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Federal court tosses state’s VY suit

State can re-file after NRC addresses the same complaint about Entergy’s use of the Decommissioning Trust Fund

VERNON—Six months after Vermont officials filed suit to stop a controversial use of Vermont Yankee’s decommissioning trust fund, a federal court has dismissed the complaint on procedural grounds.

The U.S. Court of Appeals District of Columbia Circuit, in an order dated Feb. 8, ruled that Vermont’s legal complaint against the Nuclear Regulatory Commission is “incurably premature.”

Ironically, that’s because the state also has filed a similar, but separate, administrative challenge with the NRC on the same issue.

The appeals court, however, left the door open for the state to re-file its complaint once the NRC addresses the matter.

“Once the Nuclear Regulatory Commission has resolved [state officials’] pending request for commission review [...] they may file a petition for judicial review,” the court wrote.

Battle over trust fund use

At issue is an ongoing fight over Vermont Yankee’s decommissioning trust fund. The Vernon plant ceased producing power in December 2014 and is headed for a decades-long period of dormancy; the trust fund’s growth rate will help determine when actual decommissioning work starts.

Decommissioning the plant is expected to cost $1.24 billion. The trust fund at the end of December stood at $595.4 million, and plant owner Entergy reported spending $58 million from the fund during 2015.

The NRC last year approved Entergy’s request for a regulatory exemption to use the trust fund for long-term management of radioactive spent nuclear fuel at Vermont Yankee. It’s a big-ticket item — an expected $225 million draw from the trust — but the NRC believes there will be enough cash both for radiological decommissioning and fuel management.

Vermont officials disagree, contending that fuel management is not an appropriate trust-fund expense.

In August, the state filed a legal challenge in the Washington, D.C., appeals court against the NRC, arguing that the federal agency “acted arbitrarily, abused its discretion and violated the Atomic Energy Act, the Administrative Procedure Act and the National Environmental Policy Act” when it granted Entergy’s request.

Also listed as a plaintiff was Green Mountain Power Corp., which now owns Vermont Yankee Nuclear Power Corp., the plant’s former owner.

Vermont Yankee Nuclear Power Corp., another plaintiff in the suit, collected the electric ratepayer funds that now make up the plant’s decommissioning trust fund, state officials pointed out.

“Further, Green Mountain Power Corp., and through it their Vermont ratepayers, have a 55 percent interest in all monies that remain in that fund following completion of decommissioning,” the lawsuit said. “Thus, every time the [NRC] allows an improper withdrawal from the decommissioning fund, it harms Vermont Yankee Nuclear Power Corp., Green Mountain Power Corp. and their Vermont ratepayers.”

The NRC fired back a few months later with a motion to dismiss the state’s legal action. The agency didn’t address the substance of the state’s complaint, instead noting that, in November, Vermont officials had filed a separate administrative petition asking that the NRC’s commissioners overturn the spent-fuel decision.

That created a technical problem, federal officials said, because the appeals court has jurisdiction only over final orders issued by the NRC. Once Vermont filed its November petition, the original order no longer was considered final, and the lawsuit became moot.

“Vermont cannot seek judicial review of the NRC’s exemption decision before this court while at the same time seeking review and reversal of the identical decision in the administrative forum — the outcome of which could potentially obviate the need for judicial review,” federal officials wrote.

The appeals court agreed with the NRC in its Feb. 8 order, dismissing Vermont’s suit “for lack of jurisdiction.”

Limited time frame

Asked for comment on the court’s dismissal, Vermont Assistant Attorney General Kyle Landis-Marinello recalled that the state had a limited time frame last summer in which to file an initial challenge to the NRC’s spent-fuel decision.

“There was jurisdiction at the time we filed the suit,” he said.

Even after the state filed its November petition with the NRC, “we did take the position that there still was (court) jurisdiction,” Landis-Marinello said.

Though that argument ultimately didn’t fly with the appeals court, Landis-Marinello emphasized that “we’ve retained the right to bring this challenge at a later time.”

Officials also noted that refiling the suit won’t be necessary if NRC commissioners decide on their own to overturn Entergy’s trust-fund exemption.

“We’ll go through the NRC process and see where we are,” Public Service Department Commissioner Chris Recchia said.

Spent-fuel disputes aside, there is a another issue related to the now-dismissed lawsuit: Last fall, Entergy disclosed that Vermont had begun billing the company to recover legal fees expected in the circuit court fight. At the time, the state warned Entergy its legal costs could amount to $250,000.

But state officials now appear to have reconsidered that strategy: Entergy Vermont Yankee spokesman Marty Cohn confirmed that the state’s “bill for legal services on this case has been withdrawn.”

That means the state, at this point, is planning to cover its own legal costs, including bills submitted by WilmerHale, a Boston law firm hired for the trust-fund suit.

Though state Public Service Department officials could not have known the suit would be dismissed when preparing their fiscal year 2017 budget, documents show that the associated legal costs already had been factored in.

“We anticipate increased contract obligations of $274,182,” department officials wrote in a budget proposal released last month. “This is based on the addition of a contract with WilmerHale related to the Vermont Yankee legal fees exposure.”

Recchia confirmed that the state is not currently billing Entergy for legal fees, but he said he’s reserving the right to do so at some point. He also said the state’s investment in the trust-fund lawsuit will not be wasted.

“We will make use of the information we have gleaned,” Recchia said.

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Originally published in The Commons issue #344 (Wednesday, February 17, 2016). This story appeared on page A2.

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