Entergy demands $4.6 million from the state

Saturday February 4, 2012

BRATTLEBORO -- Entergy wants the state to pay it "in excess of" $4.62 million.

In a filing submitted to the United States District Court for the District of Vermont, Entergy, which owns and operates Vermont Yankee nuclear power plant in Vernon, stated it is entitled to be reimbursed for the money it spent presenting its case in Entergy v. Shumlin et al.

"(The $4.62 million) amount is likely to increase if the fee petition is extensively litigated and/or Defendants appeal the Judgment," wrote Entergy's attorneys.

On Jan. 20, Federal District Court Judge J. Garvan Murtha ruled in favor of Entergy, finding the state Senate had overstepped its bounds when it prohibited the Public Service Board from issuing a certificate of public good for the continued operation of Yankee. Though the Nuclear Regulatory Commission approved Yankee's relicensing, allowing it to operate for another 20 years past its original license expiration date of March 21, 2012, Entergy must still receive a CPG from the state to keep the plant operating. After his ruling, Murtha reaffirmed the PSB's role in deciding whether the plant should receive a certificate.

According to Entergy's attorneys, the Supreme Court has found that a claim for reimbursement is unwarranted if it "is essentially fictitious, wholly insubstantial, obviously frivolous, or obviously without merit."

However, they wrote, because Entergy prevailed against the state, the legal relationship between the two parties was "materially altered and was judicially sanctioned."

"A judgment entered in favor of the plaintiffs can meet this threshold requirement for entitlement to attorney's fees," wrote the attorneys.

"The law allows for the prevailing party to seek recovery of attorney's fees," stated Entergy spokesman Chanel Lagarde in a press release. "We believe this is the appropriate next step for our company in this case where we were compelled to challenge several Vermont state laws that we believed were unconstitutional and were in fact found to be unconstitutional."

Pat Parenteau, Senior Counsel to the Environmental and Natural Resources Law Clinic and Professor of Law at the Vermont Law School, said Entergy's filing made a couple of things quite clear.

"If there was any doubt about Entergy's scorched-earth policy toward the state of Vermont, it's been resolved," he said. "When you couple this motion with the motion to the Public Service Board, which is ‘Give us our certificate of public good and give it to us now,' it's an in-your-face kind of move."

Parenteau said the second thing Entergy's filing made clear is that "It's now beyond question that Vermont must appeal Murtha's decision."

However, there is a risk that Entergy could win an appeal, he said, and could "keep the meter running."

"That's something (Attorney General Bill) Sorrell has to weigh, but this pushes him strongly in the direction of having to make an appeal."

Sorrell said he understood Entergy might submit such a filing with the court, but as late as Wednesday, Feb. 1, Entergy CEO and President J. Wayne Leonard said during a quarterly conference call that it had not yet decided to file a claim.

"That led to speculation on the part of some that they might try to curry some favor in the state by not going after attorneys' fees," said Sorrell. "Some people thought to make up for past sins, if they wanted to be solid corporate citizens, they wouldn't file, but they decided otherwise."

The $4.62 million is more than 12 times what the state spent defending itself, said Attorney General Bill Sorrell.

"They went out and bought about as expensive a law firm as they could, and they have every right to do that and they have the money to do that," said Sorrell. "When you're up against a company with the resources of Entergy and you are a small state, there is a David versus Goliath aspect to it."

Sorrell said his office is in the process of preparing its response, but won't be able to present its response to the court until it gets a complete breakdown of Entergy's fee structure and everything it spent money on.

"This case was litigated in Vermont," said Sorrell. "Are these fees well in excess of cases litigated here? If so, should we be paying New York City legal rates?"

Sorrell admitted this isn't the first time the state has been asked to reimburse legal fees.

In two recent cases, one regarding a campaign financing law and the other regarding a law prohibiting pharmaceutical data mining, the state paid for attorneys' fees.

But, said Sorrell, the state has recovered more than $80 million in enforcement actions over the past two years.

"This idea that I'm tilting at windmills and costing the state money ... I'm just enforcing the laws that the Legislature passed. I will defend the laws when they get challenged, otherwise I would be shirking my responsibilities."

Parenteau said if the state's case is "argued better" at the appellate level, it should be able to convince the court that many aspects of Murtha's decision were wrong -- including his interpretation of the Commerce Clause, the Supremacy Clause and his view on a price purchase agreement between Entergy and the state's utilities.

Paul Burns, the executive director of the Vermont Public Interest Research Group said Entergy should have spent the $4.6 million on Yankee, rather than on suing the state.

"Why is it that when it comes to cooling towers, pipes, valves and steam dryers, Entergy Louisiana pinches pennies until the plant literally falls apart, but when it comes to suing the people of Vermont, money is suddenly no object?" he stated in a press release. "Imagine if they had spent nearly $5 million extra dollars on some more plywood, WD-40 and duct tape at the plant. Maybe Entergy could have avoided polluting Vermont's water with tritium and other radioactive contaminants. Maybe its cooling towers would not have suffered such a catastrophic collapse."

Bob Audette can be reached at raudette@reformer.com, or at 802-254-2311, ext. 160.


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