State defends authority over Vermont Yankee

Entergy spokesman Jim Sinclair talks to reporters outside of the U.S. District Court in Burlington on Tuesday, June 4, 2013. Photo by Andrew Stein/VTDigger

Entergy spokesman Jim Sinclair talks to reporters outside of the U.S. District Court in Burlington on Tuesday. Photo by Andrew Stein/VTDigger

 

Assistant Attorney General Bridget Asay and her legal team asserted the state of Vermont’s authority over the Vermont Yankee nuclear power plant on Tuesday in U.S. District Court.

Entergy Corp., which owns the plant, filed a lawsuit against the state in April because it wants the Vermont Public Service board to issue a permit by June 11 for the construction of a backup diesel generator or it wants the federal government to intervene.

Entergy contended that the state indicated it would not issue a permit in a timely fashion. Since Entergy must meet federal guidelines, it argues that if the state does not issue the permit by June 11, the state’s power is federally preempted.

Asay argued in front of federal Judge Christina Reiss that Entergy’s contention is based on speculation, as the hearing was June 4 and the state could very well issue the permit by the end of the day on June 10. Furthermore, she added, the quasi-judicial board’s hearing officer recommended that the board provide a permit, known as a certificate of public good (CPG), for the facility, and that Entergy’s proposed schedule is arbitrary.

“The likely outcome is the board will approve the CPG for the generator and this case would be moot,” Asay said in court, adding that the state’s authority to issue such a permit is not preempted under federal law, as Entergy’s attorneys have stated.

“The approval the state will give does not mean it does not have authority,” she said.

The nuclear plant must have a backup source of power to comply with federal regulations, and its contract with Transcanada for that power is set to expire on Sept. 1. To construct the generator by September, Entergy representatives say it needs to begin by June 11. When Entergy filed the lawsuit, the hearing officer, Lars Bang-Jensen, had not yet issued a recommendation. Bang-Jensen also questioned whether the plant should be given the permit, considering that the plant is not in compliance with existing orders.

Entergy spokesman Jim Sinclair said that in light of such ambiguity, his company was forced to take legal action.

“Seven months ago, in September of last year, we filed an application, and it’s taken this long to get this far,” he said. “With the uncertainty of when and if the Public Service Board will rule, we were put in the very difficult position of having to explore this as an alternative.”

Cheryl Hanna, a constitutional law professor at Vermont Law School, outlined the three different directions this case could move in, and they all depend on the Public Service Board.

Vermont Law School professor Cheryl Hanna in March. Photo by Nat Rudarakanchana

Vermont Law School professor Cheryl Hanna in March. Photo by Nat Rudarakanchana

The board could grant the diesel generator a certificate of public good without any contingencies on past or pending orders and permits, which is what Bang-Jensen proposed to the board. This decision would drop the federal case.

“They could grant the certificate of public good with the condition that Entergy is in compliance with all of its other certificates of public good and that, of course, would create conflict within the parties about what that meant,” Hanna said outside the courtroom.

The third option for the board is that it could deny Entergy’s application for the permit, which would raise the question of federal preemption.

Sanford Weisburst — one of Entergy’s attorneys from the New York firm Quinn, Emanuel, Urquhart and Sullivan, LLP — pointed to federal preemption because the back-up generator serves a safety purpose, and safety issues fall under the purview of the Nuclear Regulatory Commission via the Congressional Atomic Energy Act.

“It’s in the heartland of preemption because it’s safety motivated,” he told Judge Reiss.

Aside from opening comments, the morning session on Tuesday was consumed by the state cross-examining George Thomas, Vermont Yankee’s senior project manager, about how various construction project schedules have shifted. Hanna said this was not the main issue at hand.

“The factual question in this case, about whether Entergy needs 82 days or 63 days, is really minor and a lot of legal wrangling to really very little good,” she said. “The bigger legal question in this case is whether or not the state of Vermont could withhold a certificate of public good because it’s federally preempted from doing so and that really comes down to whether or not the federal regulation at issue here is fundamentally a safety issue.”

Hanna expects that Reiss will wait for the Public Service Board’s decision before making one of her own.

On Wednesday, the Public Service Board is taking a single oral argument on the permit application from the anti-nuclear New England Coalition, which opposes the permit. The board is then expected to issue a decision soon thereafter.

In addition to this federal suit, Entergy and the state of Vermont are currently litigating in federal appeals court over the Legislature’s authority to shut the plant down, over a generation tax passed last legislative session, in the Vermont Supreme Court, and in front of the Public Service Board to provide a new certificate of public good for the plant to operate for another 20 years.

