July 13 (Reuters) - Dominion Energy Inc said on Thursday it would keep fighting to get the Connecticut legislature to include power from the company's Millstone nuclear plant included in a state energy procurement plan.
But NRG Energy Inc vowed to fight Dominion's proposal, calling it "a cynical scheme that should not be rewarded."
The state has solicited power from renewable sources of generation to support environmental programs. Dominion has said including nuclear power in this program will help cut the state's electricity costs, which are among the highest in the country.
"We remain committed to work with Connecticut policymakers to address the issue of high electric rates in Connecticut and the future of Millstone in the current budget session," said Millstone spokesman Kenneth Holt.
But David Gaier, spokesman for NRG, said "handouts to nuclear operators, whether direct subsidies or out-of-market contracts, will cost ratepayers billions more."
Connecticut legislators, who did not pass a budget by the end of June, are still trying to iron out tax and spending issues in a special session.
Millstone is among several nuclear plants in the U.S. Northeast and Midwest that could close before their licenses expire, as low wholesale power prices have squeezed profits.
In June, Dominion asked ISO New England, which operates the New England power grid, what options the company had if it decides to retire the plant. But Holt said the company has not yet made a decision.
The ISO said Dominion had already committed to generate power through May 2021, but noted it could retire the reactors so long as the company provides energy from another source. Holt noted the company could also agree to pay a penalty.
"Hanging the threat of closing a profitable plant on the pretext of financial distress is a cynical scheme that should not be rewarded," said Gaier. NRG has opposed proposals in half a dozen states to boost nuclear revenues.
Connecticut is one of several states exploring ways to keep reactors in service to preserve carbon-free energy, jobs, taxes and a more diverse power pool.
In 2016, New York and Illinois adopted rules to subsidize some reactors that were in danger of closing due to generators run on cheap natural gas.
Ohio, Pennsylvania and New Jersey have also considered proposals to protect their reactors.
NRG, Dynegy Inc, Calpine Corp and other companies with natural gas-fired plants have challenged the New York and Illinois rules in federal court.
Reporting by Scott DiSavino; Editing by David Gregorio