‘We have to look to alternatives’: Could RI buy nuclear power to keep energy costs down?

• Rhode Island lawmakers are considering allowing Rhode Island Energy to sign long-term contracts for nuclear power from Millstone Power Station in Connecticut.
• The legislation would add nuclear as an option under the state’s renewable energy contracting law, despite nuclear power not being renewable.
• Supporters argue that nuclear power is a reliable and emissions-free source of energy that can help stabilize the region’s power grid.

PROVIDENCE – State lawmakers are looking to open the door for Rhode Island Energy to sign a long-term contract for nuclear power in a bid to lower electric rates and meet climate goals. 

While the electricity generated by nuclear reactors in New England has been an integral part of the region’s energy mix for decades, Rhode Island’s largest utility has never made a long-term commitment to buy output from them. 

But the change in the political landscape that has come with a new administration in Washington, D.C., among other factors, has made nuclear power a more attractive option to the company.  

The Trump administration’s crackdown on offshore wind development has left Rhode Island Energy and other utilities scrambling to find alternative sources of affordable, zero-carbon power that would allow them to comply with state clean energy mandates. 

“We are constantly looking for everything that we can,” said Rhode Island Energy president Greg Cornett. “The timing of this is more important because of where things stand with the offshore wind industry.” 

Of interest to the company are supplies from one of the two nuclear power plants that remain in New England: Millstone Power Station, the 2,100-megawatt facility operated by Dominion Energy in Waterford, Connecticut.  

Contracts that the plant signed with a pair of utilities in Connecticut are expiring in 2029 and Rhode Island Energy expects the process to find new buyers for the facility’s energy could start as early as the end of this year. 

Massachusetts amended its long-term contracting law for renewable energy last fall to clear the way for utilities in that state to buy nuclear power. Legislation recently introduced in the General Assembly would make a similar change to Rhode Island law. 

Would nuclear energy save ratepayers money?

The proposal comes at a delicate time for Rhode Island Energy. Electric rates have remained relatively high after spiking two and a half years ago, and a cold winter that drove up usage has left many customers fed up. More than 180 of them showed up at state offices last week for what would usually have been a routine hearing on one of the company’s twice-yearly rate changes. 

Cornett acknowledged the frustration and, while being careful not to overpromise on the benefits of nuclear, said he believes it may help with costs over the long term. 

“If we don’t believe it would be a savings for our customers, we won’t enter it,” he said of a contract with Millstone. 

Sen. David Tikoian and Rep. Joseph Solomon, lead sponsors of the nuclear bill, both cited cost savings in explaining why they introduced it. 

“One of the biggest complaints I’m hearing is the cost of energy,” said Solomon, a Warwick Democrat. “We have to look to alternatives.” 

But projecting savings is difficult. Right now, the two utilities in Connecticut, Eversource and Avangrid subsidiary United Illuminating Co., are paying Millstone owner Dominion Energy about 5 cents a kilowatt hour under 10-year contracts that went into effect in 2019. 

And while those agreements saved money in 2022 and other years when the price of power from natural gas-fired generators was higher, they’ve also saddled ratepayers with many millions of dollars of above-market costs when gas prices were lower, according to reports from Connecticut media. 

Tikoian acknowledged the uncertainty, saying, “If the utility can’t get attractive pricing for ratepayers, then they don’t have to proceed.”

Cornett said he expects prices in any new contracts with Millstone to be higher than current wholesale rates, driven up in part by demand from data centers, but he said that the agreements could still lead to savings down the line.  

Natural gas prices in New England are already higher on average than those in the rest of the nation and they could go up as electric usage increases. If the federal blockade breaks on offshore wind, contract prices for that source of power could also come in higher, making nuclear potentially more desirable. 

Just like in Massachusetts, the Rhode Island legislation adds nuclear as an option under the state’s long-term contracting law for renewable energy. Although nuclear is not renewable, it is a clean source of power that doesn’t produce planet-warming greenhouse gases. In that sense, it fits in with the goals of the Act on Climate, state law that requires Rhode Island to reach net-zero emissions by 2050. 

