assets" means the total construction and other capital asset costs of generation facilities approved for inclusion in rates before July 1, 1997, but does not include any costs relating to the decommissioning of any such facility or any costs which the department found during a proceeding initiated before July 1, 1998, were incurred because of imprudent management;
(8) "Generation-related regulatory assets" means generation-related costs authorized or mandated before July 1, 1998, by the Department of Public Utility Control, approved for inclusion in the rates, and include, but are not limited to, costs incurred for deferred taxes, conservation programs, environmental protection programs, public policy costs and research and development costs, net of any applicable credits payable to customers, but does not include any costs which the department found during a proceeding initiated before July 1, 1998, were incurred because of imprudent management;
(9) "Long-term contract costs" mean the above-market portion of the costs of contractual obligations approved for inclusion in the rates that were entered into before January 1, 2000, arising from independent power producer contracts required by law or purchased power contracts approved by the Federal Energy Regulatory Commission;
(10) "Department" means the Department of Public Utility Control;
(11) "Financing entity" means the finance authority or any special purpose trust or other entity that is authorized by the finance authority to issue rate reduction bonds or acquire transition property pursuant to such terms and conditions as the finance authority may specify, or both;
(12) "Financing order" means an order of the department adopted in accordance with this section and sections 16-245f to 16-245k, inclusive;
(13) "Transition property" means the property right created pursuant to this section and sections 16-245f to 16-245k, inclusive, in respect [to the economic recovery transfer or in respect] of disbursements to the General Fund to sustain funding of conservation and load management and renewable energy investment programs or those stranded costs that are eligible to be funded with the proceeds of rate reduction bonds pursuant to section 16-245f, including, without limitation, the right, title, and interest of an electric company or electric distribution company or its transferee or the financing entity (A) in and to the rates and charges established pursuant to a financing order, as adjusted from time to time in accordance with subdivision (2) of subsection (b) of section 16-245i and the financing order, (B) to be paid the amount that is determined in a financing order to be the amount that the electric company or electric distribution company or its transferee or the financing entity is lawfully entitled to receive pursuant to the provisions of this section and sections 16-245f to 16-245k, inclusive, and the proceeds thereof, and in and to all revenues, collections, claims, payments, money, or proceeds of or arising from the rates and charges or constituting the competitive transition assessment that is the subject of a financing order including those non-bypassable rates and other charges referred to in subdivision (2) of this subsection, and (C) in and to all rights to obtain adjustments to the rates and charges pursuant to the terms of subdivision (2) of subsection (b) of section 16-245i and the financing order. "Transition property" shall constitute a current property right notwithstanding the fact that the value of the property right will depend on consumers using electricity or, in those instances where consumers are customers of a particular electric company or electric distribution company, the electric company or electric distribution company performing certain services;
(14) "State rate reduction bonds" means the rate reduction bonds issued on June 23, 2004, by the state to sustain funding of conservation and load management and renewable energy investment programs by substituting for disbursements to the General Fund from the Energy Conservation and Load Management Fund, established by section 16-245m, and from the Renewable Energy Investment Fund, established by section 16-245n. The state rate reduction bonds for the purposes of section 4-30a shall be deemed to be outstanding indebtedness of the state;
(15) "Operating expenses" means, with respect to state rate reduction bonds, [or economic recovery revenue bonds,] (A) all expenses, costs and liabilities of the state or the trustee incurred in connection with the administration or payment of the state rate reduction bonds, [or economic recovery revenue bonds,] or in discharge of its obligations and duties under the state rate reduction bonds, [or economic recovery revenue bonds,] or bond documents, expenses and other costs and expenses arising in connection with the state rate reduction bonds or economic recovery revenue bonds, or pursuant to the financing order providing for the issuance of such bonds including any arbitrage rebate and penalties payable under the code in connection with such bonds, and (B) all fees and expenses payable or disbursable to the servicers or others under the bond documents;
(16) "Bond documents" means, with respect to state rate reduction bonds, [or economic recovery revenue bonds,] the following documents: The servicing agreements, the tax compliance agreement and certificate, and the continuing disclosure agreement [and indenture] entered into in connection with the state rate reduction bonds [or the economic recovery revenue bonds] and the indenture;
(17) "Indenture" means [the indenture executed in connection with the state rate reduction bonds or the economic recovery revenue bonds, or,] with respect to state rate reduction bonds, the RRB Indenture, dated as of June 23, 2004, by and between the state and the trustee, as amended from time to time; and
(18) "Trustee" means, with respect to state rate reduction bonds, the trustee appointed under the indenture. [;]
[(19) "Economic recovery transfer" means the disbursement to the General Fund of nine hundred fifty-six million dollars from proceeds of the issuance of the economic recovery revenue bonds; and
(20) "Economic recovery revenue bonds" means rate reduction bonds issued to fund the economic recovery transfer, the costs of issuance, credit enhancements, operating expenses and such other costs as the finance authority deems necessary or advisable, and which shall be payable from competitive transition assessment charges that replace the competitive transition assessment charges funding stranded costs and that are offset in part by decreases to the charges funding the Energy Conservation and Load Management Fund, as provided in subdivision (3) of subsection (a) of section 16-245m.]
Sec. 3. Section 16-245f of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011):
(a) An electric company or electric distribution company shall submit to the department an application for a financing order with respect to any proposal to sustain funding of conservation and load management and renewable energy investment programs by substituting disbursements to the General Fund from proceeds of rate reduction bonds for such disbursements from the Energy Conservation and Load Management Fund established by section 16-245m and from the Renewable Energy Investment Fund established by section 16-245n, and may submit to the department an application for a financing order with respect to the following stranded costs: (1) The cost of mitigation efforts, as calculated pursuant to subsection (c) of section 16-245e; (2) generation-related regulatory assets, as calculated pursuant to subsection (e) of section 16-245e; and (3) those long-term contract costs that have been reduced to a fixed present value through the buyout, buydown, or renegotiation of such contracts, as calculated pursuant to subsection (f) of section 16-245e. No stranded costs shall be funded with the proceeds of rate reduction bonds unless (A) the electric company or electric distribution company proves to the satisfaction of the department that the savings attributable to such funding will be directly passed on to customers through lower rates, and (B) the department determines such funding will not result in giving the electric distribution company or any generation entities or affiliates an unfair competitive advantage. The department shall hold a hearing for each such electric distribution company to determine the amount of disbursements to the General Fund from proceeds of rate reduction bonds that may be substituted for such disbursements from the Energy Conservation and Load Management Fund established by section 16-245m and from the Renewable Energy Investment Fund established by section 16-245n, and thereby constitute transition property and the portion of stranded costs that may be included in such funding and thereby constitute transition property. Any hearing shall be conducted as a contested case in accordance with chapter 54, except that any hearing with respect to a financing order or other order to sustain funding for conservation and load management and renewable energy investment programs by substituting the disbursement to the General Fund from the Energy Conservation and Load Management Fund established by section 16-245m and from the Renewable Energy Investment Fund established by section 16-245n shall not be a contested case, as defined in section 4-166. The department shall not include any rate reduction bonds as debt of an electric distribution company in determining the capital structure of the company in a rate-making proceeding, for calculating the company's return on equity or in any manner that would impact the electric distribution company for rate-making purposes, and shall not approve such rate reduction bonds that include covenants that have provisions prohibiting any change to their appointment of an administrator of the Energy Conservation and Load Management Fund. Nothing in this subsection shall be deemed to affect the terms of subsection (b) of section 16-245m.
