Entergy sues Vermont over $12.5 million electrical generation tax

Vermont Yankee’s parent company Entergy filed a new lawsuit on Tuesday in federal court against Gov. Peter Shumlin, Attorney General Bill Sorrell and Commissioner of the Vermont Department of Taxes Mary Peterson for a tax levy that Entergy is calling “unconstitutional.”

Entergy aims to overturn an electrical generation tax passed during the 2012 legislative session (in House Act 782), which charges the nuclear power plant Vermont Yankee $0.0025 per kilowatt-hour and raises roughly $12.5 million in annual state revenue. Entergy argues it has no way to challenge or seek review of the tax in Vermont, and so the Louisiana-based company has turned to the U.S. District Court.

Lawyers for Entergy contend “the Legislation imposes an illegal and burdensome new exaction on this important provider of interstate electric power.”

The lawsuit paints a picture of state retaliation. When Entergy sued Shumlin and the state of Vermont for trying to shut down Vermont Yankee, the state lost. U.S. District Court Judge J. Garvan Murtha ruled in January that Entergy could continue to operate past the state-mandated shutdown date of March 21. The tax legislation passed several months later, and Entergy says the measure was meant to “impose a new financial burden” on the company.

Before the new levy took effect in July, Entergy paid about $5 million in generating tax. Since 2005, the company has also paid $6 million annually into the state’s Clean Energy Development Fund for renewable energy projects. Entergy’s agreement to pay into that fund, however, expires at the end of 2012.

As VTDigger reported in April, legislators were planning to use a portion of that $12.5 million to prop up the renewable energy fund.

Entergy has proposed to pay the $5 million annually that it previously paid in generating tax.

Correction: In the U.S. District Court decision that permitted Vermont Yankee to continue operating this year, Entergy sued the state of Vermont, not the other way around as was stated in an earlier version of this story. Consequently, Shumlin and the state of Vermont filed an appeal on Feb. 18 to contest the decision.

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Comments

  1. Mike Kerin :

    Entergy has enjoyed artificially low taxes all along. They are storing more spent fuel on site than legally allowed. They have snubbed their nose’s at Vermont ever since they purchased the plant. Lying to the state and misinforming about everything.

    Close the plant down!

  2. ALEX BARNHAM :

    Last I knew, grit was something that you do not want to eat.
    Maybe entergy is something we do not want to use. Do not only spell it wrong, speak English.

  3. Sally Shaw :

    Bidnis as usual from the highly taxpayer-subsidized multinational that hides its profits in the Cayman Island to avoid paying taxes, pollutes our aquifer and river and air, leaves our next 100 generations of children with a deadly radioactive waste legacy, lies, bribes and bullies its way to whatever it wants to inflict on us. Time for this loser of a company to be run out of town on a rail.
    That said, we can thank the Douglas Administration and its minions like former Public Service Commissioner O’Brien for all the placebo unenforced MOU’s and ill-conceived deals that let Entergy off the hook in 2012 while continuing to contaminate our public trust resources for eons.

  4. Wendy Raven :

    One more bullying tactic in the long string of them from Entergy….we want this aging, trouble-prone, and Fukushima equivalent reactor shut down……the people of Vermont have spoken, the legislators have spoken, our leaders have spoken…it’s about time Entergy realizes they cannot keep playing fast and loose in our back yards and the yards of Mass. and N.H.

  5. Mike Kerin :

    Sally, you make good points and sense.Remember when then Gov. Douglas vetoed the bill to make Entergy fund the decommissioning account? That is when I knew that Douglas was bought and paid for by the nuclear industry.

    The news today said that Entergy has decided to pay the 5 million while the law suit is argued. That is arrogance. Arrogance seems to be one of their traits along with greed and dishonesty.

  6. William Schulze :

    The latest chapter in the state’s attempt to milk and eat the cow at the same time. Wake up IBM, if this is the way that “business” is done with the government of Vermont, you may be next. To those folks who believe that Vermont Yankee has been getting a cheap tax ride all along, hey, how much in tax are you getting from our Hydro Quebec buddies?!
    “Bullying tactic” my sweet patootie. The state can levy taxes whichever way they want. Clearly, they are trying to tax Entergy out of business in the state. Is that fair? Is that right? The people of Vermont have benefitted from years of reasonably priced and reliable electric power from Vermont Yankee. Not to mention getting taxes paid into the states coffers from both Entergy and Entergy’s employees.

