Analyst: No VY shutdown in 2012


BRATTLEBORO -- According to Jefferies, an investment advising company, Entergy will continue to operate Vermont Yankee nuclear power plant in Vernon beyond the March 2012 cut-off date.

"That would force the state to file a lawsuit in federal court seeking a shutdown of the plant," stated the report, which was issued on Tuesday.

Entergy has a strong defense it can present in court, stated the report, in claiming that Vermont is attempting to pre-empt federal law and regulation.

"We believe it is presumptuous to assume that the plant will be shut down or that Entergy would lose the lawsuit," states the report.

"It does look like a showdown is coming," said Patrick Parenteau, professor of law and senior counsel at the Environmental and Natural Resources Law Clinic at the Vermont Law School.

However, he added, the state may have a pair of trump cards in its back pocket.

"The first is that the state doesn't have to go to court to shut Yankee down," said Parenteau. "It can simply order (Vermont Electric Company) to disconnect the plant from the grid."

Velco maintains the state's transmission lines and runs the power switchyard that connects Yankee to the New England power grid.

Kerrick Johnson, a spokesman for Velco, said it would not speculate on litigation that has not yet been enjoined.

"I would simply say that Velco will continue to follow all applicable federal and state laws," said Johnson.

Secondly, said Parenteau, "Entergy would be crazy to keep operating in open defiance of state law. That would put Entergy in the worst possible posture before the federal court. If Entergy wants to challenge the constitutionality of the state law, it would be better advised to seek a declaratory ruling from the court before the expiration date arrives."

Entergy recently received a new license from the Nuclear Regulatory Commission to operate Yankee for another 20 years past March 2012, its original expiration date.

However, when Entergy purchased the power plant in 2002, it signed a memorandum of understanding with the state that it would abide by the Vermont Public Service Board's decision on whether it should receive a certificate of public good, which is required for continued operation.

In 2006, the Vermont Legislature passed Act 160, giving itself the power to forbid the PSB from issuing a CPG without the Legislature's approval.

In January of 2010, the Vermont Senate voted 26 to 4 against allowing the PSB to issue a certificate of public good.

Parenteau also said that if Entergy continues the operation of Yankee, it is placing "a hefty wager on its legal theory that it is not bound by the contract it signed in 2002," because one of the conditions of the NRC's relicensing is that Entergy spend hundreds of millions of dollars on the replacement of the plant's condensers, which cool reactor water.

"And of course, there's still the business about ‘misleading' the PSB about the tritium pipes," he added.

The Vermont Attorney General's office is in the process of investigating whether Entergy representatives knowingly gave false or misleading information to the state in 2009 about the status of buried and underground pipes at Yankee.

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Sarah Hofmann, the deputy commissioner of the Vermont Department of Public Service, said the state expects Entergy to abide by its memorandum of understanding.

"If Entergy wants to operate the station after that time, it needs an affirmative vote by the Vermont General Assembly and a new certificate of public good from the Public Service Board," she said.

Vermont Attorney General William Sorrell that, according to Act 160, which is Vermont law enacted by the Legislature, Entergy can't continue to operate without a certificate.

"Not without a big fight," he said. "We will do all in our power to see that Vermont law is obeyed."

The Senate has already stated "very vehemently" when it voted 26 to 4 that it is against the plant's continued operation, said Sorrell.

"Consequently, there is no permission from the state for Yankee to operate beyond 2012 unless the Legislature changes its course," he said.

In its report, Jefferies noted that the state cannot refuse to issue a certificate based on radiological safety issues, which falls under the NRC's purview.

The state can only base its decision on the reliability of the plant and any impacts its operations might have on the environment.

"As for the plant reliability issue," stated the report, "Vermont Yankee has had an average capacity factor of more than 94 percent in the past five years ..."

The plant's National Pollution Discharge Elimination System permit will soon be up for review by the Vermont Agency of Natural Resources. It is unclear how that might affect the plant's operation. It's also not clear if the review will even be completed by March 2012.

Entergy might also have an argument in court based on a clause in the MOU that states operation of the plant has to "promote the general welfare" of the state.

"Our legal contact at the Vermont Department of Public Service noted that there is no standard in the law that defines ‘general welfare,'" stated the report.

The report pointed out that Entergy was unable to finalize new 20-year power purchase agreements with Central Vermont Public Service and Green Mountain Power "because of the uncertain political environment."

Steve Costello, spokesman for CVPS, said both CVPS and GMP agreed on "a lot of things (with Entergy) but we never got a deal we thought we could get approval for."

And even if the two utilities had reached a tentative agreement with Entergy, "We wouldn't sign a contract without Vermont's backing," he said.

Last week, Entergy announced it had presented a proposal to sell 10 megawatts for 20 years to the Vermont Electric Cooperative in northern Vermont.

VEC's board of directors will vote on the proposal at the end of this month; however the company's president said many board members are hesitant to approve the contract in light of the ongoing nuclear crisis in Fukushima, Japan, and because of the storage of nuclear waste on-site in Vernon.

At the time the proposal was announced, CVPS and GMP both said they would not sign a contract to purchase electricity from Yankee unless Entergy sold the plant and it received a certificate of public good from the state.

Bob Audette can be reached at, or at 802-254-2311, ext. 160.


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