[(b) Prior to September 1, 2010, each electric distribution company shall submit to the department an application for a financing order with respect to funding the economic recovery transfer through the issuance of economic recovery revenue bonds. The department shall hold a hearing for each such electric distribution company to determine the amount necessary to fund the economic recovery transfer, the payment of economic recovery revenue bonds, costs of issuance, credit enhancements and operating expenses for the economic recovery revenue bonds. Such amount as determined by the department shall constitute transition property. The department shall allocate the responsibility for the funding of the economic recovery transfer and the expenses of the economic recovery revenue bonds equitably between the electric distribution companies. Such allocation may provide that the respective charges payable by the customers of each electric distribution company may commence on different dates and that such rates may vary over the period the economic recovery revenue bonds and the related operating expenses are being paid, provided (1) such charges are equitably allocated to the customers of each electric distribution company, and (2) the department determines that, over such period, and taking into account the timing of charges, the charges on a kilowatt hour basis assessed to the customers of the respective electric distribution companies have substantially the same present value after consultation with the finance authority as to the discount rate to be used in determining such present value. Any hearing with respect to a financing order in respect to the economic recovery transfer and the issuance of economic recovery revenue bonds shall not be a contested case, as defined in section 4-166. The department shall issue a financing order in respect to the economic recovery revenue bonds for each electric distribution company on or before October 1, 2010. In such financing order, the department shall determine the competitive transition assessment in respect of the economic recovery revenue bonds, which shall not be assessed prior to June 30, 2011, unless the department sets an earlier date in the financing order. A component of the competitive transition assessment in respect of the economic recovery revenue bonds shall be equal to the decreases to the charges provided in subdivision (3) of subsection (a) of section 16-245m funding the Energy Conservation and Load Management Fund. The portion of the competitive transition assessment in respect to the economic recovery revenue bonds equal to such decreases shall be assessed and collected from the date such charges are reduced pursuant to the financing order. The department may provide in such financing order that money from other sources, including proceeds of charges assessed customers of municipal electric companies, transferred to the trustee under the indenture and intended to be used to pay debt service on the bonds shall be taken into account in making adjustments to the competitive transition assessment pursuant to subdivision (2) of subsection (b) of section 16-245i if such payment is not made from General Fund revenues and would not adversely affect the tax status or credit rating of economic recovery revenue bonds.]
[(c)] (b) The department, during the period commencing on January 1, 2011, and ending June 30, 2011, shall assess or cause to be assessed a charge per kilowatt hour of electricity sold to each end use customer of an electric distribution company and shall cause such assessments to be remitted to the General Fund. The department shall set such charge at a level which the department estimates will generate forty million dollars during the period it is assessed. Such charge shall not be assessed after June 30, 2011.
Sec. 4. Subsection (c) of section 16-245g of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011):
(c) The competitive transition assessment shall be determined by the department in a general and equitable manner and [, in accordance with the provisions of subsection (b) of section 16-245f,] shall be imposed on all customers at a rate that is applied equally to all customers of the same class in accordance with methods of allocation in effect on July 1, 1998, provided the competitive transition assessment shall not be imposed on customers receiving services under a special contract which is in effect on July 1, 1998, until such special contract expires. The competitive transition assessment shall be imposed beginning on January 1, 2000, on all customers receiving services under a special contract which is entered into or renewed after July 1, 1998. The competitive transition assessment shall have a generally applicable manner of determination that may be measured on the basis of percentages of total costs of retail sales of electric generation services. [Subject to the provisions of subsection (b) of section 16-245f, the] The competitive transition assessment shall be payable by customers on an equal basis on the same payment terms and shall be eligible or subject to prepayment on an equal basis. Any exemption of the competitive transition assessment by customers under a special contract shall not result in an increase in rates to any customer.
Sec. 5. Subsections (a) and (b) of section 16-245h of the general statutes are repealed and the following is substituted in lieu thereof (Effective July 1, 2011):
(a) The competitive transition assessment described in subparagraph (A) of subdivision (2) of subsection (a) of section 16-245e shall constitute transition property when, and to the extent that, a financing order authorizing such portion of the competitive transition assessment has become effective in accordance with sections 16-245e to 16-245k, inclusive, and the transition property shall thereafter continuously exist as property for all purposes with all of the rights and privileges of sections 16-245e to 16-245k, inclusive, for the period and to the extent provided in the financing order, but in any event until the rate reduction bonds are paid in full, including all principal, interest, premium, costs, and arrearages on such bonds. Prior to its sale or other transfer by the electric company or electric distribution company pursuant to sections 16-245e to 16-245k, inclusive, transition property, other than transition property in respect of [the economic recovery transfer or in respect to disbursements to] the General Fund to sustain funding of conservation and load management and renewable energy investment programs, shall be a vested contract right of the electric company or electric distribution company, notwithstanding any contrary treatment thereof for accounting, tax, or other purpose. Transition property in respect of disbursements to the General Fund to sustain funding of conservation and load management and renewable energy investment programs shall immediately upon its creation vest solely in the financing entity. [Transition property in respect to the economic recovery transfer shall immediately upon its creation vest solely in the financing entity.] The electric company or electric distribution company shall have no right, title or interest in transition property in respect [to the economic recovery transfer or in respect] of disbursements to the General Fund to sustain funding of conservation and load management and renewable energy investment programs, and in respect of such transition property shall be only a collection agent on behalf of the financing entity.
(b) Any surplus competitive transition assessment described in subparagraph (A) of subdivision (2) of subsection (a) of section 16-245e in excess of the amounts necessary to pay principal, premium, if any, interest and expenses of the issuance of the rate reduction bonds [issued prior to January 1, 2002, after such bonds have been defeased or paid in full, shall be remitted to the finance authority who shall apply such charges to the payment of economic recovery revenue bonds and cause such charges to be credited against the payment obligation in respect to the economic recovery revenue bonds of the customers making such excess payments. If the economic recovery revenue bonds are not issued, the finance authority shall transfer such excess charges to the General Fund. Any surplus competitive transition assessment described in subparagraph (A) of subdivision (2) of subsection (a) of section 16-245e in excess of the amounts necessary to pay principal, premium, if any, interest and expenses of the issuance of the rate reduction bonds issued on or after May 1, 2010,] shall be remitted to the financing entity and may be used to benefit customers [. No funds shall be remitted, applied or used in accordance with the terms of this subsection if such remittance, application or use would] if this would not result in a recharacterization of the tax, accounting, and other intended characteristics of the financing, including, but not limited to, the following:
(1) Avoiding the recognition of debt on the electric company's or the electric distribution company's balance sheet for financial accounting and regulatory purposes;
(2) Treating the rate reduction bonds as debt of the electric company or electric distribution company or its affiliates for federal income tax purposes;
(3) Treating the transfer of the transition property by the electric company or electric distribution company as a true sale for bankruptcy purposes; or
(4) Avoiding any adverse impact of the financing on the credit rating of the rate reduction bonds or the electric company or electric distribution company.
