While the state of Vermont’s legal team prepares to appeal a case lost to Entergy Corp. in federal court last year, the Louisiana-based nuclear company is pursuing its own federal appeal in another suit against the state.
In September of 2012, Entergy, which operates the Vermont Yankee Nuclear plant, sued the state for imposing a tax increase on electricity generation.
The tax hike approved during the 2012 legislative session would raise roughly $12.5 million annually for the state, instead of the roughly $5 million previously raised by the tax. In part, the increase was meant to make up for agreements that funneled roughly $6 million into the state’s Clean Energy Development Fund every year.
Entergy sued the state on four counts of violating the constitution. But, at the end of October, federal Judge Christina Reiss dismissed the case under the Tax Injunction Act, which prevents federal courts from intervening with the collection of state taxes.
Entergy argued that the tax was a levy, but Reiss ruled that the generating tax was indeed a “tax.”
Since that decision, Entergy filed an appeal in the U.S. Court of Appeals for the Second Circuit, arguing that the so-called tax is not a tax. Entergy argues that the tax is meant to retrieve payments “made under expired contracts to fund the state’s alternative energy agenda” and is “part of a continuing plan to shut down a politically unpopular nuclear plant,” as court documents show.
Entergy also argues that Vermont state courts do not present an adequate platform to argue this case based on constitutional claims.
