Now that a federal judge has ruled in favor of Entergy, Vermonters are reflecting on what the decision means for the state and for future regulation of nuclear power facilities.
On Thursday, United States District Judge J. Garvan Murtha ruled that the Atomic Energy Act preempted two Vermont laws: one that prohibited the Vermont Yankee Nuclear Power Plant from operating beyond March without legislative approval and another that required Entergy to obtain permission to store high level nuclear waste at the site. Murtha’s decision also enjoined the Vermont Public Service Board from conditioning the issuance of a certificate of public good for continued operation on the existence of a below-wholesale-market power purchase agreement between Entergy and Vermont utilities.
Lawyers, lawmakers and Vermont citizens are sifting through the 102-page opinion, trying to determine just what it means for Vermont and the rest of the country.
One consistent response is that Judge Murtha bought Entergy attorney Kathleen Sullivan’s legal theory hook, line and sinker.
Cheryl Hanna, a constitutional law professor at Vermont Law School, has been following the case.
“The judge essentially agreed with their attorney Kathleen Sullivan that the legislature’s motive was safety,” she said.
Under U.S. Supreme Court precedent, states are preempted from regulating the radiological safety aspects involved in construction and operation of nuclear power facilities.
During the three-day trial in September, Entergy lawyers trudged through an exhaustive review of the legislative history of the Vermont law picking up references to safety concerns.
Murtha’s decision draws from that effort. The first 55 pages, or about half of the opinion lays out, in almost an academic way, the instances where lawmakers made references to radiological safety.
The decision states: “references, almost too numerous to count, however, reveal legislators’ radiological safety motivations and reflect their wish to empower the legislature to address their constituents’ fear of radiological risk, and beliefs that the plant was too unsafe to operate, in deciding a petition for continued operation.”
This record of statements addressing safety will make it an uphill battle for the state to appeal the case to the Second Circuit Court of Appeals, Hanna said.
“The problem going forward is that everything has been tainted by what happened,” Hanna said.
As a practical matter, Hanna said, federal law makes it very difficult for states to regulate nuclear energy. The confusion over what constitutes safety and what states are actually allowed to regulate in this field add a layer of difficulty for the attorney general in giving the legislature frank advice about these types of cases. The extensive record of safety references make an appeal even more difficult, Hanna said.
“It’s a long way from done, but I have a hard time imagining a legal scenario where the state will be allowed to shutter Vermont Yankee,” she said.
For now, the Vermont Public Service Board has the ball. The certificate of public good for Vermont Yankee is set to expire March 21, and Murtha’s decision requires Entergy to go back to the board for a determination that continued operation of the plant will in fact serve the public good.
Part of Judge Murtha’s decision narrows the scope of the board’s review somewhat. Under the ruling, the board cannot condition a certificate of public good for Vermont Yankee to remain in operation on a below-market power purchase agreement with Vermont utilities. Murtha found this type of requirement violates the dormant Commerce Clause of the federal constitution, which prohibits states from placing an undue burden on interstate commerce.
The Public Service Board will also clearly not be able to base a denial of a certificate of public good on radiological safety concerns.
A more nuanced issue that may emerge is the fact that Vermont’s two largest utilities, which represent somewhere around three-quarters of the market in the state, have already locked into other contracts in anticipation of Vermont Yankee’s closure.
Green Mountain Power entered a new contracts with Hydro-Quebec and plans to get additional power from the Seabrook Nuclear Power Plant in New Hampshire.
Dorothy Schnure, a spokeswoman for Green Mountain Power, said Vermont Yankee currently provides about 40 percent of its power, but that contract expires in March. The utility could not reach an agreement with Entergy, and given the uncertainty of the plant’s continued operation, opted to get power elsewhere. Schnure said the utility does have openings a few years out, however, that could be filled with Vermont Yankee power.
Steve Costello, director of public affairs for Central Vermont Public Service, said the utility has filled its needs with other energy sources.
“Essentially, we don’t have a dog in the fight any more related to the plant,” Costello said.
Their power contract is up in March also, and CVPS has found a relatively stable power supply with Vermont Yankee.
The only tie the utility has to Vermont Yankee is a revenue sharing agreement whereby if the plant sells electricity at above a certain rate after 2012, the utilities will receive a share.
This begs the question: Is it in the general good of the state to continue operating Vermont Yankee if all the power is sold out of state?
Pat Parenteau, a professor of law at Vermont Law School, said the state likely cannot deny a merchant plant the ability to sell power out of state. Even if Vermont gets no benefit from the plant it may still have to let it operate. The issue is whether the board can find a way to deny a certificate of public good based on something besides safety concerns.
“The real focus now is Public Service Board,” Parenteau said. “They need to make a better case there with non-radiation reasons to shut it down.”