Sec. 6. Subsections (a) and (b) of section 16-245i of the general statutes are repealed and the following is substituted in lieu thereof (Effective July 1, 2011):
(a) The department may issue financing orders in accordance with sections 16-245e to 16-245k, inclusive, [to fund the economic recovery transfer,] to sustain funding of conservation and load management and renewable energy investment programs by substituting disbursements to the General Fund from proceeds of rate reduction bonds for such disbursements from the Energy Conservation and Load Management Fund established by section 16-245m and from the Renewable Energy Investment Fund established by section 16-245n, and to facilitate the provision, recovery, financing, or refinancing of stranded costs. [Except for a financing order in respect to the economic recovery revenue bonds, a] A financing order may be adopted only upon the application of an electric company or electric distribution company, pursuant to section 16-245f, and shall become effective in accordance with its terms only after the electric company or electric distribution company files with the department the electric company's or the electric distribution company's written consent to all terms and conditions of the financing order. [Any financing order in respect to the economic recovery revenue bonds shall be effective on issuance.]
(b) (1) Notwithstanding any general or special law, rule, or regulation to the contrary, except as otherwise provided in this subsection with respect to transition property that has been made the basis for the issuance of rate reduction bonds, the financing orders and the competitive transition assessment shall be irrevocable and the department shall not have authority either by rescinding, altering, or amending the financing order or otherwise, to revalue or revise for rate-making purposes the stranded costs, or the costs of providing, recovering, financing, or refinancing the stranded costs, [the amount of the economic recovery transfer] or the amount of disbursements to the General Fund from proceeds of rate reduction bonds substituted for such disbursements from the Energy Conservation and Load Management Fund established by section 16-245m and from the Renewable Energy Investment Fund established by section 16-245n, determine that the competitive transition assessment is unjust or unreasonable, or in any way reduce or impair the value of transition property either directly or indirectly by taking the competitive transition assessment into account when setting other rates for the electric company or electric distribution company; nor shall the amount of revenues arising with respect thereto be subject to reduction, impairment, postponement, or termination.
(2) Notwithstanding any other provision of this section, the department shall approve the adjustments to the competitive transition assessment as may be necessary to ensure timely recovery of all stranded costs that are the subject of the pertinent financing order, and the costs of capital associated with the provision, recovery, financing, or refinancing thereof, including the costs of issuing, servicing, and retiring the rate reduction bonds issued to recover stranded costs contemplated by the financing order and to ensure timely recovery of the costs of issuing, servicing, and retiring the rate reduction bonds issued to sustain funding of conservation and load management and renewable energy investment programs contemplated by the financing order. [, and to ensure timely recovery of the costs of issuing, servicing and retiring the economic recovery revenue bonds issued to fund the economic recovery transfer contemplated by the financing order.]
(3) Notwithstanding any general or special law, rule, or regulation to the contrary, any requirement under sections 16-245e to 16-245k, inclusive, or a financing order that the department take action with respect to the subject matter of a financing order shall be binding upon the department, as it may be constituted from time to time, and any successor agency exercising functions similar to the department and the department shall have no authority to rescind, alter, or amend that requirement in a financing order. Section 16-43 shall not apply to any sale, assignment, or other transfer of or grant of a security interest in any transition property or the issuance of rate reduction bonds under sections 16-245e to 16-245k, inclusive.
Sec. 7. Subsection (a) of section 16-245j of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011):
(a) A financing entity may issue rate reduction bonds upon approval by the department in the pertinent financing order. Rate reduction bonds shall be nonrecourse to the credit or any assets of the electric company [,] or electric distribution company, [or the finance authority,] other than the transition property as specified in the pertinent financing order.
Sec. 8. Subsection (c) of section 16-245j of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011):
(c) (1) Financing orders and rate reduction bonds shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the financing entity, shall not constitute a pledge of the full faith and credit of the state or any of its political subdivisions, other than the financing entity, but shall be payable solely from the funds provided under sections 16-245e to 16-245k, inclusive, and shall not constitute an indebtedness of the state within the meaning of any constitutional or statutory debt limitation or restriction and, accordingly, shall not be subject to any statutory limitation on the indebtedness of the state and shall not be included in computing the aggregate indebtedness of the state in respect to and to the extent of any such limitation. This subsection shall in no way preclude bond guarantees or enhancements pursuant to sections 16-245e to 16-245k, inclusive. All rate reduction bonds shall contain on the face thereof a statement to the following effect: "Neither the full faith and credit nor the taxing power of the State of Connecticut is pledged to the payment of the principal of, or interest on, this bond."
(2) The issuance of rate reduction bonds under sections 16-245e to 16-245k, inclusive, shall not directly, indirectly, or contingently obligate the state or any political subdivision thereof to levy or to pledge any form of taxation therefor or to make any appropriation for their payment.
(3) The exercise of the powers granted by sections 16-245e to 16-245k, inclusive, shall be in all respects for the benefit of the people of this state, for the increase of their commerce, welfare, and prosperity, and as the exercise of such powers shall constitute the performance of an essential public function, neither the finance authority, any electric company or electric distribution company, any affiliate of any electric company or electric distribution company, any financing entity, or any collection or other agent of any of the foregoing shall be required to pay any taxes or assessments upon or in respect of any revenues or property received, acquired, transferred, or used by the finance authority, any electric company or electric distribution company, any affiliate of any electric company or electric distribution company, any financing entity, or any collection or other agent of any of the foregoing under the provisions of sections 16-245e to 16-245k, inclusive, or upon or in respect of the income therefrom, and any rate reduction bonds shall be treated as issued by or on behalf of a public instrumentality created under the laws of the state for purposes of chapter 229.
(4) [(A)] The proceeds of any rate reduction bonds [, other than economic recovery revenue bonds,] shall be used for the purposes approved by the department in the financing order, including, but not limited to, disbursements to the General Fund in substitution for such disbursements from the Energy Conservation and Load Management Fund established by section 16-245m and from the Renewable Energy Investment Fund established by section 16-245n, the costs of refinancing or retiring of debt of the electric company or electric distribution company, and associated federal and state tax liabilities; provided such proceeds shall not be applied to purchase generation assets or to purchase or redeem stock or to pay dividends to shareholders or operating expenses other than taxes resulting from the receipt of such proceeds.