The case in front of the federal court of appeals bears far more weight on the future of the plant’s ability to operate and a state’s power over a nuclear facility, Hanna pointed out.

“The fundamental question is what is a relationship between a state and a federally regulated, currently operating nuclear facility, and there is no clear answer to that question,” she said.

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Comments

  1. david klein :

    “I stand for judgement. Answer; shall I have it?”-Shylock, The Merchant of Venice, Act IV, Scene 1

  2. Howard Shaffer :

    In the preemption case now at the Federal Appeals court, the opponents of Vermont Yankee have often raised the California case as precedent. In that case the state refused to allow NEW nuclear power plants on economic grounds-the future cost of used fuel disposal when no national plan existed.

    The opponents leave out the fact that California did not touch ALREADY LICENSED plants.

    Professor Hanna is correct, that the issue of state authority over operating plants is not clear. It will likely be decided for the nation by the Vermont Yankee case.

  3. John Greenberg :

    The Vermont press has done readers a disservice by failing to provide adequate background to assess the issues in this case. In particular, the following points have been ignored:

    1) Readers should be aware of the timelines involved here. Rather than present them myself, I quote from “PREFILED REBUTTAL TESTIMONY OF GEORGE THOMAS,” dated March 15, 2013 and submitted as part of Docket 7862 (Entergy’s request for a CPG for continuing operations) concerning the timeline leading up to the filing of the diesel generator case:

    “A11. On or about December 21, 2011, ISO-NE first notified Entergy VY that the Vernon Hydro Station would no longer be available under the blackstart program after September 1, 2013. Because having a station blackout power source is required to meet NRC regulation 10 CFR § 50.63, Entergy VY immediately identified various options to address the need for an alternate source of AC backup power. These options included intervening in the relevant ISO-NE/FERC tariff proceeding, (2) developing a contract with the owner/operator of the Vernon Hydro Station to provide station blackout power, (3) installing an off-site diesel generator or (4) installing an on-site diesel generator. Entergy VY initially pursued the options that would not require any additional work on-site, and thus would not have required any approval by the Board. Entergy VY diligently pursued these options, but by April 24, 2012, it became clear that the only viable option was an on-site generator. Entergy VY then evaluated possible on-site locations, performed vendor selection and developed a preliminary design of an on-site diesel [p. 10] generator. Once that was completed, we developed a cost estimate and began the internal process of obtaining management approval for the funding for the project. It should be noted that the final selection of the location to place the generator was complicated by, among other things, the limited footprint of the VY Station and the pre-existing location of certain plant equipment.

    “Once these pre-conditions were met, Entergy VY obtained internal approval for the project in mid-July of 2012. Entergy VY promptly submitted its required 45-day notice to the Town of Vernon and the Windham Regional Commission on July 24, 2012, with copies to both the Department and the Board notifying them of the proposed project. While the 45-day notice was pending, Entergy VY contacted the Department on or about August 16, 2012, to discuss the proposal. At the Department’s request, a meeting was scheduled for August 24, 2012, so that both the Commissioner and Deputy Commissioner could attend.

    “As soon as the 45-day notice period passed (without any recommendations as contemplated in Section 248(f) by the Town of Vernon or the Windham Regional 17 Commission), Entergy VY filed its petition with the Board on September 7, 2012.

    “Q12. At the time Entergy VY approached the Department with respect to the station blackout diesel generator proposal, how much time was there for the Department to consider and react to the proposal? [p. 11]

    “A12. Entergy VY approached the Department on August 16, 2012. At that time, based on discussions with TransCanada, Entergy VY understood that TransCanada did not intend to remove the Vernon Hydro Station from the blackstart program until its contract with ISO-NE terminated on September 1, 2013. However, TransCanada was unwilling formally to commit to that date in writing, and it was understood that TransCanada might remove the Vernon Hydro Station from the blackstart program as early as January 1, 2013. At the August 2012 meeting, Entergy VY explained this situation to the Department, and further explained that it might be necessary for an expedited review of the station blackout generator proposal, and a start of construction as early as October 1, 2012, to account for TransCanada’s unwillingness to commit in writing to the September 2013 date. In fact, subsequent to that meeting, the Department itself was able to secure a written commitment from TransCanada not to remove the Vernon Hydro Station from the blackstart program until September 1, 2013.

