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State, Entergy file post-trial briefs

BRATTLEBORO—Entergy and Vermont’s post-trial briefs hit U.S. District Judge J. Garvan Murtha’s office last week.

The corporation, which still wants three state statutes overturned so it can continue operating the Vermont Yankee Nuclear power station, also asked that its Certificate of Public Good case return before a neutered version of the Public Service Board (PSB).

In its brief, the state asked the federal court to hold Entergy’s feet to the fire of its promises.

Entergy Corp. attorneys filed suit against Vermont in federal court in April. The corporation claimed the state’s regulation of VY strode into the territory of the Nuclear Regulatory Commission (NRC) by attempting to regulate nuclear safety.

Entergy purchased the 38-year-old nuclear plant in Vernon in 2002. The plant needs a federal-issued license and a state-issued Certificate of Public Good (CPG) to operate in Vermont. VY’s current operating license expires March 2012.

In March, the NRC renewed VY’s operating license so it can run until 2032.

Last year, however, under Act 160, the state Senate voted 26-4 to deny VY a CPG hearing, effectively closing the plant’s docket before the PSB.

Entergy claims that the Vermont Legislature regulated the plant on nuclear safety grounds through a careful and planned use of “code words.”

Legislators substituted words and phrases like “economics,” “reliability,” and “public safety” to circumvent the NRC’s authority over all things nuclear safety, Entergy’s lead attorney Kathleen Sullivan told Murtha during last month’s trial.

Entergy’s legal team said that nuclear safety also motivated the Vermont Senate’s 2010 vote.

In the brief, Sullivan told Murtha that the court should reverse three statutes pertaining to the regulation of VY: Acts 74, 160, and 189.

The state, for its part, claims that a host of different concerns, unrelated to nuclear safety issues, motivated the Legislature.

The state’s attorneys cited motivations like a deep mistrust of Entergy and misstatements by employees about the existence of underground pipes that leaked tritium into groundwater.

The state also cited failed negotiations over a power purchase agreement (PPA) and over plans for an energy future founded on renewable-energy sources.

According to Vermont’s attorneys, Entergy repeatedly agreed to comply with state statutes. The company also acknowledged the Legislature and PSB’s authority in public communications.

In a memorandum that entered the public record as part of the state’s approval of Entergy’s purchase of VY, the company explicitly stated that it recognized the state’s rights to regulate non-safety issues and “waive any claim [it] may have that federal law preempts the jurisdiction” of the PSB to approve or deny a renewed certificate.

Federal law explicitly prohibits states from regulating atomic safety.

Only when the corporation did not get the CPG it wanted did Entergy cry pre-emption, said State’s Attorney Scot Klein.

Vermont’s attorneys argued to Murtha that Entergy should honor its commitments.

At the close of the September three-day merits trial in Brattleboro, Murtha asked the legal teams for both the state and for Entergy to answer three questions.

He asked for:

• each side’s respective response to the other’s defenses.

• whether Acts 74 and 160 could be separated from the pre-existing portions of their respective Vermont statutes (“severable” in legal terminology),

• which statutes besides Acts 74, 160, and 189 grant the PSB’s authority over VY.

Murtha also asked Entergy to define what relief it was seeking from the court.

Both sides agreed that the acts could be separated from their larger statutes.

Just purchase your power elsewhere

Entergy, which wants the process for its CPG to resume, requested numerous reliefs from the court in its post-trial brief.

The attorneys told Murtha that the court should invalidate Acts 74, 160, and 189 and prevent the state from ever enforcing the acts or from denying a CPG based on the acts.

Attorneys also asked that the court “permanently enjoin” the PSB from denying VY a CPG based on several criteria: radiological safety concerns, not agreeing to sell “favorably priced power to Vermont utilities,” and reliability issues, including energy diversity.

Entergy said too that the court should block the state from curtailing VY’s operation pending the PSB’s ruling on the plant’s CPG.