  7. Denise Rumrill :

    Wendy… not all of the people of Vermont have spoken. I have been a Vermont resident for 58 years… I am also a taxpayer to the state of Vermont. I am also a Vermont Yankee supporter. Only part of the population actually agrees with what you state above. Just know that Vermont Yankee supporters are your neighbors as well and have been next-door residents to the plant all along the way. As far as paying low taxes and snubbing their noses at the state… there are two sides to every story. Too bad you don’t take the time to delve into the facts. You seem to listen with closed ears.

    • ALEX BARNHAM :

      Denise, you seem to have your head where the sun doesn’t shine. If you did realize the full extent of what is happening in Vernon, you would not be so smug. The readioative waste alone, to say nothing of the enormous cost of nuclear power being subsidized by the national debt, is so toxic, if it ever spills out, would ruin your day. Don’t count yourself part of the vasals who turn on their lights without a care, you are on the side of the fence that contains death to you and your family. Conserve power Denise and save this nation from disaster. Buy some solar panels and generate enough power to make the grid liveable. There is nothing wrong with the grid, there is something terribly wrong with radioactive waste. I am not advocating burning more fossil fuels, I am advocating living responsibly. CONSERVE, my dear, CONSERVE. Air dry your clothes, your dishes and use a renewable heat source. And pull your head out of the sand or your butt will get a sunburn.

      • Ed Carl :

        How is radioactive waste going to “spill over”? Waste is stored in solid ceramic rods encased in concrete and steel containers. It is not a liquid ready to spill out. Zero people in the history of nuclear power in the west have died from radiation.

        How do you figure that nuclear plants are contributing to the debt? Most all plants are completely paid off. Do you realize how much solar and wind is subsidized/kWh?

        I don’t want to have be forced to air dry my clothes. Why are we being pushed to move backwards? Let just take your logic to the real conclusion it leads to: why dont we stop using electricity completely? I guess people survived without it at one point so why do we need it now? I will not settle for expensive unreliable energy that renewables provide. Conservation will not make a dent in the increasing need for more energy to support the growing population. Conservation is good, but forcing people to do it through expensive energy is a step backwards in our progress as a species.

        • ALEX BARNHAM :

          Spent nuclear waste does not immediately get encased…it sits in a pool of water which is the big problem. Many people have died from handling nuclear fuel…you just don’t read about it in the Valley News. If the Vernon plant is so wonderful, why is the Ct River being used as a cooling system? And why are the decommissioning costs not being fully funded? There are MANY unanswered questions regarding the hidden costs of nuclear power. No one will be forced to do anything. No one will force you to buy electricity…you can make your own or figure out a way to conserve. The era of blowing up and burning entire mountains is over, though so we have to have a little mercy on others. The use of electricity is not the problem. We have MANY ways to generate power but the energy companies that monopolize the system have not chosen to cooperate with the environment so we have literally wasted a lot of valuable resources to fatten the wallets of the 1% at the expense of the health and well-being of the rest of the world. Please do not become a cheerleader for those who can only see $. There are those of us who adamantly oppose destroying the health of our planet because we are told we must. Our message is not one of doom and gloom, it is one of sit up and take notice.

        • Mike Kerin :

          Ed, the nuclear waste is stored in water until it has degraded enough to go into dry casks. Those pools containing radioactive water can and have leaked.

          Do you have any idea how much subsidizing nuclear gets? Solar and wind don’t get near as much.

          • Lance Hagen :

            Mike, you are incorrect on subsidies. According to the Dept of Energy the “Direct Federal Financial Intervention and Subsidies in Energy in Fiscal Year 2010” are as follows
            Nuclear received – $2,499M
            Wind received – $4,986M
            Solar received – $ 968M

            If one normalizes these subsidies to the amount of power generate ($M/billion kwh) by each method
            Nuclear – $ 3.10
            Wind – $ 52.48
            Solar – $968 (since it only generated 1 billion kwh)

          • John Greenberg :

            Lance:

            Using just one year’s “direct” subsidies provides an inadequate basis for a reasoned or reasonable comparison. Price-Anderson, for example, is not a “direct” subsidy, but without it, the nuclear industry would vanish. Its actual monetary value, however, is quite hard to calculate, since neither the risk nor the value of the damage from a major nuclear accident are well defined or well understood.

