Entergy sues Vermont
BRATTLEBORO -- The decision to file suit against Vermont was its "least favored approach," said Richard Smith, president of Entergy Wholesale Commodities, but the Legislature's refusal to allow the Public Service Commission to issue a certificate of public good for Vermont Yankee's continued operation "has left us with no other choice but to seek relief in court."
Early Monday morning, Entergy issued a press release announcing its decision to file suit in U.S. District Court in the state of Vermont, seeking a declaratory judgment to prevent the state from shutting down the nuclear power plant in Vernon.
"It is clear our disagreement with the state of Vermont on the scope of its authority over Vermont Yankee cannot be resolved between the two parties," said Smith, during a teleconference. "Putting this dispute before a federal judge is the appropriate and responsible way to resolve this disagreement."
State officials respond to the suit, here.
Last month, the Nuclear Regulatory Commission approved Entergy's relicensing application for Yankee, which authorized the plant to keep operating 20 years past its original license expiration date of March 21, 2012.
But in 2006, the Vermont Legislature passed Act 160, which gave it the power to prevent the PSB from issuing the certificate, which Yankee needs to continue operation. When Entergy bought the plant in 2002, it agreed in its memorandum of understanding to abide by the PSB's decision.
But Smith said the Legislature's passage of Act 160 "placed Vermont Yankee's fate in the hands of political decision-makers (depriving Entergy) of the opportunity to operate the Vermont Yankee plant ... for unsupported or arbitrary reasons."
Smith said no company likes to take legal action, particularly in a state where it operates.
"We made this decision after much consultation and examination of all possible options," he said. "We believe the General Assembly changed the rules and left us with no other choice."
Smith said the public will hear from those opposed to Yankee's continued operation that Yankee is going back on its word and is breaking the deal it made in the 2002 memorandum of understanding.
"This is not true," he said.
He said that Entergy disagreed with Act 160, but had made "considerable effort to achieve state approvals to allow the continued operation of Vermont Yankee without resorting to litigation."
Those efforts included offering Vermont utilities a 20-year power purchase agreement at a fixed price of $49 per megawatt hour for the first contract year, followed by a market-adjusted pricing structure that ensured the utilities and their customers would benefit from low power market prices, which was well below comparable offers from other electricity providers.
Entergy also offered to negotiate with the Vermont Department of Public Service the establishment of a "date certain" for the commencement of decommissioning activities at Vermont Yankee earlier than the 60-year SAFSTOR period permitted by NRC regulations.
In addition, Entergy explored the potential sale of Vermont Yankee.
"Despite interest from some potential buyers, based largely on the superior operational record of the plant, Entergy was unable to reach commercial terms with any party due to the political uncertainty in Vermont; more specifically, due to the stated intent of Vermont officials to shut down the plant," said Smith.
"We believe we have made every reasonable effort to accommodate the state of Vermont ..." he said. "After exhausting all avenues, we reluctantly decided to seek relief in the federal court system."
The state also needs to consider Yankee's importance to the New England grid, the fact that it emits virtually no greenhouse gases, that its operation contributes $100 million in economic benefits to the state and that it employs 650 people.
Because of the hard work of those employees, said Smith, Yankee has been one of the top performing nuclear power plants in the country and operated for 532 days straight between the last two refueling outages.
He also said that recent polling revealed more Vermonters want the plant to stay open than see it shut down.
Entergy's lawsuit is partially based on a 1983 Supreme Court decision, which ruled states have no authority over nuclear power plant licensing and their operation of radiological safety.
Smith also noted that statements from Vermont officials that it would not allow continued operation if Entergy didn't offer a purchase agreement the state would consider agreeable violated the Commerce Clause of the U.S. Constitution, which prohibits the state from conditioning post-March 2012 operation of the Vermont Yankee Station on the plant's agreement to provide power to Vermont utilities at preferential wholesale rates.
"The Federal Power Act preempts any state interference with the Federal Energy Regulatory Commission's exclusive regulation of rates in the wholesale power market (and) The Commerce Clause of the U.S. Constitution bars a state from discriminatory regulation of private markets that favors in-state over out-of-state residents," stated Entergy's court filing.
Bob Audette can be reached at email@example.com, or at 802-254-2311, ext. 160.
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