[(B) The proceeds of any economic recovery revenue bonds shall be used for the purposes approved by the department in the financing order, including, but not limited to, funding the economic recovery transfer, provided such proceeds shall not be applied to purchase generation assets or to purchase or redeem stock or to pay dividends to shareholders or operating expenses other than taxes resulting from the receipt of such proceeds.]
(5) Rate reduction bonds are made and declared (A) securities in which all public officers and public bodies of the state and its political subdivisions, all insurance companies, state banks and trust companies, national banking associations, savings banks, savings and loan associations, investment companies, executors, administrators, trustees and other fiduciaries may properly and legally invest funds, including capital in their control or belonging to them, and (B) securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is now or may be authorized.
(6) Rate reduction bonds [, other than economic recovery revenue bonds,] shall mature at such time or times approved by the department in the financing order; provided that such maturity shall not be later than December 31, 2011. [Economic recovery revenue bonds shall mature at such time or times approved by the department in the financing order, provided such maturity shall not be later than eight years after the date of issuance, provided such maturity may be extended for economic reasons, upon the advice of the financing entity.]
(7) Rate reduction bonds issued and at any time outstanding may, if and to the extent permitted under the indenture or other agreement pursuant to which they are issued, be refunded by other rate reduction bonds.
Sec. 9. Subsection (e) of section 16-245j of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011):
(e) [In conjunction with the issuance of economic recovery revenue bonds or state rate reduction bonds] When the state is the authorized financing entity: (1) The Treasurer may enter into a trust indenture for the benefit of holders of the rate reduction bonds with a corporate trustee, which may be any trust company or commercial bank qualified to do business within or without the state; such trust indenture shall be consistent with the financing order and may contain such other provisions as may be appropriate including those regulating the investment of funds and the remedies of bondholders; (2) the Treasurer may make representations and agreements for the benefit of the holders of rate reduction bonds to make secondary market disclosures; (3) the Treasurer may enter into interest rate swap agreements and other agreements for the purpose of moderating interest rate risk on rate reduction bonds as permitted elsewhere within sections 16-245e to 16-245k, inclusive, provided the obligations under such agreements are payable from the transition property; (4) the Treasurer may enter into such other agreements and instruments to secure the rate reduction bonds as provided in sections 16-245f to 16-245k, inclusive; and (5) the Treasurer may take such other actions as necessary or appropriate for the issuance and distribution of the rate reduction bonds pursuant to the financing order and the Treasurer and the Secretary of the Office of Policy and Management may make representations and agreements for the benefit of the holders of the rate reduction bonds which are necessary or appropriate to ensure exclusion of the interest payable on the rate reduction bonds from gross income under the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as from time to time amended.
Sec. 10. Subsection (l) of section 16-245k of the general statutes is repealed and the following is substituted in lieu thereof (Effective July 1, 2011):
(l) The authority of the department to issue financing orders pursuant to sections 16-245e to 16-245k, inclusive, shall expire on December 31, 2008. [, with respect to bonds other than economic recovery revenue bonds. The authority of the department to issue financing orders pursuant to sections 16-245e to 16-245k, inclusive, with respect to economic recovery revenue bonds shall expire on December 31, 2012.] The expiration of the authority shall have no effect upon financing orders adopted by the department pursuant to sections 16-245e to 16-245k, inclusive, or any transition property arising therefrom, or upon the charges authorized to be levied thereunder, or the rights, interests, and obligations of the electric company or electric distribution company or a financing entity or holders of rate reduction bonds pursuant to the financing order, or the authority of the department to monitor, supervise, or take further action with respect to the financing order in accordance with the terms of sections 16-245e to 16-245k, inclusive, and of the financing order.
Happyness is a Hot DW and a pile of used brass!!! Rich
November 14, 2009
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My Company's first response
Proposed Connecticut tax would cost Millstone $300 million a year
(March 24, 2011 )
The Energy & Technology Committee of the Connecticut General Assembly narrowly passed Senate Bill 1176, a bill that has potential for serious consequences for Millstone. The bill will be presented to the Finance Committee for further action.
Dominion strongly opposes the bill, which calls for a tax of 2 cents tax per kilowatt-hour of electricity generated at Millstone. Other generators in the state fueled by oil and coal would pay lower tax rates.
The proposed tax translates into a more than $300 million annual tax bill for Millstone – a new tax in addition to the taxes Millstone already pays.
“This is a case of the state asking one major business to disproportionately help solve the state’s spending problems,” David Christian, CEO-Dominion Generation, said in a letter to Millstone employees. “It also is important to understand this bill is a tax each time we generate a kilowatt of electricity for the people of Connecticut – something out-of-state generators would not pay.
“This discriminatory and confiscatory tax will directly hurt all consumers in Connecticut by choking current business operations in Connecticut’s power sector and driving off new investments. Policy like this will undoubtedly lead to higher rates for electricity and hurt the overall economy of the state.”
During a hearing on the bill, the company testified that if this bill or a similar bill passes, then Millstone would be operating at a loss.
“If we reach that point,” Christian said, “the company has the responsibility to its shareholders to cease operations at Millstone until economic conditions improve. This would not be an easy decision for the company to make.”
Dominion is taking every step to fight this bill. The Government Relations staff is meeting with Connecticut legislators to impress upon them the serious consequences of this bill passing.
Happyness is a Hot DW and a pile of used brass!!! Rich
November 14, 2009
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Then came this:
Dominion: Tax could shutter Millstone
By JC REINDL Day Staff Writer
Publication: The Day
Updated 04/02/2011 10:23 PM
Rep. Vickie Nardello, D-Prospect, accused plant owner Dominion Resources Inc., of Richmond, Va., of posturing and deploying a "fear tactic."
"The threat that they will close the plant is an empty threat," Nardello said.
She and fellow Democratic Sen. John Fonfara of Hartford are the co-chairmen of the legislature's Energy and Technology Committee, which voted 12-9 last week to move forward a bill that would impose various taxes on generators that use oil, coal and nuclear power. Natural gas and alternative energy sources would be exempt.
Millstone's two working reactors comprise the sole operational nuclear-power generation plant in Connecticut. Dominion has owned the facility since 2001.
Proponents say the bill would raise revenue, help fund alternative energy systems and provide relief to consumers.
But Dominion officials say the tax would be overly burdensome on nuclear power. Of the $340 million the tax is projected to raise, $330 million would come from Millstone, the company said.
"If this bill passes, the Millstone power station will not be economically viable to operate and it will be shut down," Dominion spokesman Ken Holt said Friday.
Nardello said she doubts claims that the new tax would devastate the plant's finances. After reviewing Dominion's corporate and regulatory filings, she said, she believes the nuclear plant has for years been highly profitable for the company and would stay in the black even with the proposed taxes.
"They had profits over the years that are far and above all the other operators," she said.
Nardello also said she believes that grid operator ISO New England would ultimately step in to prevent a Millstone shutdown.
The company spokesman disagreed with the representative's assessments.
"That's interesting that she feels that way," Holt said. "She must have a different look at our books than we do."
Nardello said she has asked to see the company's books, but was rebuffed.
