Sunday, January 22nd, 2012
A district court has ruled that Vermont Yankee nuclear power plant may continue to operate beyond the end of its original 40 year licence in March, granting Entergy a long awaited victory over the state of Vermont. The state is considering whether to appeal.
This case involved three claims made by Entergy, all of which challenged the state’s self-determined right to make rules about the perceived safety and economic performance of the plant.
The first claim related to several state enactments that would have forced the plant to shut down at the end if its original licence. Entergy argued that these were rooted in concerns over safety, and therefore pre-empted by the Atomic Energy Act. The act places sole control over the country’s nuclear and radiation safety matters in the hands of a national regulator and in March last year this regulator, the Nuclear Regulatory Commission, approved a 20 year license extension for the Vermont Yankee plant.
One piece of state legislation in particular requires the Vermont Yankee operator to obtain a new certificate of public good from the state’s public service board in order to continue operating past its original licence. Entergy originally agreed to this condition when it bought Vermont Yankee in 2002, however in 2010 the state legislature passed a vote effectively blocking the board from processing the certificate. This may have been influenced by public anxiety due to the detection of increased levels of tritium within the Vermont Yankee site in 2009 which nonetheless were measured to be within NRC prescribed limits, and a partial collapse of a cooling tower in 2007 which forced the plant to reduce its power output for 11 days.
The second claim related to plans from the state that would have forced the plant to sell electricity to state utilities at below market rates or risk being forced to shut down. Entergy claimed that Federal Energy Regulatory Commission has exclusive jurisdiction to regulate the sale and transmission of wholesale power, and that no state institutions should be permitted to interfere with this. Vermont Yankee is a merchant plant, not owned by the state, and therefore in theory should be free to sell electricity onto the market both inside and outside of the state at whatever price it can. This determines its profitability and ultimately its ability to survive. The single 620 MW reactor is currently responsible for about 70% of the electricity produced in Vermont.
The third claim again referred to these plans, which the company alleged was coercive behaviour from the state, and which placed unfair constraints on interstate commerce.
Yesterday’s decision marks the end of an anxious wait for Entergy. The three day court case took place in September last year and a decision was originally expected within weeks. In July, the company had sought a preliminary injunction to allow it to keep operating while the court case played out, claiming this was necessary for them to make important decisions – such as whether to buy fuel. However the judge rejected these claims, stating that Entergy had failed to demonstrate irreparable harm would be caused by waiting for the results of the main case.
Presiding Judge John Garvan Murtha finally ruled in Entergy’s favour on all three claims – acknowledging the pre-eminence of the Atomic Energy Act in governing safety matters and entitling Entergy to ‘injunctive relief’ on their commerce clause claim, effectively preventing the state from interfering with the plant’s electricity sales contracts.
In making his decision, Murtha noted it was based “solely upon the relevant admissible facts and the governing law in this case, and it does not purport to resolve or pass judgment on the debate regarding the advantages or disadvantages of nuclear power generation, or its location in this state.”
In addition the decision does not “purport to define or restrict the state’s ability to decline to renew a certificate of public good on any ground not preempted or not violative of federal law, to dictate how a state should choose to allocate its power among the branches of its government, or pass judgment on its choices”. This was deemed unnecessary for the resolution of the claims.
Entergy immediately welcomed news of the victory: “We’re pleased with the decision, which Judge Murtha issued after a thorough review of the facts and the law. The ruling is good news for our 600 employees, the environment and New England residents and industries that depend on clean, affordable, reliable power provided by Vermont Yankee.”
On his blog, Vermont state governor Peter Shumlin expressed his vexation: “I am very disappointed in today’s ruling from the federal court. Entergy has not been a trustworthy partner with the state of Vermont. Vermont Yankee needed legislative approval 40 years ago. The plant received approval to operate until March, 2012. I continue to believe that it is in Vermont’s best interest to retire the plant. I will await the Attorney General’s review of the decision to comment further on whether the state will appeal.”