Lawyer: 'There is no way the state should lose'
EDITOR'S NOTE: This is the fourth in a series of stories exploring the issues raised by Entergy's lawsuit against the state over the continued operation of Vermont Yankee nuclear power plant.
BRATTLEBORO -- Pat Parenteau, senior counsel to the Environmental and Natural Resources Law Clinic summed up in six words what he thinks the chances are that Entergy will win the lawsuit it filed against Vermont over the continued operation of Vermont Yankee nuclear power plant in Vernon: "I think they're going to lose."
"If this case is properly framed and argued, there is no way the state should lose," he said.
Last month, Entergy, which owns and operates Yankee, filed a lawsuit against the state claiming its attempt to forbid continued operation of the plant past March 21, 2012, was infringing on the federal jurisdiction of the Nuclear Regulatory Commission.
"The basic argument is: Does federal law -- the Atomic Energy Act -- mandate that the state of Vermont accept the continued operation of a nuclear power plant?" said Parenteau.
In 2002, when Entergy purchased the plant, it signed a memorandum of agreement with Vermont that included a number of conditions Entergy had to agree to prior to the sale.
Entergy is arguing that two of those conditions -- that the PSB has jurisdiction under current law to grant or deny approval of the plant's continued operation and that Entergy waive any claim it might have to federal preemption of any actions taken by the board -- are no longer valid due to two actions that have occurred since the MOU was signed.
The first, that the Legislature passed Act 160 in 2006 giving itself the authority to forbid the PSB from issuing a certificate of public good; and the second, that the Legislature's discussion to give permission to the PSB to issue the CPG was based on an area of review that is under the sole jurisdiction of the NRC -- safety of the plant.
If the court hearings focus on the preemption argument, said Parenteau, and don't veer off into what legislators might have or might not have said during discussions over the plant's continued operation, which he called "a confusing morass," the state should prevail.
"If Vermont sticks to the law and doesn't try to justify statements made, they are OK," said Parenteau.
The state needs to stay focused on the core preemption issue, he said.
In March, the NRC approved Entergy's application for a 20-year extension of Yankee's original, 40-year license. But in January 2010, the Vermont Senate voted 26 to 4 in opposition to continued operation. The House declined to vote on the issue. The NRC has stated it will not get involved in the legal argument between Vermont and Entergy.
The strongest factor in Vermont's favor, said Parenteau, is a decision rendered by the U.S. Supreme Court that affirmed a finding issued by the Ninth Circuit Court of Appeals in a dispute between Pacific Gas and Electric and California.
In that decision, the court found that the Atomic Energy Act called for a system of dual regulation over nuclear plants: The federal government held control over safety issues while states exercised "their traditional authority over economic questions such as the need for additional generating capacity, the type of generating facilities to be licensed, land use, and ratemaking."
As long as the Vermont Legislature's decision was based on the economics and reliability of the continued operation, the state has the right to deny a CPG, said Parenteau.
The court also concluded that even if the NRC approved a relicensing application, a state could forbid a nuclear power plant's continued operation on the basis of how much spent fuel might be produced by the power plant.
As there was no attempt on California's part to enter the field of developing and licensing nuclear waste disposal technology, wrote the court, it was not stepping on the toes of the NRC.
In addition, the Nuclear Waste Policy Act, enacted into law by Congress in 1982, did not appear to have been passed with the intention of superseding a state's decision-making power with regard to waste disposal and the opening of new plants, wrote the court.
The court also wrote that "Promotion of nuclear power is not to be accomplished ‘at all costs,'" adding Congress had given the states the authority to decide whether to build a nuclear plant.
"California's decision to exercise that authority does not, in itself, constitute a basis for preemption," wrote the court.
According to that decision, it doesn't make any difference if the power plant under contention is one that has yet to be built or one that has reached the end of its license or certification, said Parenteau.
"A state is not obligated to issue certificates ad infinitum," he said.
Vermont must appeal to the district court to deny Entergy's contention that legislators crossed over into federal jurisdiction when discussing the issue of continued operation, said Parenteau.
"The concern I have is the case would get muddled and confused and we would get some kind of weird procedural ruling from the court," he said. "That would cast a shadow over this whole case."
Entergy is attempting to attribute motives to the legislators, which he believes shouldn't be admitted as evidence into the hearings, a denial that has precedent in its favor.
"Justice White said (in the PG&E case) he was not going to look behind what the state said," said Parenteau.
As long as California based its decision on the economics and reliability of the power plant and its land use, it was entitled to issue a denial, concluded the court.
That should also hold true in Vermont, said Parenteau.
"What the individual legislators were thinking is irrelevant," he said.
Parenteau also believes that at least one of Entergy's claims will be denied by the court: That the state is violating the Interstate Commerce Clause by demanding a favorable rate for the purchase of electricity in exchange for a CPG.
"First, it's not the state, but the utilities that buy the power," he said. "It's a real contortion to say the state is coercing Entergy for a better rate when it's the utility that is saying no."
Parenteau pointed to the decision last month by the Vermont Electric Co-op to reject a power deal from Entergy.
"Entergy offered VEC a below-market rate and they said no," he said.
Rep. Dick Marek, D-Newfane, agreed with Parenteau's conclusion, because Entergy has cited for years the reason it should be given extended operating permission is that it offers very favorable electric rates, he said. Now it's claiming that by demanding favorable rates the state is violating the Interstate Commerce Clause, said Marek.
"Apparently they never intended to give Vermont any favorable electric rates," he said. "It's an absolutely unfathomable position. It just boggles the mind."
Bob Audette can be reached at email@example.com, or at 802-254-2311, ext. 160.
Tomorrow: The New England Coalition asks the federal court to admit it as an intervenor in the court case between Entergy and Vermont.
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