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Entergy makes its case for injunction to keep VY open

But state is ready to counter its claims that it has overstepped its regulatory authority

VERNON—Vermont Attorney General William H. Sorrell and his colleagues have been preparing for the day when Entergy would claim the state had overstepped its boundary and into federal territory in regulating the Vermont Yankee nuclear power station.

Entergy did not disappoint, and filed a complaint in U.S. District Court in Burlington on April 18, claiming Vermont had overstepped its boundary and into federal territory.

“Litigation is by far the least preferred approach,” Richard Smith, president of Entergy Wholesale Commodities, wrote in a press release.

“But it is clear our disagreement with the state of Vermont on the scope of its authority over Vermont Yankee cannot be resolved between the two parties,” Smith said. “Putting this dispute before a federal judge is the appropriate and responsible way to resolve this disagreement. Our filing today does just that.”

Entergy, noting that only the U.S. Nuclear Regulatory Commission (NRC) can regulate safety-related nuclear operations, claims that state lawmakers have acted out of safety concerns.

The suit also claims Vermont violated the Federal Power Act Preemption and the Commerce Clause of the U.S. Constitution by requiring that Entergy offer low electric rates as a condition of relicensing.

Entergy’s final claim states that Vermont altered the 2002 Memorandum of Understanding that Entergy signed when it purchased the plant when Act 160 emerged in 2006.

That legislation required approval from both the House of Representatives and the Senate to permit the Vermont Public Service Board (PSB) to hear a nuclear plant’s Certificate of Public Good (CPG) case.

Last year, the Senate considered a bill that would have authorized the CPG. The measure failed, 26 to 4.

“We have made every reasonable effort to accommodate the state of Vermont and its officials while allowing the continued operation of Vermont Yankee — an outcome that benefits all stakeholders, including Vermont consumers and the approximately 650 men and women who work at the plant,” said Smith.

“Despite the fact that Vermont Yankee is important to the reliability of the New England electric transmission grid, emits virtually no greenhouse gases, and provides more than $100 million in annual economic benefits to the state of Vermont, it has been made clear that state officials are singularly focused on shutting down the plant. That has left us with no other choice but to seek relief in the court system,” Smith said.

Sorrell said the state is acting within its rights.

, In its filing, Entergy claims that public statements made by Vermont politicians provide evidence that radiological safety concerns drove the state’s opposition to the Vermont Yankee plant operating beyond its 2012 Certificate of Public Good.

In Sorrell’s view, the company still has to establish that safety concerns were a driving force behind the Senate’s 2010 vote to deny the nuclear plant a CPG hearing.

“I don’t think that evidence will be there,” said Sorrell.

State jurisdiction?

Regarding preemption — the concept that the federal government supersedes any control a state has over atomic safety matters — Sorrell said that the U.S. Constitution is clear — states retain their powers, except in areas where the Congress or the Constitution proscribe actions to the Federal level.

For example, the ability to declare war counts as a “feds- only” action, said Sorrell.

But he said that nuclear energy does not represent a case for “total, absolute federal preemption” and that states have legitimate concerns and authority.

Vermont’s designation of groundwater as a public good is an example of a state’s right, Sorrell said. The state can prosecute companies for polluting groundwater, even if the pollution comes from a nuclear plant.

In 2006, Entergy complimented Vermont’s law, but the company has since shifted its stance into reverse now that “the rubber hits the road,” said Sorrell.

According to Sorrell, Entergy’s 2006 public statements made after former Gov. Jim Douglas signed Act 160 into law “directly contradict” Entergy’s complaint.

In effect, Entergy agreed to an up-or-down vote from the Legislature, said Sorrell.

“It’s going to be a good fight,” said Sorrell.

Also in the complaint, Entergy referenced the Federal Power Act Preemption and the Commerce Clause of the U.S. Constitution.

Entergy said in its press release that Vermont violated the law by making low electric rates part of relicensing.

“We plead not guilty,” said Sorrell, adding that “there’s no compelling factual evidence” Vermont officials required Entergy to give the state favorable electric rates as a condition of relicensing.

“This is clearly a case of potentially national significance,” said Sorrell, about Entergy’s complaint against Vermont.

He said that the nuclear industry and other states will keep their eyes on the case’s outcome. If the courts rule in favor of Vermont, other states may move to enact similar laws.

Sorrell said that the NRC’s decision to “stay out” of the issue and “respect Vermont law” demonstrates that Vermont is within its rights. In his opinion, if the Vermont’s actions warranted preemption, the NRC would have aggressively pursued the issue.

“Entergy is a very good company,” said Steve Kerekes, spokesperson for the Nuclear Energy Institute (NEI), a public policy organization that advocates for the nuclear industry.

Entergy is a member of NEI.

Kerekes said that it’s too early to comment on Entergy’s court case, but that the outcome, however, shouldn’t affect the industry at all. He said that didn’t see a connection between Vermont Yankee and Entergy’s other plants.

“The NRC renewed Vermont Yankee’s license. That’s not the issue,” he said.

In his opinion, this issue is a case of “peculiar politics” surrounding a good plant, providing low-cost power with a “high margin of safety.”

Vermont Yankee’s capacity factor is above average, said Kerekes. The capacity factor is a measurement of how much power a plant produced and its reliability.

Kerekes said that over the past three years, Vermont Yankee has run at 92 percent of its generating capacity. The average capacity factor for the industry is 90 percent, he said.

By comparison, wind and solar have a capacity factor of 30 percent and coal and natural gas about 65 percent, he said.

NRC in the middle

NRC spokespeople have constantly stated that the agency does not plan to involve itself in the preemption challenge between Entergy and Vermont.

States have a role to play with the plants within their borders, and the NRC “rarely gets involved with preemption challenges,” said NRC spokesperson Neil Sheehan.

“This remains a matter between the state and Entergy,” he said.

Sheehan said the NRC will review the case, however, because Entergy cited the commission in its complaint. He also said that federal preemption cases “go on all the time,” but rarely with the NRC’s involvement.

The NRC views the Atomic Energy Act as setting clear guidelines on the commission’s responsibility over the nuclear industry.

“We don’t believe it’s our role to get in the middle of those [preemption] disputes,” Sheehan said.

“It’s a warm-up [for Entergy], but it won’t set precedent,” said Jim Riccio, nuclear policy analyst with Greenpeace.

Although Entergy’s Pilgrim Plant in Massachusetts and Indian Point plant in New York are also both up for license renewal, Riccio didn’t think the court case would affect the outcome.

Neither Massachusetts nor New York has a law like Vermont’s, which requires a state legislative vote to affect a nuclear power plant’s destiny.

Sorrell said he expects Entergy to file paperworkfor a preliminary injunction to prohibit the state from enforcing the March 2012 shutdown, a measure the company took last Friday.

He added that Vermont will object the injunction.

Sorrell expects the United States District Court in Burlington will rule on Entergy’s complaint this year. It’s likely one of the parties will appeal this court’s decision.

“Round one,” he said.

Sorrell expects the case to take many years.

From Burlington, the case will move up the chain of courts to the Federal Court of Appeals in New York City, and possibly on to the U.S. Supreme Court.

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

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