Editor’s note: This op-ed is by James Leas, an attorney in Burlington. This is the first in a series of commentaries about Entergy’s case against Vermont Yankee.
Implementing a two-pronged attack, Entergy is combining court action with a massive public relations campaign to keep its Vermont Yankee nuclear plant operating after March 21, 2012. The effort to win over public support — or at least prevent a landslide of opposition to its suit in Vermont — is an essential part of Entergy’s legal strategy. The public relations campaign is especially important in view of Entergy’s case against Vermont state officials being so incredibly weak.
Entergy’s suit in federal court against Vermont seeks an injunction to prevent enforcement of Vermont law regarding the extended operation of Vermont Yankee and to prevent state officials from taking any steps to shut down Vermont Yankee on its scheduled closing date of March 21, 2012.
Entergy also wants the court to issue a judgment that federal law preempts Vermont officials from requiring Entergy to have any kind of state approval of a certificate of public good to operate the plant or store spent fuel there. The suit also seeks a court judgment that federal law preempts Vermont officials from conditioning operation of the plant after March 21, 2012 on Entergy’s agreement to provide below-market electricity rates to Vermont.
One day after filing its suit Entergy published full page ads in newspapers around the state with a folksy sounding letter to Vermonters signed by J. Wayne Leonard, Entergy’s Chairman and CEO.
Leonard’s letter asserts that Entergy’s rights are being violated by Vermont. Leonard acknowledges that Entergy “entered into an agreement with the state that we would secure a Certificate of Public Good from the Vermont Public Service Board if we wanted to extend the license of the plant beyond March of 2012.” But Leonard says that in 2006 the General Assembly “substantially changed our agreement with the state and deprived us of certain critical rights that we relied upon in purchasing the plant.” The letter recognizes that many Vermonters do not agree with extending operation of Vermont Yankee past 2012, but Leonard appeals to the fair mindedness of Vermonters and seeks to persuade us that Entergy has law on its side and its cause is just.
Specifically, Leonard charges that Act 160, the law passed by General Assembly in 2006 (unanimously in the House, 18-5 in the Senate, and signed by Governor Jim Douglas) denied Entergy its rights.
Act 160 provided that Vermont Yankee could not operate beyond the date permitted in its certificate of public good, March 21, 2012, unless the Vermont legislature approved and until the public service board issued a certificate of public good.
On February 24, 2010 the Vermont Senate voted down S.289 by a vote of 26-4. The bill if passed, would have approved the continued operation of the VYNPS and the storage of spent nuclear fuel derived from the operation of the VYNPS until March 21, 2032.
Leonard claims that Entergy’s rights were denied.
Each of the bills introduced over the past year to grant such approval has either been voted down or allowed to languish. Whether it’s a “no” vote, or no vote at all, the effect is the same. The legislature has denied Entergy the opportunity to secure a Certificate of Public Good (CPG) from the Public Service Board.
This is obviously entirely different from what we agreed to back in 2002. We agreed to a process in which an independent expert agency would decide Vermont Yankee’s future based on evidence and facts developed through an impartial process with the possibility, if necessary, of court review. We did not agree to a process involving the Legislature, which is inherently political.
The Senate vote was indeed political in the sense that it conformed to the will of a majority of the people of Vermont. For example, it was consistent with town meeting votes in 51 Vermont towns in 2009 and 2010 that asked the legislature to “(1) deny approval for the operation of Vermont Yankee after March of 2012, which marks the end of its 40 year design life; (2) require that the Entergy Corporation of Louisiana fulfill its pledge to fully fund the cleanup and decommissioning costs of closing Vermont Yankee; and (3) seek safe, renewable, regional sources of electricity combined with efficiency and conservation measures to replace the power presently provided by Vermont Yankee.”
The Senate and town meeting votes were affirmed in the gubernatorial election when the candidate most clearly calling for Vermont Yankee to close on schedule won a primary election and the general election.
The agreement Leonard says that Entergy entered into with the state is called a “Memorandum of Understanding” (MOU). Along with three Vermont utilities (GMP, CVPS, and VYNPC) and the Vermont Department of Public Service (DPS) two Entergy-owned companies (called ENVY and ENO) that now own and operate Vermont Yankee signed the MOU on March 4, 2002. VYNPC is the Vermont Yankee Nuclear Power Corporation, the company that previously owned and operated the plant and sold the plant to Entergy. The DPS is an executive branch agency that supported Entergy’s offer to buy Vermont Yankee based on Entergy signing the MOU. Also mentioned in the MOU is the VYNPS which is the Vermont Yankee Nuclear Power Station. “The Board” is the Vermont Public Service Board. Only one paragraph of the MOU is relevant to permission for operation of Vermont Yankee after 2012. Here is the full text of this paragraph:
12. Board Approval of Operating License Renewal: The signatories to this MOU agree that any order issued by the Board granting approval of the sale of VYNPS to ENVY and any Certificate of Public Good (“CPG”) issued by the Board to ENVY and ENO will authorize operation of the VYNPS only until March 21,2012 and thereafter will authorize ENVY and ENO only to decommission the VYNPS. Any such Board order approving the sale shall be so conditioned, and any Board order issuing a CPG to ENVY and ENO shall provide that operation of VYNPS beyond March 21,2012 shall be allowed only if application for renewal of authority under the CPG to operate the VYNPS is made and granted. Each of VYNPC, CVPS, GMP, ENVY and ENO expressly and irrevocably agrees: (a) that the Board has jurisdiction under current law to grant or deny approval of operation of the VYNPS beyond March 21,2012 and (b) to waive any claim each may have that federal law preempts the jurisdiction of the Board to take the actions and impose the conditions agreed upon in this paragraph to renew, amend or extend the ENVY CPG and ENO CPG to allow operation of the VYNPS after March 21,2012, or to, decline to so renew, amend or extend.
