CT Construction Digest Tuesday January 9, 2017

State Plans Big Rail, Bus Fare Increases

State officials are now planning public hearings on plans to raise rail fares in Connecticut by 10 percent and to boost bus fares by 25 cents as of July 2018, a state transportation spokesman said Monday.
The first year rail fare hike would be followed by five percent increases in 2020 and 2021 under the state Department of Transportation plan. The proposal to deal with major transportation financing problems also calls for a “reduction of weekday off-peak service on Shore Line East, Danbury, Waterbury and New Canaan branches and elimination of weekend service on these rail lines,” DOT spokesman Judd Everhart said in an email. "Without action by the General Assembly to ensure the long-term solvency of the Special Transportation Fund, we will need to raise fares and reduce service.”
State subsidies to regional transit districts around Connecticut would be cut by five percent or more under the Malloy administration proposal.
“We’ve been saying that, without action by the General Assembly to ensure that long-term solvency of the Special Transportation Fund, we will need to raise fares and reduce service,” Everhart said.
The DOT’s schedule for the hearings is expected to be announced next week.
Gov. Dannel P. Malloy and DOT Commissioner James P. Redeker warned last month that Connecticut’s transportation system is facing a major fiscal crisis and needs almost $1 billion over the next five years in new revenue.
Malloy called on lawmakers to move quickly to enact new revenue measures such as electronic highway tolls, higher gasoline taxes or dedicating more sales taxes to transportation – all politically unpopular options the legislature has rejected in the past.
2018 is also an election year for the General Assembly, making it even more difficult for lawmakers seeking election to vote for politically distasteful proposals such as tolls.
But Malloy, a Democrat who is not running for a third term, said that, without new revenue for the state Special Transportation Fund, there will have to be both transit fare increases and cutbacks on major road and other transportation programs.
Republican legislative leaders argue that the transportation crisis is a result of Malloy’s poor leadership and his insistence on major new transportation programs without the money to pay for them.
Some lawmakers have been warning for years that the state’s financing system for transportation is heading for bankruptcy, in large part because tax revenue from gasoline have been dropping as a result of lower fuel prices and more efficient cars. CLICK TITLE TO CONTINUE

Opponents To New State Rules Say Frigid Weather, Lower Taxes Make Millstone Profitable

Frigid weather and lower taxes will boost profits at Connecticut’s sole nuclear power plant, making state support for competition with with natural gas unnecessary, opponents to proposed energy rules told state regulators Monday.
Eversource and United Illuminating went another round with Dominion Energy Inc., Millstone’s parent company, debating whether the Waterford nuclear plant deserves state support.
Dominion is profiting from recent below-zero temperatures that are pushing up demand for energy, United Illuminating told regulators. And federal tax changes will boost profitability, Eversource said.
Not true, said Dominion. The Richmond, Va.-based company said a recent state report that says Millstone will be profitable for years to come understates the plant’s financial position.
The two sides are seeking to influence the state Department of Energy and Environmental Protection and Public Utilities Regulatory Authority, which are reviewing whether Millstone can continue operating in energy markets that increasingly rely on natural gas.
Gov. Dannel P. Malloy last summer ordered the review of Millstone, directing an assessment of the Waterford plant to evaluate its “current and projected economic viability.”
A state report said last month that Millstone is expected to be profitable for years to come. Under various market conditions the present value of Millstone’s cash flow from 2021 through 2035 is expected to be between $1.3 billion and about $2.4 billion, according to the study.
Dominion said the findings are based on assumptions “that dramatically understate” Millstone’s costs. Dominion did not provide proprietary data on costs, and the consultant that studied its profitability relied on industry data from the Nuclear Energy Institute and information available from the Federal Energy Regulatory Commission on other Dominion plants.
However, as reasonable as the assumptions used in the Resource Assessment are, they cannot fully factor in the windfall revenue available to Millstone during periods when energy prices spike due to scarcity of supply in New England because of extreme weather conditions and fuel/resource limitations. As of the date of this filing, New England is experiencing price spikes of this very nature. For the period Jan. 1 – Jan. 8, 2018, if Millstone has sold its output into the ISO New England day-ahead energy market, it has earned more than $68 million in just 8 days. For Jan. 1-8, 2018, the average day-ahead locational marginal price at the Millstone node was $175.64 per MWh. Eversource said in its filing to regulators Monday, the deadline to comment, that with enactment of federal legislation cutting the corporate income tax rate to 21 percent from 35 percent, “Millstone, like other corporations should experience much greater profitability.”