U.S. Markets closed

Dominion scrambling for Connecticut utility deals to save Millstone reactors

March 7 (Reuters) - Dominion Energy Inc said Thursday it is working to complete negotiations with Connecticut utilities for the purchase of electricity from its Millstone nuclear power plant before a March 15 deadline.

"There is a March 15 deadline for Dominion to submit a retirement bid to ISO New England," Dominion spokesman Kenneth Holt said, noting "We are working to complete negotiations prior to that date." ISO New England operates the power grid in the six-state region.

Millstone produces about half of the electricity in Connecticut and around 98 percent of its carbon-free energy, making the plant key to meeting the state's aggressive carbon reduction goals. Over 1,500 people work at Millstone.

Dominion, of Richmond, Virginia, has been saying for years that Millstone is not economically viable in the current low power price environment.

After three years of working with politicians and regulators on a plan to keep the plant in service, the state in December selected Millstone for a contract to purchase a little over half of its output for 10 years.

The price of that contract, however, was not firm, so Dominion said it is negotiating with the state and two local utilities, which are units of Eversource Energy and Avangrid Inc .

The price for the first three years of the contract is about equal to the wholesale power price in New England, Dominion said.

"That is not an acceptable result. ... In order to ensure the plant's viability, we must have pricing that recognizes its energy security, environmental and economic benefits," Dominion Chief Executive Thomas Farrell told analysts on the company's fourth-quarter earnings call in February.

"We are confident that these issues will be resolved in a manner that provides long-term financial assurance required for Millstone's continued operation," Farrell said.

Holt said Dominion has been "ready to negotiate for a month but there's no incentive for the other utilities to come to the table. We are meeting face-to-face this week but previously we have only had meetings over the phone." Power prices in New England over the past five years have been the lowest ever seen, according to Reuters data going back to 2000, due to increasing use of generators fired with cheap natural gas from shale formations and renewables like wind and solar.

That makes it tough for facilities using other sources of energy like coal and nuclear to compete.

(Reporting by Scott DiSavino; editing by Jonathan Oatis)