            Additionally, choosing the year 2010 skews the figures, since that was the year in which the main thrust of Obama’s stimulus funding took effect. The Obama bill provided more money for renewables than all of his predecessors COMBINED.

            The only reasonable comparison would need to include ALL subsidies and cover a 40-50 year period (since power plants last that long (and longer)).

  8. david black :

    Vermont has been getting in over its head and its head in the wrong place for a while over a lot of energy issues.

  9. Ed Carl :

    A lot of head in the sand comments here. So everyone against Entergy must think that it should be alright for a state to try and tax a company out of business? Is that what we are for now?

    How is VY a troublesome plant? It has one of the best records of all the nuclear plants in the U.S.. And please do away with comparing it to Fukushima. Unless we are expecting a massive tsunami to hit the plant, how exactly can we compare the two?

    What I see here are people who only listen to one side of the argument (fear based anti-nuke side) and turn a deaf ear to the other (logical side).

    • ALEX BARNHAM :

      Mr Edd, have you no idea how toxic the waste is that is being stored in Vernon? Have you no idea how much toxic waste is being vented unmointored into the atmosphere? Have you no idea the total cost of nuclear power? Have you no idea there is a better alternative? If you do any research at all, you would certainly see the problems of nuclear power. Even Al Einstein was shaking his head “no” when he ralized the dangers. Sir, you are definitely a desert lizard.

  10. Chris Williams :

    The fourth paragraph of this article says “When Shumlin and the state of Vermont sued Entergy to shut down Vermont Yankee, the state lost.“ The state did NOT sue Entergy. In fact, Entergy sued Vermont naming the Governor, Attorney General, and members of the Public Service Board as defendants. This significant error should be fixed. The Vermont legislature voted to deny the Public Service Board the opportunity to issue a new Certificate of Public Good for continued operation.

    • Andrew Stein :

      Thanks for pointing out this error. We’ve corrected the article.

    • ALEX BARNHAM :

      Entergy. Now that is the stupidest name for an energy company that I know of unless you are from Lousiana where they DO NOT speak English.

      • ALEX BARNHAM :

        Alex, c’mon now…their tongue is stuck to their false teeth.

  11. Paula Schramm :

    No one who is standing up for Entergy seems to remember that they signed a MOU that the State legislature would have a say in a license renewal. When the time came, it was ” Oh, did I say that….no, no, here’s what I really meant…”

    Add to that the outright lies and misrepresentations that they engaged in on events of great concern to Vermont officials, and you begin to get a picture of why many Vermonters don’t feel inclined to trust them or to do business with them. You can paint as rosy a picture of their excellent safety, their wonderful “clean” energy, those jobs that actually go to Vermonters ( NOT all their jobs, but I am sympathetic to those who support the plant because of this ) but when you look at their aged plant, their lack of concern about decommissioning expenses, their poor Fukushima design, their slimy public relations and level of openess…. Sorry, that dog don’t hunt !
    William Shultze says :
    “To those folks who believe that Vermont Yankee has been getting a cheap tax ride all along, hey, how much in tax are you getting from our Hydro Quebec buddies?!”
    I have to answer that our legislature indicated they didn’t want to renew their operation in Vermont, but they took us to court. Now they are no longer selling their power directly to us, we get our power elsewhere. But they still operate in our state, presenting the same potential dangers to us and our rivers and land, without our permission or agreement, so yes ! They should be compensating us through taxes. In my mind, the more, the better. They are in violation of their own promises to us !

