A federal U.S. District Court judge dismissed Entergy's lawsuit against the state of Vermont for imposing a higher generating tax for power from the Vermont Yankee Nuclear Power Plant.
Vermont Attorney General William Sorrell said the court ruled in favor of the state's arguments that remedies through the Vermont tax department and the state court system are “totally adequate.”
“Our argument prevailed,” Sorrell said. “We're very pleased with the decision.”
This past legislative session, the Legislature raised the generating tax on Vermont Yankee to $0.0025 per kilowatt-hour (kWh), which would raise roughly $12.5 million for the state instead of the previous $5 million.
The Louisiana-based corporation sued the state on four counts of allegedly violating the U.S. Constitution before the first payment was due on Oct. 25. The tax hike, which is less than that of Connecticut's $0.003-per-kWh generating tax, was aimed at replacing two agreements that funneled about $6 million annually into the state's Clean Energy Development Fund.
After Entergy filed its suit on Sept. 11, the state moved to dismiss it on Sept. 24 based on the Tax Injunction Act, which prevents federal courts from intervening with the collection of state taxes. According to the court order, Entergy argued that the kilowatt hour generation rate was a levy not a tax. Entergy lawyers also contended that the case was outside of state court jurisdiction.
Judge Christina Reiss ruled that the generating tax was indeed a “tax” under the Tax Injunction Act, and Entergy does have a “plain, speedy and efficient” avenue through the state court system.
For that reason, she wrote, “This court lacks subject matter jurisdiction to consider Entergy's requests for injunctive and declaratory relief whereby Entergy seeks to avoid payment of the (tax) based upon a federal court determination that it is unconstitutional.”