    “On this point, it is important to note that Entergy VY’s petition is under 30 V.S.A. 15 § 248(j), a provision specifically designed to cover projects of limited size and scope, which do not raise significant issues, and which are typically approved without public or evidentiary hearings. In my experience, such petitions are usually resolved within a few months, and it was with this expectation that we approached the Department in August of 2012. [pp. 9-12]”

    Readers will note that Entergy took more than 9 months to put this case before the Public Service Board after being notified that the Vernon tie might no longer comply with an NRC rule issued in the 1980s, but the company is now complaining that the PSB is not acting quickly enough. It is also worth noting that preemption claims concerning the Board’s issuance of a CPG in this case were raised only with this lawsuit. In other words, the request for a CPG was filed in September of 2012 and the preemption claim was raised only in late April of 2013.

    Finally, it is worth noting that legal intervenors have rights in Board cases, some of which account for some of the “delay,” and that at least one Board member, David Coen, wrote: “In my view, under these circumstances, the Board should not consider Entergy VY’s request to construct additional facilities until either the Company has come back into compliance with Board Orders or the Board has resolved Docket 7862 and determined that issuance of a new CPG promotes the general good of the state.” (Dissent on “ORDER OPENING INVESTIGATION AND NOTICE OF PREHEARING CONFERENCE,” December 27, 2012.

    2) The testimony just quoted also makes clear a point relevant to the core legal issue that commentators have been discussing: namely, the Board is not deciding whether or not to reject an option MANDATED by federal safety regulations, but rather whether to accept the option ENTERGY decided was its best choice for meeting the federal regulations.

    This is a crucial point, so let me state it differently: the NRC has NOT ordered VY to install the emergency diesel generator in question, and indeed, beyond its longstanding generic regulation, there is no evidence to suggest that the NRC has specifically ordered VY to do ANYTHING about this issue. Instead, confronted with the need for backup power (previously supplied by the Vernon tie and NOT a diesel generator), Entergy has decided that its best option is installing an onsite emergency diesel generator, while explicitly noting that OTHER OPTIONS were available and would have fully complied with the generic NRC regulation.

    In particular, this means that in the unlikely event that the Board were to deny Entergy a CPG for its emergency diesel generator in this instance, it would NOT ipso facto be denying Entergy the option to comply with federal regulation, since other options would, by Entergy’s own admission, still be available.

    It also means that Entergy’s request is clearly premature given that, as the State’s lawyer pointed out, its request for a permit has neither been granted nor denied. It is a longstanding policy of American courts NOT to decide cases until they are fully “ripe,” in order to avoid making decisions about hypothetical situations which may never arise in actuality. In this instance, Cheryl Hanna points to three possibilities no one of which is compatible with the other 2. If the court were to decide this case on this record, it would be deciding on at least 2 completely hypothetical possibilities.

    3) Vermont’s CPG regulations have nothing whatsoever to do with Entergy, nuclear power, or Vermont Yankee in particular, and have been in existence for decades. They apply to ANY generator which sells power offsite. Thus, unlike the case decided by Judge Murtha where the State of Vermont was attempting to regulate Vermont Yankee in particular, here the issue is whether or not there is a conflict between the State’s generic regulation of electricity generation and the NRC’s specific safety regulations pertaining to nuclear power. Given, as noted above, that Entergy would have options of complying with NRC safety regulations without directly confronting longstanding Vermont regulations, the preemption issue seems far less clearly raised than in the previous case.

    If a court were to decide that Vermont could not hold Entergy accountable to its own regulation – clearly not related in ANY way to nuclear safety issues – then it would be effectively saying that federal preemption extends to ALL aspects of operating nuclear power plants, and NOT ONLY to the preempted “field” of nuclear health and safety. Suffice it to say that I have never seen anyone show anything in the Atomic Energy Act which would support such a finding, and that all of the case law (with the possible exception of Judge Murtha’s decision!) points in the opposite direction. It would also be saying that the Atomic Energy Act preemptively requires states to allow EVERY option which a nuclear operator might choose, which is logically quite a different decision from saying that the AEA requires states to allow SOME options if the issue is in any way safety related.

    4) Finally, one more word about timing. This is not the first time that Entergy has made claims about the amount of time it requires to comply with this or that. As noted in the timeline above, Entergy made claims, which we now know were spurious, about when the Vernon tie would no longer be available in this very docket. Previously, in asking Judge Murtha for an injunction in the preemption case decided last year, Entergy made a series of claims about the timelines required to order fuel for its refueling outage, which slipped over the course of briefs, oral arguments, etc. by a matter of months. There, early July magically morphed over the course of time into September. Since the timing of the PSB decision is crucial to this case, Entergy’s dismal track record in making these timeline statements another pretty important detail.