Colleen Flanagan, spokeswoman for Gov. Dannel P. Malloy, said the governor met with Dominion officials in his office Friday morning. She did not elaborate on the outcome.
"It was a good meeting and an ongoing dialogue about energy issues in our state," she said.
If the bill becomes law, Millstone would owe 2 cents a kilowatt hour, which the company says adds up to $330 million a year.
Plants that run on coal would be taxed one-half cent per kilowatt hour and energy producers that run on oil would be charged one half of one-tenth of a cent.
The bill that passed the energy and technology committee provides for much higher tax levels on generators than the governor proposed in his budget.
Malloy's budget called for a new tax of two-tenths of one cent per kilowatt hour that would apply to all electricity generators. Dominion estimates that proposal would have cost the Millstone station about $33 million a year.
"This bill is squarely aimed at Millstone," Holt said of the legislature's version. "It's a large burden to place on any one company."
Rep. Betsy Ritter, D-Waterford, is strongly opposed to the bill, and as a member of the energy and technology committee she tried unsuccessfully to stop it.
Ritter said the Millstone station is crucial to the economic livelihood of Waterford and that a closure would devastate the area.
She also expressed concern that electricity generators could pass on the cost of the new tax to ratepayers. And even if consumers dodge a rate hike, the tax could become an incentive to cut corners on nuclear plant safety, she said.
"As for a business policy, (the tax) makes absolutely no sense at all if we want to have an economic future," Ritter said.
Holt said Millstone directly employs 1,080 people and 350 supplemental personnel. The facility is responsible for roughly $1.2 billion annually in economic benefits to Connecticut, he said.
The bill was referred Friday to the Office of Legislative Research and Office of Fiscal Analysis. Dominion began notifying employees last week that the tax could force the facility to close.
John Markowicz, executive director of the Southeastern Connecticut Enterprise Region, said the proposed tax could stymie future efforts to build new nuclear plants in Connecticut.
Company officials say the operating Millstone reactors have the capacity to meet nearly 50 percent of Connecticut's energy needs.
Markowicz said it's unclear what type of energy would fill the void when the reactors are decommissioned. The operating license for the plant's Unit 2 reactor expires in 2035 and the license for Unit 3 ends a decade later.
Happyness is a Hot DW and a pile of used brass!!! Rich
November 14, 2009
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This came 4/6/2011
“That’s absolutely an issue,” Ken Holt, spokesman for Dominion Resources Inc., parent company of the Waterford plant, said Monday. “We’re looking at how many people it would require to operate the plant safely in the event of a shutdown.”
The impact on Eastern Connecticut’s workforce, as well as the price of electricity statewide, are critical issues, local business leaders said Monday. Connecticut already has the second highest electricity rates in the nation, and a shutdown of its largest generator would likely push prices higher.
“We’re very concerned,” Chamber of Commerce of Eastern Connecticut President and CEO Tony Sheridan said. “This is bound to have a ripple effect through the economy. I’m especially concerned about the loss of high-quality jobs in our area.”
1,080 employed
Dominion employs 1,080 workers at Millstone. Another 350 work there as employees of other firms in what Holt calls the supplemental workforce.
A group of the state’s eight largest chambers of commerce, which includes the Eastern chamber, has published a statement opposing the tax measure, Sheridan said. The group, known as the Metropolitan Chambers of Commerce of Connecticut, includes business leaders from Hartford, New Haven and Fairfield counties. The Southeastern Connecticut Council of Governments, which consists of mayors, first selectmen and town managers from more than 20 communities, is planning to write a letter opposing the tax plan, Sheridan said.
The $330 million tax, contained in Senate Bill 1176 passed by the General Assembly’s Energy and Technology Committee last month, is aimed at Millstone’s production so a shutdown would mean it would not have to pay any of that tax.
Gov. Dannel P. Malloy, who met with Dominion executives Friday, is backing Senate Bill 1007, spokeswoman Juliet Manalan said Monday. That bill would put generation taxes of $33 million on Millstone, Holt said. Dominion also opposes Senate Bill 1007, he said.
Virginia-based Dominion continues to view a shutdown as temporary, Holt said.
“We would do it until economic conditions improve,” he said.
Millstone already pays $33.6 million in taxes per year, Holt said. The largest portion of that is $17.7 million in property taxes to the Town of Waterford.
Timeframe considered
Operators are studying how much time it would take between the bill becoming law and the plant shutting down, Holt said. Millstone shut its Unit 2 on Saturday as part of a planned refueling outage. The unit is likely to be down for a month, Holt said Monday. Its other functioning reactor, Unit 3, is operating at 100 percent capacity, he said. Unit 1 has been decommissioned.
State government should be encouraging Dominion to add to its production capabilities, said John Markowicz, executive director of the Southeastern Connecticut Enterprise Region Corp., a New London-based economic development agency. There is room for three more reactors on the Millstone property.
“Instead of discouraging this investment through an onerous tax, Connecticut should be doing the direct opposite and creating thousands of construction and operating jobs that would result,” he wrote in an email. “Are ‘we open for business’ or getting ready to turn out the lights?”
Both Markowicz and Sheridan say the Millstone tax idea cuts against Gov. Malloy’s stated intention to make Connecticut “more business friendly.”
Dominion has declined to say if it’s actively looking to sell Millstone or sell it in the event that the tax goes through. Holt said last week the $330 million tax would cause Millstone to become unprofitable. Dominion bought Millstone for $1.3 billion 10 years ago.
Read more: Millstone considers furloughs, layoffs in shutdown plans - Norwich, CT - Norwich Bulletin http://www.norwichbulletin.com/archive/x230253139/Millstone-mulls-furloughs-layoffs-in-shutdown-plans#ixzz1Iq1UCtcI
Happyness is a Hot DW and a pile of used brass!!! Rich
November 14, 2009
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Todays paper 4/7/2011
Millstone ''shutdown'' seen as doubtful
Publication: The Day
Dominion is going on the offensive with arguments that it would have to shut down Millstone Power Station to avoid a proposed $330 million state tax, but the state's consumer advocate remains skeptical.
Dominion is running full-page ads in newspapers and setting up a public meeting for Monday in Waterford on the proposed legislation and other nuclear issues. But on Wednesday, the state's Office of Consumer Counsel, which supports the proposed Senate Bill 1176, insisted that the nuclear complex owner can afford to absorb the tax.
Lawmakers are proposing to tax the electric output of nuclear, oil and coal plants, putting the highest rate of 2 cents a kilowatt hour on Millstone. Dominion counters that if the tax passes, it would need to close one or both of its reactors indefinitely and lay off or furlough most of its 1,080-person work force until the economic climate changes.
Some 350 independent contractors would also be affected, the company said.
Since Millstone is no longer a publicly regulated utility in Connecticut, the attorney general's office could not compel its owners to keep it running, said Susan Kinsman, a spokeswoman for Attorney General George C. Jepsen.
