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‘Criminal nuclear enterprise’

New bill would consider VY exactly that, if it operates past 2012

BRATTLEBORO—Rep. Richard Marek, D-Newfane, recently asked himself this question: “What can the state do if Entergy continues to operate Vermont Yankee past March 21, 2012?”

That is the date beyond which the company’s Certificate of Public Good (CPG) expires.

Marek has unveiled a draft of a bill that would penalize a nuclear plant operating without a current CPG through a fine of $100,000 a day for each day it runs.

The bill would also require the plant turn over any proceeds generated after the expiration date, among other consequences.

Marek is not the first to ask this question now that, in an unsurprising turn of events, Entergy has filed suit against the state of Vermont over the legislature’s actions, which bar the state Public Service Board from issuing the permit for the company’s Vermont Yankee nuclear power plant in Vernon.

As Marek sees it, Entergy could benefit from a “win-win situation” while its suit crawls through the federal court system if the plant operates pending a legal resolution.

Depending on how quickly the suit is settled, the plant could operate for as much as 5-10 more years, allowing Entergy to eventually walk away from Vermont with millions of dollars in its pockets.

“They [Entergy] could violate [Vermont law] with impunity and walk away with the proceeds,” said Marek.

The Nuclear Regulatory Commission (NRC) renewed the 650-megawatt plant’s license for another 20 years on March 10, just one day before a massive earthquake heavily damaged the Fukushima Daiichi nuclear complex in Japan. Vermont Yankee and the Fukushima reactors share the same containment design.

But on a recent Sunday afternoon, Marek, a lawyer with extensive corporate litigation experience, hit upon his answer.

This week, he unveiled the draft of state legislation that, if enacted, will establish the criminal liability of operating a nuclear plant in Vermont “beyond the date permitted in a certificate of public good.”

Not a new notion

The proposed bill would levy daily fines against a nuclear plant operating without a CPG from the Vermont Public Service Board. This errant plant would also have to turn over any proceeds generated while operating without a certificate.

The bill also calls for fines on plant management and outside companies providing the plant goods and services.

Marek hopes the bill will send the message that “if you don’t follow the law, there are consequences.”

In 2010, the Vermont Senate voted 24-6 against permitting the PSB to hear Entergy’s case for renewing its CPG.

Under state statute, nuclear plants looking to operate within the state must receive a CPG from the state, in addition to the federal license awarded by the NRC.

Vermont has stood alone among the states in requiring this additional state oversight, which was established before the nuclear power plant began operating in 1972.

But in another only-in-Vermont twist, the Legislature voted in 2006 to require an affirmative vote from the General Assembly before the PSB can consider a nuclear plant’s CPG case.

In its court complaint filed April 18, Entergy has claimed that Vermont overstepped its powers.

Part of Entergy’s case claims only the NRC can license a nuclear plant, a claim based on federal preemption statutes.

The company further charges thatVermont lawmakers’ actions were motivated by an attempt to regulate nuclear safety.

Another part claims that Vermont violated the Federal Power Act Preemption and the Commerce Clause of the U.S. Constitution by demanding Entergy provide the state with low electric rates as a condition of its license renewal.

The company signed a memorandum of understanding (MOU) in 2002 as part of the process of its purchase of the Vermont Yankee substation from Vermont Yankee Nuclear Power Corporation.

As one of the many stipulations in that document, Entergy officials agreed explicitly to the state’s authority.

The parties signing the document also agreed that “in the event the [state] fails to approve this agreement in its entirety or acts to overrule or disapprove any portion hereof, each such party agrees that their agreement set forth herein may terminate, if such party so determines in its sole discretion, and each shall have the, same rights as each would have had absent this Memorandum of Understanding.”

But Marek believes that years ago Entergy could have contested Vermont’s 2006 change to the MOU authorizing the Legislature to approve a PSB hearing .

Last week, Entergy filed a lawsuit challenging the state’s authority over the plant, and Friday, the company filed a preliminary injunction in U.S. District Court in Burlington to “preserve the status quo” until their case concludes and to prohibit Vermont from stopping plant operations in the meantime.