  12. Denise Rumrill :

    Ok, Alex. This is why I usually don’t comment because people like you love to shout stupidity and doom-and-gloom from the rooftops. I’m not smug… and how do you know what I know and what I don’t. Oh yes, that’s right, you know all the answers. Geesh, are we back in grade school where he-who-shouts-the-loudest-and-makes-the-most-threats wins? I take the time to research and consider the options and alternatives. I’d love to be able to afford solar panels to supplement my energy use… but I can’t. You gonna buy some for me? Thought not… I do conserve… but I also am not willing to go back to candlelight and banging my clothes on rocks. I’d love to own a hybrid vehicle or some sort of non-gas motor vehicle, but I can’t afford that either… so I try the best I can to make every trip count. I happen to work full time as does my spouse,and wehave raised our family here… we were here before VT Yankee was here, when the plant was built and we’re all still here now. Renewable energy is important… it needs to be explored and made more affordable for the common, working-class individual. But where were you guys the last 40 years? Why isn’t solar more affordable? And solar is only a small dent in what is needed. Bottom line is I can’t afford to buy a renewable heat source to get me thru our New England winters… I can’t air dry my clothes as I have no area to do that in… and I do hand wash and air dry my dishes… but I don’t beat my clothes on a rock. You think you have all the answers, but unfortunately you just manage to yell louder than me. I think you’d best reposition your head as well and start considering the fact that nuclear is not sufficient in and of itself, and neither is solar… or wind power. They all have to work together. I’m not moving to a cave any time soon. Maybe you should consider it, tho. Why you can’t have a civil, normal discussion about the pros and cons of various energy sources without resorting to name calling and other childish antics only makes me more convinced that your opinion is as juvenile as your methods.

    • Lance Hagen :

      Dennis, very appropriate post. Alex’s mode of operation is to resort to ‘name calling’ and saying ‘bad thing about your mother’. The man is very ‘righteous’ and any position, differing from his, is not tolerated.

  13. Hattie Nestel :

    I invite all who oppose continued operations of Vermont Yankee, to join the Shut it Down Affinity group in doing autonomous actions at the plant shutting down the facility. Today eleven women were arrested on the premises of Vermont Yankee after having gone in the unlocked door of the Gov. Hunt House where Entergy holds trainings.
    Words alone will not shut it down, actions might-as shown by the Germans and the Japanese who are making some good headway into shutting their nukes down and keeping them shut down.

  14. Ralph Colin :

    For those endowed with a certain degree of common sense, it would seem fruitless to get sucked into debating the values of nuclear energy in general or of Vermont Yankee in particular with those who are bent on the practice of championing their position by employing tactics designed purely for the purpose of inducing fear. When rationality is abandoned, in the end it is an argument with people who have an emotional investment in an issue additionally framed by their political agenda.

    Reason is no longer applicable and one is not likely to change the minds of any of the anti-nuke battalions. They are absolutely convinced of their sole righteousness and are incapable of recognizing or even of tolerating any point of view, no matter how logical, which may conflict with their own fixed doctrine. When they or their adopted stance feel threatened, they resort to utilizing ad hominem attacks and sarcastic retorts. They aren’t going to change their minds and many of them are incapable of doing so under any circustances.

    So why waste your time? You’d be far better off spending time with your children or grandchildren, if you are fortunate enough to have them, teaching them the realities of life or just by playing baseball with them or by taking them to the beach. That would offer you a much greater degree of satisfaction than that of arguing with folks who have put their minds permanently on “hold.”

    • Paula Schramm :

      Ralph Colin – I can see why you would not want to waste your time arguing with those who have abandoned rationality, but how about responding to the rational points put forward in these comments ? I see quite a few ( and not just “mine” ! )

  15. Paula Schramm :

    I understand that my comment on taxing Entergy, “in my mind the more the better”, is an emotional response. I feel a great deal of frustration in that I believe Judge Murtha’s ruling in Entergy’s favor was an incorrect decision based on rather arbitrary choice of legislators’ comments that sets a very chilling precedent. I hope that Vermont’s appeal successfully establishes that.
    Here is a more “rational” assessment of these taxes, in the latest VTDigger article quoting Gov. Shumlin & others :

    “I firmly believe the tax is reasonable. It is less than the tax rate on wind projects, and it is comparable to the generating tax on nuclear plants in Connecticut. Nevertheless, Entergy clearly prefers to sue the state of Vermont, consistent with its history.”

    The nuclear generating tax of $0.0025 per kilowatt-hour (kWh) is the same as Connecticut’s and less than the Vermont tax on large wind projects of $0.003 per kWh.

  16. ALEX BARNHAM :

    To all who fail to see the humor in debate, please forgive me for an emotional response to the frustrating greed that permeates the high and mighty CEO’s of Entergy. We are all accustomed to unlimited resources and my only concern is that there will come a day when it will no longer be unlimited due to the lack of foresight of both the consumer and the producer. We cannot just blame the CEO’s. Every drop of fuel we burn and every watt of power we use is telling them “yes, we don’t care how you do it”.