The Vermont General Assembly was not a party to the agreement. Nothing in this paragraph says that democratic decision making is barred in Vermont or that decisions must only be made by “an independent expert body.”
In exchange for Entergy’s agreement to the MOU, Entergy got crucial DPS support for the Board to approve Entergy’s offer to purchase and operate Vermont Yankee. The Board approved the purchase based on the supporting recommendation from the DPS. Since its 2002 purchase, Entergy has raked in billions of dollars of revenue from the sale of electricity from Vermont Yankee. If Entergy manages to keep Vermont Yankee running, Entergy would take in another $6 billion from electricity sales over the next twenty years at current 6 cents/kW-h market prices.
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Good overview. While paragraph 12 (quoted above) is the most important part of the document relevant to the approvals needed, it is supported by paragraph 16(1), which recognizes disputes will arise from time to time, and establishes a mechanism for resolving those disputes. In this case, both Entergy and the other signatories agreed that any dispute would be handled under Vermont law, by the Public Service Board.
The terms of paragraph 12 are in dispute, and Entergy should have first gone to the PSB for resolution. Indeed, the federal courts should immediately send Entergy back to the state level, and should deny the preliminary injunction because the “urgency” claimed by Entergy, was created by Entergy’s failure to pursue resolution at the state level in a timely manner.
It may be that the PSB decides that the intent of the Parties in 2002 was to recognize the potential for the kind of legislative action we see now, in which case the authority of Act 160 would stand, and the matter should be closed. Or, the PSB might decide that the Parties could not have anticipated such heavy-handed legislative action, and that paragraph 12 doesn’t apply to the situation at hand, which would then open the dispute to other legal avenues. In any event, Entergy should have begun their argument regarding state authority to grant or deny a continuing CPG at the Public Service Board, as they agreed to do in 2002. It is fully inappropriate to skip that step, and then claim that the PSB process is somehow tainted, as Entergy appears to be doing now.
The second part of the Entergy complaint revolves around the commerce clause and challenges to FERC authority, but those elements should wait until there is an actual decision from the Board. At this juncture, the requirement for a PPA has been argued by the legislature and the Department of Public Service (and other Parties before the Board), but the Board has not issued any decision, and thus denial of the CPG is not now be based on a commerce or FERC conflict.
Paragraph 16(1) of the 2002 MOU is a common element of many agreements and reads as follows:
“16. Additional Provisions:
1. This Memorandum of Understanding is governed by Vermont law and any disputes under this Memorandum of Understanding shall be decided by the Board.”
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Does anyone have a verified copy of the MOU they can post as a link??
Thanks.
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Entergy agreed to the law and even pushed for it to pass. Now they want to break Vermont law and continue running while they clog our courts with a frivolous law suit.
The Corporation Entergy is willing to break our laws out of GREED! I for one do NOT trust a corporation that operates on the GREED concept!
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As requested above:
Link to the MOU: http://publicservice.vermont.gov/dockets/6545/MOUfinal40305.PDF
Link to the PSB page on the sale docket (limited material available: http://publicservice.vermont.gov/dockets/6545/6545.html
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Thank you.
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Mssrs. Leas and Buchanan have done an excellent job dismantling the nonsense in Entergy’s briefs.
Two other points. First, Entergy’s main case is one that it has made — unsuccessfully — over and over again at the Public Service Board, namely that in US law, ONLY the federal government regulates nuclear power plants. In arguing for this, Entergy presents an extraordinarily contorted reading of the Pacific Gas and Electric case from 1983 in which a unanimous court upheld CA’s right to put a moratorium on nuclear plant construction until the economics of waste disposal could be properly integrated into decisions about power plants. The Court recognized the scheme of “dual regulation” of nuclear power, giving the federal government the exclusive right to consider “safety and the “nuclear aspects” of energy generation’ (a point which 2 judges gave the feds too MUCH authority) and noting that the States could regulate in the areas of their “traditional authority.” Entergy’s brief mention NONE of this.
In passing, it should be noted that the NRC — traditionally jealous of its regulatory “turf” — has made it quite clear that it has NO interest in intervening in this case and has repeatedly explicitly recognized the State’s right to demand permits, etc. of Entergy.
Second, following this remarkable and novel interpretation of the regulatory structure of the US, and despite what Leonard and his minions have been saying about Act 160, Entergy says explicitly in its brief (p. 14) that the PSB NEVER had the authority to regulate it, thus explicitly contradicting its agreement to the language of Section 12 quoted by Mr. Leas. It is also worth noting, in view of Entergy’s argument about a legislative usurpation, that neither DPS nor PSB were among those who, “expressly and irrevocably agree(s)” to the language in section 12; the list consists only of the utilities in the case.