Cornett said it also makes sense to consider amending the law to open up public policy discussions about nuclear in the General Assembly, and later, if a contract were to move forward, before the state Public Utilities Commission. 

Possible payments to utility could be source of debate

One area of contention is sure to be language in the bill that would allow Rhode Island Energy to seek remuneration for signing long-term contracts under the law. 

As the statute is currently written, the utility is allowed to seek a payment of up to 1% of the value of any contract only through the end of next year. The legislation removes that sunset provision while still requiring final approval from the Public Utilities Commission for any incentives. 

Rhode Island Energy has long argued that carrying what can be decades-long power contracts on its books is a risk that credit rating agencies may frown upon. If there were an increase in borrowing costs, it would hurt the company’s bottom line, the thinking goes. 

But while the Public Utilities Commission awarded an incentive for the Block Island Wind Farm contract, it has more recently frowned upon remuneration and there’s no indication that the commission’s stance has changed. 

Paying the utility what some see as nothing more than bonus payments has been a contentious subject in the State House, dividing the House and Senate in 2022 when the issue was raised in regard to new offshore wind contracts. 

In the end, the two chambers agreed on a compromise: remuneration was set at up to 1%, but a deadline of Dec. 31, 2026 was put in place for any offshore wind projects that qualify.  

 By the time Rhode Island Energy went out to bid for new contracts, it had decided against seeking an incentive. 

Sen. Dawn Euer, the Newport Democrat who led the fight against remuneration three years ago, said there’s still no justification for paying extra money to the utility. The company is governed by state regulations that already reward it a profit incentive, she said. 

“I think there is zero risk because they are by definition too big to fail,” she said. “Their costs are covered by ratepayers.” 

Tikoian and Solomon said the remuneration language could change.

“I wouldn’t be surprised if that falls off when the bill passes,” Solomon said.

Concerns over adequate supplies of emissions-free power  

There are larger questions in play that explain why Massachusetts and now Rhode Island policymakers are looking at contracts for nuclear power. 

Not so long ago, New England had four operating nuclear power stations. Vermont Yankee closed in 2014 in the face of a string of problems that included a crumbling cooling tower. The Pilgrim plant in Massachusetts followed in 2019, its owner citing high operating costs and low wholesale prices driven down by cheap natural gas. The 2011 Fukushima disaster in Japan also didn’t help efforts to keep either plant going. 

The closures have left Millstone and Seabrook Station in New Hampshire as the only two remaining nuclear facilities in the region and the share of power supplied to the six New England states from nuclear has dropped from 29% to 24%, according to the nonprofit that manages the regional power grid.  

Natural gas-fired plants and renewables have made up the difference. But if either of the two remaining nuclear stations were to close it would mean a huge gap in supplies of dependable, around-the-clock power.  

Renewables may not be able to make up the shortfall, at least in the near term without viable battery storage projects. As for natural gas, many believe New England is already overdependent on the fossil fuel, which is responsible for more than half of the region’s power generation, and then there are the emissions issues. 

So keeping carbon-free nuclear power flowing is important to the region and, in regard to Millstone, other states are now showing a willingness to share the responsibility with Connecticut to ensure it stays in operation. 

Euer agreed that Millstone’s operation is probably good for New England. The Rhode Island Office of Energy Resources too lent credence to the idea, saying in a statement that it’s interested in working with neighboring states on plans to reduce emissions that include solar, offshore wind, hydropower and nuclear. 

Current events are only reinforcing the need to reconsider options for clean energy in New England. Besides what’s happening with offshore wind, President Trump’s tariff threats and responses in Canada to dial up the costs of hydropower delivered to New England and other parts of the U.S. have raised uncomfortable questions about the vulnerability of power supplies that the region counts on. 

For Cornett, it means ensuring that all options are on the table. 

“It’s going to take all of us to really work together to find the right middle ground because the landscape as I sit here is very different from even nine months ago,” he said.