In its brief, Entergy again argued that the court should consider the state’s legislative history as proof of the General Assembly willfully and covertly regulating nuclear safety.

One quote cited by Entergy in its brief came from state Sen. Ann Cummings, D-Washington, the chair of the Senate Finance Committee.

According to Entergy, Cummings said, “We can have a much broader range of ability to hear [about ‘sterile sheep’ and ‘three-headed turtles’] than the [PSB] does. The board for good reasons has much more constraint.”

The attorneys cited a disconnect between Vermont’s goals stated in its statutes and the actions of utilities like Green Mountain Power and Central Vermont Public Service.

The utilities turned around and purchased nuclear-generated power from Seabrook in New Hampshire, the lawyers noted.

Entergy’s legal team also cited comments from lawmakers.

“Although legislators plainly had a purpose to regulate radiological safety, they were coached to avoid intoning the word ‘safety,’” wrote attorneys.

Entergy attorneys also said that the state never proved that it would have taken any other action besides shutting down VY absent a radiological safety concern.

Finally, Entergy lawyers wrote that the state’s “requiring” of a favorable, below-market power purchase agreement violated the Federal Power Act, which regulates the interstate sales activities and rates of power plants.

State: Entergy not a good corporate citizen

In its brief, the state reiterated its argument that acts 74, 160, and 189 steered clear of pre-emption territory.

They also argued that the court should base its decision on the end statutes and not legislative history, citing the Pacific Gas and Electric v. State Energy Resources Conservation and Development Commission case before the U.S. Supreme Court as “binding precedent.”

Entergy’s preemption claim “turns entirely on its view that the court should disregard the statutes and instead attempt to discern the motivations of individual legislators by reviewing fragmented legislative history drawn from years of proceedings,” wrote the state.

“ENVY is wrong about the pre-emption inquiry, and its summary of the legislative record is incomplete and flawed,” attorneys charged. “Applying the proper standard, the Court should uphold Vermont’s laws.”

The state called Entergy’s stance of “just don’t buy power from us” as an “about face” from when the company previously strutted out the promise of a favorable PPA.

Attorneys for the state also reminded the court that “it’s undisputed that it was the utilities — not the state — [that] negotiated PPAs.”

In its brief, the state cited public statements and documents by Entergy employees like Curt Hébert, its former executive vice-president, and Jay Thayer, VY’s vice president of nuclear operations.

Those statements repeatedly celebrated Vermont’s statutes and acknowledged both the authority of the PSB and General Assembly, the state’s attorneys wrote.

The state said that, as a matter of fairness, Entergy needed to be held “to its promises — promises the state relied on in granting ENVY numerous regulatory benefits over the last decade.”

A gutted PSB?

Although Entergy attorneys acknowledged the PSB’s authority, they also asked the federal court to restrict the state board’s reach by limiting the grounds on which the state may deny VY a CPG.

During the court trial, Sullivan expressed concern that the PSB was “tainted” by the General Assembly and grassroots organizations’ actions against VY.

Attorneys asked the court to block the PSB from denying a certificate on the basis of radiological safety concerns, the lack of a favorable PPA, or “reliability, need or cost.”

According to Entergy’s brief, the PSB should be explicitly forbidden from ruling on “pre-empted grounds.”

These pre-empted grounds include nuclear safety “under the rubric of public health and safety,” as well as economic issues covered under the Federal Power Act regarding wholesale power generators like VY.

The economic grounds include, said Entergy lawyers, any criterion that would attempt to “extract a below-market” price for the company’s power.

The state disputed Entergy’s “tainted” claim, saying the legal team had not presented proof of misconduct on the part of the PSB.

Furthermore, said the state’s attorneys, legal reciprocity and federalism caution against restricting a “quasi-judicial body” like a PSB.

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Originally published in The Commons issue #121 (Wednesday, October 5, 2011).

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