  17. Wendy Raven :

    Vermont Yankee’s spent fuel pool
    Vermont Yankee has 1,507 fuel rod assemblies submerged in a spent fuel pool, which was originally designed to hold about 350. Spent fuel must be kept under water in order to prevent the uranium, which can remain hot for several years, from igniting.
    Shadis says the problem is that if the pool should “suffer any kind of trauma — an aircraft impact, an explosive from saboteur or an earthquake and pool loses cooling water, the fuel could heat up to the point that the metal in which the fuel is configured, the tubing that holds the fuel can then catch fire.”
    “The deal is, once it gets hot enough, rapid oxidation catches fire like grill. It is so oxygen thirsty at that point, that you can’t put water on it to put it out and the fire would disperse radioactive material into the environment,” Shadis said.
    Vermont Yankee’s spent fuel pool, located in a metal warehouse structure, has more than five full reactor cores worth of radioactive material, Shadis said. If there was an accident, he said the impact would be five times greater than a single reactor meltdown.
    “The NRC’s own studies show extraordinary casualties as result of a spent fuel pool accident,” Shadis said. “Even if a site were evacuated by 95 percent there would still be thousands of casualties because unlike the reactor there is no containment around the spent fuel pool,” Shadis said.
    The dry cask storage containers on the site are hundreds of times safer than the spent fuel pool, Shadis said.
    At this point, the site has 13 loaded casks, four of which were filled this year, according to Neil Sheehan, NRC public affairs officer for Region 1.
    Each cask, which can hold 72 assemblies, costs $1 million, according to Shadis.
    “There are economic considerations for the company,” Shadis said. “And those are the only considerations for the company. The company is convinced the waste is perfectly safe in spent fuel pool. We’re not convinced of that. In our view the only reason Vermont Yankee doesn’t move to put all the fuel into dry cask is because they are trying to go the cheapest way possible and they have no confidence that the Department of Energy is going to come pick it up right away.”
    Calls to Entergy Corp. officials for this story were not returned.
    Editor’s note: This story was updated at 6:33 a.m. Aug. 14, 2012.
    From a previous vtdigger article on the issue of spent fuel.

  18. Alex Barnham :

    I cannot believe how ill-informed the people of Vermont continue to be, especially those whose head is still stuck in the sandy beaches of the Vernon nuclear power plant. Have you not seen the evacuation signs? Are you willing and able to abandon your homes and kiss them good-bye? I’m just glad I don’t live there. If you don’t learn from the past, you will certainly pay a heavy price for your lack of vision. Hear no truth, speak no truth, see no truth. Make my day.

    “During a recent symposium in Tokyo, nuclear engineer Arnie Gundersen predicted the Fukushima disaster will lead to at least four million cancer deaths, some of which is preventable if government would provide human rights to health and safety in the form of information in best interest of the public.

    “The problem is there are 130 million people (sic) in Japan,” Gundersen said on a recent visit to Tokyo. “A third of them will die from cancer in the next 30 years.”

  19. Guy Page :

    I’m just back from a week away and find both the story and comments very interesting. As part of the overall discussion, it’s important to remember that VY is a large employer that makes a nearly essential product in a virtually emissions free manner. Beyond the taxes in question below, the plant pays the state of Vermont millions of dollars in taxes each year and is an outstanding corporate citizen, supporting local services and economic development in Windham County. Let’s also remember that the taxing entity – the Vermont Legislature – tried to shut down this plant only to be told it had overstepped its authority. Cheryl Hanna, a well-respected legal authority and no apologist for Vermont Yankee, makes a very good point in the story above: the State has once more left itself exposed by its own actions. Even Asst. AG Scott Kline suggested as much before the Senate Finance committee.

  20. Mike Curtis :

    An “essential product” ?? There is a SURPLUS of energy produced in New England right now.

    And since Entergy’s rates are HIGHER than other sources, Vermont utilities are not renewing power contracts with them.

    Entergy Nuclear’s product isn’t essential to Vermont or any other state.

  21. Jason Farrell :

    Where are all of the usually loud “state’s rights” supporters?

    To oversimplify the issue, as I see it:

    Can Entergy, through our federal court system, force the state of Vermont to abandon the notion that as a state, Vermont should have a say or control over the continued operation, and taxation, of a business that lies entirely within Vermont’s borders?

    It’s odd to read many of the usual state’s rights advocates defending the rights of this corporation, Entergy, over the rights of Vermont’s lawmakers.

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