Joe Rosenthal, a principal analyst for the Office of Consumer Counsel, insists that the high-flying electricity market in Connecticut is too attractive for Dominion to abandon. In his analysis, he relied on earnings reports, knowledge of the electric markets and the price of uranium fuel.
"The bottom line is, (Dominion) is going to remain profitable at the 2-cent (tax) level," Rosenthal argued. "They'll just keep doing what they're doing and make less money. And they're not going to fire people. I don't know if you can willy-nilly let go of nuclear expertise and then get it back later."
'Incredible burden'
Dominion spokesman Ken Holt disputed that assessment. "Apparently, the Office of Consumer Counsel doesn't believe we're serious," Holt said. "We're in the business of making money, not in the business of playing games. This tax represents an incredible burden on Millstone, and if passed, Millstone will no longer be economically viable."
Dominion has commitments to provide power from Millstone through 2014, said Marcia Blomberg, a spokesperson for ISO New England, which manages the region's wholesale electric market. Millstone's two reactors generate 2,100 megawatts of electricity - enough to supply nearly 50 percent of the power needs of the state. ISO-New England must have adequate resources to operate its grid reliably, but if Millstone withdrew, the agency would look to other energy sources, Blomberg said.
Dominion, meanwhile, launched an attack against the proposed legislation in full-page ads in newspapers on Wednesday, including The Day and The Hartford Courant. The ad says Connecticut consumers pay 20 percent more for their electricity than neighboring New England states and asks citizens to fight a "bad idea" because the proposed tax will drive up electric rates, cost jobs and hurt the economy.
Consumer Counsel Mary Healey disputed that in testimony at the Capitol last month, saying the tax has been "carefully calibrated so as to avoid 'pass-through' (to consumers) of the tax by generators. ... The difference between the ISO New England market clearing price and Millstone's estimated costs of operations easily exceeds 2 cents per kilowatt hour" for most of the year.
Dan Weekley, vice president of government affairs at Dominion, said earlier this week that if Millstone reactors were shut down, the company would not need most of its employees to maintain the plants in a safe, shutdown mode.
Even if the reactors stop operating, Dominion has ways to meet its obligations for contracts it has already signed for power, which is sold into the wholesale market, he said.
For instance, Dominion could rely on electric output from its nuclear reactors in Wisconsin and Virginia and buy electricity on the open market to meet its contractual obligations, Weekley said.
Too risky?
"They're not going to take all of these risks," insisted Rosenthal. "And if they even tried to play this game, we would go to (the Federal Energy Regulatory Commission) and seek to have their market-based rate authority taken."
That market-based authority allows Dominion to operate as a "merchant plant" in a competitive, deregulated market.
At least one analyst was also unsure Dominion would close the reactors if the tax is enacted.
St. Louis-based Edward Jones analyst Andrew C. Pusateri said the market "doesn't seem too concerned" with the political battle under way in Connecticut. Dominion stock has been up this week, and closed Wednesday 26 cents higher, at $45.03. Pusateri said both sides appeared to be relying on rhetoric to make their case.
"There's some truth both ways," Pusateri said. "The fact the tax is directed almost entirely at Dominion seems a bit unfair. Dominion's reaction (to close), they know their company better than analysts, it's a decision that takes some time to make. I wouldn't be surprised, long term, if they wouldn't be able to keep those plants running even with the tax. Or maybe it won't come to fruition, and they won't have to pay a tax that large."
A New York-based analyst noted, however, that after costs to operate Millstone and the proposed tax are added together, the company would do only a little better than break even in annual revenue, justifying its call to shutter two reactors if lawmakers' proposal passes.
"You end up with almost nothing to cover associated costs for running the plant, so the threat that Dominion is voicing is justified by the economics of power generation from the plant," said Angie Storozynski, an analyst with the investment bank Macquarie Capital Inc.
Dominion plans to make its case publicly Monday at a 7 p.m. meeting at Waterford Town Hall. Other topics on the agenda include Dominion's routine shutdown this week of Millstone's Unit 2 reactor for refueling and the company's response to the Fukushima nuclear troubles in Japan.
Happyness is a Hot DW and a pile of used brass!!! Rich
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January 24, 2009
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So if I'm reading this right, a group of Democrat Senators have decided that this power plant makes too much profit & it's about time to spread the wealth. Why am I not surprised?
I think that Dominion should shut down the Millstone plant even if it's just for a couple days, as sort of a preview of what things would be like if they decided to shut it down for good. It's a business after all, and if they aren't allowed to make a profit, then why should they bother to remain in the game?
On a side note, I'm surprised that they're focusing this tax idea toward a nuclear plant instead of a coal plant, as seen in the cap & tax rule book.
November 14, 2009
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Yah, isn't it great.
A New York-based analyst noted, however, that after costs to operate Millstone and the proposed tax are added together, the company would do only a little better than break even in annual revenue, justifying its call to shutter two reactors if lawmakers' proposal passes.
"You end up with almost nothing to cover associated costs for running the plant, so the threat that Dominion is voicing is justified by the economics of power generation from the plant," said Angie Storozynski, an analyst with the investment bank Macquarie Capital Inc.
Happyness is a Hot DW and a pile of used brass!!! Rich
January 8, 2011
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This interest me since I spent 37 years working for Alabama Power Co., a public regulated utility. The Public Utility Commission regulates the rates APC can charge their customers. APC is permitted to make 13-14 % return on equity. This gives APC a generous return and in fact APC has reduced their power rates 4 times in the past 2 years. Alabama Power is in the lower quartile in rates of all public utility companies. That's how we landed Mercedes, Honda, Hyundai and Toyota to build auto plants in Alabama, not to mention all the suppliers for these plants.
Alabama Power is owned by The Southern Company composed by APC, Mississippi Po.Co. Georgia Po.Co., Gulf Po. Co. Southern Services (a service company) Savannah Po.Co., and Southern Nuclear Co. We have a nuclear plant in Alabama. Take a look at all the industry Ala. has brought to the state partly because it has low utility rates, a right to work state and a good work force. It makes no sense to be unfriendly to industry.
You know what some say, "build and they will come," Pi$$ 'em off and they will leave." Wonder why some politicians can't understand that?
Hossman 
November 14, 2009
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Hoss,
Thanks for your reply. I've been having fun with it at work, and may rattle some heads in state government too. Of course, I'll keep your identity private. My supervisor said he's been down there and drove by the Hyundia plant, and said it must be 1.5 miles long.
We are still spinning the political wheel up here with this issue. I'm starting to think I should have taken the early retirement package they offered me in January at the age of 54. 
Happyness is a Hot DW and a pile of used brass!!! Rich
November 14, 2009
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Tax on utilities will hurt economy
By TONY SHERIDAN
Publication: The Day
It is critically important for the residents of eastern Connecticut and the rest of the state to realize the damage that will be done to our efforts to create jobs and to grow our economy if Senate Bill 1176 is passed.
