Waterford - A threat to close the Millstone nuclear power station over a proposed state tax on electricity generators met with skepticism Friday from a sponsor of the legislation.

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.