The company’s waiting until now to file suit says to Marek that Entergy deliberately hopes to profit from operating the plant past March 2012 despite the legalities.

“We don’t allow people [in Vermont] to violate our laws with impunity,” Marek said.

Radical notion?

Marek said his bill mirrors other laws like the federal Racketeer Influenced and Corrupt Organizations (RICO) Act, passed in 1970, which, in part, took aim at organized crime.

The RICO law applies penalties to acts performed as part of a criminal organization, but it also targets the organization’s leadership.

“[The bill] is not exactly a radical notion,” said Marek.

The bill would also fine companies furnishing the plant with services at $1,000 per action. In other words, companies like Coca Cola or other food vendors could be fined $1,000 each time they deliver goods to Vermont Yankee.

Finally, if the plant’s ownership offers to reimburse companies for such fines, it can be fined up to $50,000. For example, said Marek, Entergy can’t offer to pay a food vendor’s’s fines.

The bill does not penalize employees lower than management level.

So far, Marek said he has not received any negative reactions to the criminal nuclear enterprise bill, but he knows that reaction is inevitable.

“I’d be shocked if there is no adverse reaction,” he said.

But is it necessary?

The Vermont Legislative Council, a nonpartisan legislative agency that provides legal research and offers legal opinions regarding the constitutionality of bill drafts, also vetted the bill.

But “I don’t think it’s needed,” said Michael Dworkin.

A professor of law at the Vermont Law School, Dworkin directs the Institute for Energy and the Environment and chaired the PSB from 1999 to 2005.

Dworkin believes Title 30 of the Vermont Statutes already covers what Rep. Marek’s bill proposes.

Title 30 sets out the PSB’s rules and powers, including a provision that allows the PSB, or a party to one of its decisions, to “complain to the [state] Supreme Court for relief against any disobedience of or noncompliance with such order or decree.”

Dworkin said a 1983 U.S. Supreme Court decision involving Pacific Gas and Electric (PG&E) also serves as an example of the feds upholding states’ rights.

The ruling upheld California’s right to regulate PG&E’s nuclear operations where they pertained to issues other than radiological safety, such as economic impact, reliability, and land use.

Dworkin said the PG&E ruling “is a good law.” The ruling has not been overturned.

Dworkin echoes Vermont Attorney General William Sorrell’s reaction to Entergy’s claim that the Legislature’s actions against Vermont’s only nuclear plant extend into the NRC’s purview of nuclear safety.

“They’d have to prove it,” said Dworkin.

In response to a question as to whether Marek’s bill could be discriminatory against Entergy, Dworkin said “no.”

Dworkin said laws can cover “a category with rational boundaries” — such as nuclear plants — without the law being discriminatory.

“There’s no problem with describing a real-world fact and applying it,” Dworkin said.

“I hate to be blunt, but this is about as serious a proposal as Donald Trump’s presidential aspirations, and just as naked in its pursuit of publicity,” wrote Oliver Olsen, R-Jamaica, in a weekly e-newsletter he sends to constituents.

Olsen predicts the bill will never become law.

“If the federal courts are inclined to allow VY to continue operating while the question is being litigated (which is quite probable), it stands to reason that the courts would not look favorably upon a law that tries to circumvent the authority of the federal court,” he wrote.

Larry Smith, spokesperson for Vermont Yankee, said he had not seen Marek’s proposed bill but because of Entergy’s litigation he would have to decline comment.

Official in January

The bill, which Marek drafted two weeks ago, did not make the Legislature’s consideration deadline for the 2011 session.

Missing the deadline is fine, Marek said, because the General Assembly “did not [have] time to give it thoughtful consideration.”

Marek said legislators will have the summer and fall to consider the bill.

In January 2012, when the second half of the current biennium begins, he will formally introduce it.

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Originally published in The Commons issue #98 (Wednesday, April 27, 2011).

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