My colleagues at the metro chambers enthusiastically endorse both vital agendas and emphasize that the proposed legislation will undermine both and, indeed, increase the cost of electricity and incent employers to reduce jobs in Connecticut. Specifically, the proposal would increase the contracted cost of energy by imposing a per-kilowatt-hour tax on nuclear-powered, oil-powered and coal-fueled generation as follows:
• Two cents per kilowatt hour on nuclear-powered generation
• Five-one-hundreths of 1 cent per kilowatt hour on oil-powered generation
• One-half cent on coal-fueled generation during peak-usage months (January, February, June, July and August).
The total fiscal impact of this tax on electric generators is about $342 million, primarily applied to Millstone Power Station based in Waterford, while the governor's proposed generator tax does not exceed $58 million.
Future investments at risk
The detrimental impact of this targeted policy will ultimately discourage the diversification of, and future investment in, our generation sources. Given the ongoing turmoil in the Mideast and its potential impact on the availability and cost of oil, it is critical that we encourage such critical diversification and capital investment.
I also note that no other state has a tax of this kind, particularly one that targets certain companies in a single industry. The federal government and a few other states, including New York, New Hampshire, California and Vermont have considered and summarily rejected similar proposals in recent history. Certainly, the national media coverage of this issue has already reverberated across borders, dealing a major blow to our job retention and creation ability.
In addition to growing jobs and our economy, our collective focus should be on investments in capacity and reliability, including plant and transmission line upgrades, and the encouragement of diverse energy sources and alternative energy research and development. For all of these reasons, we urge our state legislature to oppose Senate Bill 1176.
Editor's note: The writer is president and CEO of the Eastern Connecticut Chamber of Commerce. This commentary was signed by five other Chamber of Commerce presidents and chief executive officers - Oz Griebel of MetroHartford Alliance, Larry McHugh of the Middlesex County Chamber, Michael Necastro of Central Connecticut Chambers, Anthony Resigno of the Greater New Haven Chamber and Lynn Ward of the Waterbury Regional Chamber.
Happyness is a Hot DW and a pile of used brass!!! Rich
November 14, 2009
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Price Of Success In Connecticut
Utility deregulation was exercised on the belief that the energy market was lucrative and companies would flock to build new generation stations to capture a piece of it. One problem, very few companies were willing to invest millions of dollars to compete in the deregulated energy market. Even fewer were willing to build base-load facilities that provide the constant source of power that is essential to both domestic and industrial existence.
Dominion, however, invested $1.3 billion in Millstone, which many financial analysts thought was a fiscal calamity. Now, nearly 11 years later in the deregulated market that the state government created, some legislators believe Millstone is too successful and want Dominion to pay an exorbitant tax of $330 million a year. It is unimaginable that this is the outcome for a company that invested more than a billion dollars in a Connecticut business, saved more than 1,000 high-paying jobs and currently provides half of the energy that powers Connecticut.
The state must find a means to balance its budget without decimating its successful businesses that are vital for sustaining a healthy economy.
Happyness is a Hot DW and a pile of used brass!!! Rich
December 26, 2010
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mox-ct said:
The state must find a means to balance its budget without decimating its successful businesses that are vital for sustaining a healthy economy.
Here's a novel idea for the politicians. They could spend less.
Sorry you're going through this. It is really disappointing that politicians (who probably have no real world experience. When did becoming politician become a career choice?) think it is okay to rape and pillage businesses.
November 14, 2009
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Latest new article:
Dominion, state differ over profit numbers on which new tax is based
Publication: The Day
Consumer counsel making incorrect assumptions, Millstone owner contends
The owner of Millstone Power Station said Friday that the estimated profit margins used as a basis for a proposed tax on electricity are inflated, but the state's consumer advocate stands by the numbers.
Millstone owner Dominion has said the company will shut down one or both of its operating reactors in Waterford if lawmakers' proposed $332 million tax is approved. The tax represents 2 cents per kilowatt hour on more than 16 million megawatts of generation a year. Lesser tax rates are also proposed for coal and oil generation in Connecticut.
Since the company does not have to open its books to the public, lawmakers and Mary Healey, the state's consumer counsel, have relied on estimates of Millstone profit margins as they've studied the issue, Healey said.
This year, they've determined that, if taxed at $332 million, Millstone's owner would still clear profit margins of between $190 million and $700 million.
The profit margins constitute the difference between the price for which electricity was sold and the cost to make it. The state Office of Consumer Counsel is just corroborating the figures for lawmakers, she added. A variety of consultants she would not name helped compile that analysis, she said.
If the tax is approved, counters Dominion spokesman Ken Holt, "we will be making little or no profit, or even losing money."
"And I don't think anybody wants a nuclear power plant operating on low margins," Holt said. "The owners before us did that, and I don't think anybody wants that because we are a safe operator."
Northeast Utilities, the previous owner of the Millstone complex, was forced to shut down the reactors in the mid-1990s after federal findings of mismanagement.
Holt declined to specify what would constitute an unacceptably low profit margin.
Healey insisted that her agency's estimates of Dominion's past annual profit margins, which ranged between $298 million and $975 million over the past decade, are reliable.
According to a financial spreadsheet provided by the Office of Consumer Counsel to The Day, those annual margins are based on the past decade of public records of output for Millstone, an estimated average annual clearing price and estimated fixed costs. The analysis puts Millstone's annual profit margin at nearly $514 million last year.
The clearing price is the price bid by many electric generators in the wholesale spot market for a particular time period. Instead of bidding in the wholesale market, most of Dominion's power is hedged, said Holt. This means it is sold in advance at a fixed price and does not fluctuate in the spot market.
"Their assumptions are wrong, plain wrong," Holt insisted. "They're assuming our costs have remained flat over the last 10 years. Our business costs have not remained flat over the last 10 years. And their clearing price is not the price that we get for our electricity."
The Hartford-based Connecticut Business & Industry Association, which has 10,000 members, is opposing the proposed energy tax.
"Dominion pays taxes in other ways, and this attitude that exists with some that companies are just bottomless pits of money is ridiculous," said Bonnie Stewart, vice president of government affairs for CBIA. "That's not the case. Companies have choices where they locate. We don't want to discourage them from locating here."
The proposed tax is based on sound estimates, said Healey and Rich Sobolewski, her supervisor of financial analysis. Dominion should "step up to the plate and leave" some of their profits in Connecticut instead of in the hands of shareholders, either for electric ratepayer relief, a balanced budget or to promote conservation and renewables, she said.
"At first blush, I could understand why people say this is not fair to Dominion, that it's anti-business," she said. "But it really is an attempt to help provide relief to ratepayers in Connecticut and at the same time to still allow the company to make a healthy profit, which is their right, but not an excessive profit."
"The numbers done to calculate the tax show (Millstone's earnings) are excessive and haven't met the goal of reducing our electric rates in Connecticut," Healey said.
Earlier this week, state Sen. John Fonfara, D-Hartford, co-chairman of the legislature's Energy and Technology Committee, said the Office of Consumer Counsel and its consultants estimated that this year Millstone would earn $480 million before deducting for taxes and other expenses.