As for an appeal, Parenteau said the state is stuck with a bad record with all of the references to safety that make it seem like this was the legislature’s purpose. Whether to appeal, however, is a tough call.
Parenteau said the state could have a case for appealing the part of Murtha’s decision that implies that any discussion of radiological safety taints the whole process. That’s not what the Supreme Court precedent says, according to Parenteau, and it is a fair issue to litigate.
“His [Murtha’s] interpretation not totally irrational, but it’s not the only interpretation,” Parenteau said.
The record, both Parenteau and Hanna agree, will present a huge hurdle should the case go forward. Both agree the legislature could have received better legal advice spelling out what it really could and could not do in enacting legislation.
Vermont Attorney General Bill Sorrell said his office has yet to decide whether to appeal Judge Murtha’s decision. The state has 30 days to decide.
“The court found the laws were invalid because they were prompted by concerns for radiological safety and consequently should be struck down,” Sorrell said. “There wasn’t deference to the legislature, and we’re disappointed in that.”
Sorrell said the court read too much into the legislative history.
“To take statements during legislative hearings of a few legislators and say all or a majority of legislators were in fact motivated by safety concerns is a leap,” he said.
The legislative history produced by Entergy attorneys includes statements of experts hired by legislative counsel informing lawmakers they cannot base a law on radiological safety. Entergy used these statements to imply an impermissible purpose.
“You can argue lawyers were trying to create a sham situation for the legislature,” Sorrell said. “On the other side of coin, lawyers are trying to protect integrity of the legislative process and make sure the legislature didn’t break the law. It only seems prudent that the legislature receive advice about how to do it properly.”
Sorrell mentioned that he has succeeded in overturning a decision by Judge Murtha in the Second Circuit. In the data mining case Sorrell v. IMS Health, the attorney general successfully appealed a decision in the Second Circuit but lost in the U.S. Supreme Court.
Sandra Levine, senior attorney with the Conservation Law Foundation in Vermont, called the decision a setback for Vermont and for clean energy going forward.
“This is a plant with a long and troubled history with operators providing false information to regulators, and it has completely lost the trust of Vermonters,” she said.
The Conservation Law Foundation filed a brief as amicus curiae supporting the state in the case.
The good news for environmentalists who supported shuttering the nuclear power plant, Levine said, is what Judge Murtha’s opinion did not say.
“The good news is that much of what has been accepted as state regulation remains in place,” she said.
For example, Entergy still needs to obtain a certificate of public good, and the Public Service Board can address economic and reliability issues.
Levine contends that the purpose of the law does not address safety, and Judge Murtha dug deep into the testimony to make a factual determination that the legislature based its laws on safety concerns. The next show, Levine agrees, will be with the Public Service Board, where Entergy will need to demonstrate the aging nuclear power plant is in the general good of the state. If the board denies a CPG, Entergy could appeal that decision to the state supreme court.
While Entergy released a statement Thursday praising the decision, Gov. Peter Shumlin and some Vermont lawmakers lamented.
Entergy’s statement read: “We’re pleased with the decision, which Judge Murtha issued after a thorough review of the facts and the law. The ruling is good news for our 600 employees, the environment and New England residents and industries that depend on clean, affordable, reliable power provided by Vermont Yankee.”
The corporation has not expanded on this statement.
Shumlin’s released statement read: “I am very disappointed in today’s ruling from the federal court. Entergy has not been a trustworthy partner with the state of Vermont. Vermont Yankee needed legislative approval 40 years ago. The plant received approval to operate until March, 2012. I continue to believe that it is in Vermont’s best interest to retire the plant.”
Rep. Tony Klein, D-East Montpelier, has been fighting to shutter the plant for years. Klein, who chairs the House Committee on Natural Resources and Energy, said he was disappointed that a Vermont judge went the route Murtha did.
Saying the legislature intended to regulate radiological safety based on legislative history is nonsense, Klein said.
“To ask me to strike the word safety from my vocabulary for 10 years is outrageous,” Klein said. “What we are not allowed to do is pass legislation based on safety, and we didn’t.”
Klein introduced a law this term to establish a tax on the storage of spent nuclear fuel in Vermont. He says he plans to continue pursuing that legislation.
John Campbell, President Pro Tempore of the Senate, said he was still reviewing the intricacies of the opinion. It seems, however, to be a further degradation of states’ rights, he said.
Campbell said he was curious to see how certain evidence came into play, particularly all of the references to safety in the record. Other evidence never emerged, Campbell said, like discussion in the Senate concerning the reliability of the plan that would have justified taking it off line.
The next step for the Vermont Yankee show will be the Public Service Board. Beyond that is anyone’s guess.