Entergy Nuclear has won a major victory against the state’s efforts to shut down the Vermont Yankee nuclear plant in Vernon.
The 2nd U.S. Circuit Court of Appeals in New York City struck down two Vermont laws, ruling that they usurped federal jurisdiction over the safety of nuclear power. The three-person panel ruled that Vermont legislators overstepped their authority when they crafted legislation in 2005 and 2006 that gave them power over the future operation of Vermont Yankee.
Safety is the sole responsibility of the Nuclear Regulatory Commission under the U.S. Atomic Energy Act, the 2nd Circuit ruled.
“It’s a big win for Entergy and a little win for the state,” said Cheryl Hanna, a Vermont Law School professor who has followed the lawsuit since it was filed in 2011.
The decision largely sided with a January 2012 decision by U.S. District Judge Garvan Murtha, but it did overturn one part of Murtha’s decision, which could save the state from paying Entergy’s legal bills, estimated at $5 million and climbing.
The decision drew a measured response from a vacationing Gov. Peter Shumlin.
”While I disagree with the result the 2nd Circuit reached in pre-empting Vermont’s Legislature, the process does not end today,” he said in a statement. “Importantly, the Vermont Public Service Board’s role in reviewing Entergy’s request for a state certificate of public good is preserved and will continue.”
The governor added, “To me, the decision does not change the simple fact that Entergy has over the years not been a good partner with Vermont, preferring to focus on multiple lawsuits against the state. I remain steadfast in my belief that Entergy’s continued operation of this facility is not in the best interest of Vermont.”
Entergy spokesman James Sinclair said the company is pleased by the decision to strike down the two Vermont laws.
“We have felt strongly for a long time now that the state of Vermont’s Acts 74 and 160 were pre-empted by federal law and are very pleased with today’s decision,” Sinclair wrote in an email.
Attorney General William Sorrell said it would take some close legal work before deciding whether to appeal the 56-page ruling, which included a companion decision from one of the judges. He said he was surprised and disappointed by the ruling.
“I think the decision was even more critical of the Vermont Legislature than Judge Murtha,” he said.
But Sorrell saw a silver lining, saying that the decision reversed Murtha’s earlier finding that would have allowed Entergy to recover its legal costs, currently estimated in excess of $5 million.
The judges found that the state had not violated the dormant Commerce Clause of the U.S. Constitution, which prohibits obstacles to interstate commerce.
At issue was whether the state and the Public Service Board had demanded a power contract below market rates that were not available to Entergy’s out-of-state power customers.
The state had argued there was no such power contract on the table, and such an argument from Entergy was premature. The appeals court agreed.
The three-member court had harsh words for the Vermont Legislature and its leaders in 2005 and 2006, when Act 74 and Act 160 were written.
The court said the legislators provided “an inadequate and misleading legislative record, failed to provide plausible legislative rationales” in trying to regulate the building of a high-level radioactive waste facility at Vermont Yankee in Vernon, and gave the Legislature essentially veto power over Yankee’s future operation.
There are other paths Vermonters and others concerned about the safety of nuclear reactors can take, the judges wrote. “The legislation passed here, however, was not the way to resolve those concerns,” they concluded.
But the appeals court, one step below the U.S. Supreme Court, cleared the way for the PSB to make a decision on Vermont Yankee’s certificate of public good — as long as it stays away from safety issues and focuses on economic, environmental and aesthetic issues.
The PSB has been increasingly critical of Entergy’s operation of Vermont Yankee, and is now considering whether to reopen its case and include new information about the reactor’s current economic problems.
Entergy recently announced it would lay off 30 employees. The NRC last week agreed to take up a formal petition from anti-nuclear groups asking for a financial evaluation of three Entergy-owned nuclear plants, including Vermont Yankee.
Sorrell said he expected a decision from the PSB on the Yankee certificate by the end of this year or early next year.
Hanna said the decision was not surprising, and now shifts the focus to the quasi-judicial PSB.
“I don’t think it was unexpected. It really reaffirmed what Judge Murtha had said, that the Vermont Legislature was motivated by safety concerns, and that is pre-empted by federal law,” she said.
“The court also agreed with Murtha that you have to look at the legislative record behind the law, not just the law itself,” she said.
Hanna said she wouldn’t be surprised if the PSB denies Entergy a certificate of public good. In that case, any appeal would be headed to the Vermont Supreme Court.
Sandra Levine, senior attorney with the Conservation Law Foundation, which had filed a brief in the case, said the decision was a disappointment for those who believe states should have more say over the operation of nuclear reactors.
“The court’s decision is a disappointing failure to allow Vermont a stronger say in regulating a tired old nuclear plant,” she said.
The decision drew a bittersweet response from one longtime anti-nuclear activist.
“Good for you, Vermont. Good fight. Good expression of your love for Vermont and New England,” said Raymond Shadis, senior technical advisor for the New England Coalition. “It would take a chief executive or attorney general brave beyond the standard definition of political courage to attempt an appeal to the (U.S.) Supreme Court.”
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