Based on the Virginia-based Dominion's own 2011 earnings guidance, that $480 million figure represents the bulk of some $581 million in earnings the company has projected for its New England-based nuclear and coal plants in 2011. Healey would not say how her staff and consultants arrived at that estimate, however.
"It's one year's result," said Sobolewski. "It's an estimate. That $480 million will probably be the lowest result they've had in a decade."
Fonfara could not be reached Friday to elaborate.
"They're suggesting that nuclear power is selling for five times as much as coal," said Holt. "That's incorrect. Their estimates for 2011 sound very favorable for collecting a tax, but they don't sound like they smack of reality."
Fonfara has also said the proposed legislation, which calls for the tax revenue to be used in part to reduce electric ratepayers' bills, will not pass on costs to those ratepayers.
A spokesperson for ISO New England, which manages the region's wholesale electric market, said Friday that if Dominion decided not to operate one or more reactors, not only could the agency not stop them, but ISO-New England's costs to replace those missing megawatts over the next three years would be passed on to ratepayers.
Happyness is a Hot DW and a pile of used brass!!! Rich
December 26, 2010
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mox-ct said:
Latest new article:
"'The state' determined that, if taxed at $332 million, Millstone's owner would still clear profit margins of between $190 million and $700 million."
As a CPA for 30 years and having done many financial projections and analyses, a range that large is a huge indicator that the numbers are highly suspect. Of all the projections I've seen, darn few ever prove to be remotely close when compared to subsequent actual results.
November 14, 2009
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Yeh, it sounds like some people in the legislator want a regulated market. Ha, Ha, Ha, Ha. They voted the regulated market away, Northeast Utilities was forced to sell it's Generating Units, (Millstone one of them). In the process, the Legislators sold the people of Millstone down the road when they helped to broker a deal between Northeast Utilities and Dominion in which our NU Retirement is was and still is frozen (doesn't collect any interest for us) but NU collects the interest.
The Legislators think we don't know what they are doing.... but we see it and know what they are doing. Too bad so many people vote party line and/or vote with little or no knowledge or don't vote at all.
Happyness is a Hot DW and a pile of used brass!!! Rich
November 14, 2009
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We've still got another week on this budget fight. There has been numerous news articles that I haven't posted, just too much to inandate ya'll with. Here is the latest. My companies stand is, they can accept a .0025 per kwh (kilo watt hour), but that should be applied to all generators, gas to electric, oil to electric, coal to elect, garbage to electric, etc. so every generator is being treated equally. The only problem with this is we are in a small state, so what about the out of state generators, they will have an advantage of .0025 per kwh cheaper. Malloy is the Gov.
Malloy sticking with energy-tax plan
By JC Reindl
Publication: The Day
Published 04/28/2011 12:00 AM
Updated 04/28/2011 09:59 AM
Hartford - Gov. Dannel P. Malloy stood firm Wednesday on his plan for a new flat tax on all major forms of electricity generation, despite claims by fellow Democrats that his approach would hurt ratepayers and fail to generate the money expected.
The temporary, two-year energy-generation tax in Malloy's budget is projected to collect $72 million annually by applying a flat tax - 0.0025 cents a kilowatt hour - on energy from nuclear, coal, natural gas and oil sources. About $40 million would come from just the Millstone Power Station in Waterford, the sole operational nuclear facility in Connecticut. Millstone says it is willing to absorb the cost.
However, the co-chairs of the legislature's energy committee say they know a better way to tax the generators.
State Rep. Vickie Nardello,
D-Cheshire, and Sen. John Fonfara, D-Hartford, presented their alternative plan at a news conference Wednesday morning and urged the governor and General Assembly leaders to support it.
They said their proposal, which offers a choice of three tiered levels of taxation, would raise more revenue for the state than the tax in Malloy's budget and, most crucially, wouldn't pass the higher costs along to ratepayers.
The co-chairs claimed that if Malloy doesn't change how his tax is structured, $50 million of the $72 million tax would get passed on to ratepayers, costing the average household $1.50 more per month.
Malloy's tax would also raise nearly $25 million less than projected for state coffers because "the generators will not run as often, and therefore that revenue will be lost," Fonfara said.
Malloy thanked the co-chairs for their efforts but said through his spokeswoman that he prefers the plan that's already in his budget proposal.
"The governor has asked and been very forthright about the shared sacrifice he is asking of everyone," Colleen Flanagan, Malloy's spokeswoman, said of the potential rate increase. "He needs to make the tough decisions to get our state back on track."
Nardello was not happy with the governor's stance.
"I would ask the governor to reconsider his position, since their proposal would require electricity rates to rise," she said.
While laying out the details of their alternative proposal earlier in the day, Nardello and Fonfara suggested that one must momentarily ignore the principles of Econ 101 to grasp how energy markets work in Connecticut.
"Energy markets are unlike any other markets. ... They do not follow the normal rules of supply and demand," Nardello said, continuing later, "This is an artificial market and therefore is subject to rules that you and I and John and everyone standing here never dreamed of."
That said, the two legislators argued that the problem with Malloy's flat-tax approach is that it's too costly for energy generated from natural gas. Because the price of natural-gas energy determines the rate set for all energy generators in Connecticut, too high a rate on natural gas could lift all prices to a higher threshold.
"If you tax the generator that sets the price, then the tax will be passed on to the ratepayer," Nardello said.
Yet if one goes easy on natural gas - as their proposal does - hundreds of millions of dollars can then be extracted from competing generators, such as from Millstone, without prompting an increase in rates.
There are three options in Nardello and Fonfara's alternative scheme. One raises $72 million in annual revenue, the second $100 million and the third $150 million. Nuclear generation would be taxed at the highest rate in each of the three options, followed by coal and then oil-generated electricity. Natural gas would be taxed at the lowest rate.
State Sen. Andrea Stillman, D-Waterford, said in a statement that the co-chairs' plan was "an anti-business initiative that unduly targets the Dominion Millstone Power Station."
Fonfara said he considers dead the energy committee's earlier tax proposal that would have raised about $340 million a year from generators, of which $332 million would come from Millstone. That proposal prompted Millstone's owner, Dominion, to say that it might shut down one or both of the running reactors for economic reasons.
A Dominion spokesman said the lowest tier in the co-chairs' new proposal would increase the firm's annual tax payment to $68 million, or $18 million more than what is in the governor's budget.
"Dominion has invested more than $600 million into Millstone since purchasing the station in 2001, improving the reliability and overall margin of safety. This is a strange way for these legislators to treat a company that has grown its business," the spokesman, Jim Norvelle, said.
State Rep. Betsy Ritter, D-Waterford, said the co-chairs' latest proposal is as unfair to Dominion as their first.
"This is really a slap on the head to what is for us a mainstay of the economy, and it's really sad to go after (Dominion) like that," Ritter said.
Shares of Dominion, the parent company of Dominion Nuclear Connecticut, which owns Millstone, was up 31 cents Wednesday, closing at 46.06.
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