  4. Jon Wharf :

    Mr Greenberg is wrong on a number of points and misguided on others. He probably needs to chose his battles – the PSB is firmly in the wrong on this one.

    From December 21 2011 to July 24 2012 is about seven months, which includes time for negotiation with Transcanada and evaluation of other blackstart options. The July date indicates the start of the CPG application process. The attempt to suggest that Entergy was unusually dilatory fails. [and, JG, Dec 21 2011 to Sep 7 2012 is still LESS than nine months, and LESS than the time from then to now].

    The PSB’s unprofessional sulk on Entergy obtaining judicial variance on other orders has no legal standing.

    It is clearly not a minor matter that the PSB responds in a timely way to requests that have a nuclear safety implication. It seems ludicrous to suggest that other options means that the PSB can take more time than necessary to make its response. The presence of other options means the PSB should actually respond with higher priority to allow those other options to be taken up, if necessary.

    The judge took evidence, which means that arguing that the case is premature is pointless – clearly it is not.

    The independence of the CPG can be maintained somewhat if the PSB recognizes their partial, rather than total, authority. If there was a problem with environmental impacts that could probably be resolved – but only IF the PSB works in a timely fashion.

    Entergy made no spurious claims about timeline, but communicated an uncertain situation and a best-case resolution. Good planning requires margin, and if events transpire so that the margin is not needed, that does not indicate any mendacity on the part of the planner. This applies strongly to the diesel installation.

    • Coleman Dunnar :

      Another point Mr. Greenberg ignores is whichever of the 4 options Entergy had chosen it would have required coming before the Board for approval whether it be hardware on site or off or a contract for cold start power.
      Regarding Mr. Greenberg’s comment “Given, as noted above, that Entergy would have options of complying with NRC safety regulations without directly confronting longstanding Vermont regulations, the preemption issue seems far less clearly raised than in the previous case.” IMHO this far less ambiguous than the previous case and there is a very bright line separating safety from any other issue regarding VY.

      • John Greenberg :

        Coleman Dunnar claims that I “ignored” the point that “whichever of the 4 options Entergy had chosen it would have required coming before the Board for approval.” First, why would Board approval be needed “intervening in the relevant ISO-NE/FERC tariff proceeding,” which is the first choice mentioned by Entergy’s witness? Or for that matter with option 2: “developing a contract with the owner/operator of the Vernon Hydro Station to provide station blackout power.” As far as I can see – though I’m not well versed in this kind of law — neither would require Board approval.

        But that said, I’m not sure what Mr. Dunnar is trying to get at. The point I thought I made was that the emergency diesel generator is NOT the only way to comply with the NRC regulations. Accordingly, I implied, there is a reasonable basis for Vermont regulators to examine the CHOICE Entergy made to determine whether or not it is the most suitable choice for Vermont. I fail to see how that constitutes ignoring the issue.

        As to Mr. Dunnar’s second point, I believe he’s addressing a point I didn’t make. I did not address – because the issue has not arisen – what would happen if the Board were to deny the CPG for the diesel generator. Indeed, I think the likelihood of that happening is vanishingly small.

        The issue as it stands now is whether the Board has the right to CONSIDER the question in view of all the points raised previously, and whether, as Entergy and Mr. Whorf would have it, there’s been unnecessary delay in that consideration. Since it’s clear to me that the Board CAN weigh the issue without entering into territory preempted by the Atomic Energy Act, I stand by my previous statements. And I’ve seen no evidence of unnecessary delay though as noted in my response to Mr. Whorf, I’m open to seeing it presented with specificity.

    • John Greenberg :

      Jon Whorf correctly notes that I misspoke when I wrote that “Entergy took more than 9 months to put this case before the Public Service Board.” From December 21 to September 7, when the petition was submitted is only 8 ½ months.

      That said, I take issue with all of the remaining points he raises.

      I did not say or imply that Entergy was “unusually dilatory.” I did suggest that since Entergy is now in a tearing hurry, it is worth noting that its own decisions were responsible for some of the lost time. These decisions MAY have been reasonable; I see no point in debating that point. But there WERE decisions and making them allowed time to pass.

      I have no idea, other than rhetorical excess, what Mr. Whorf means when he refers to the Board’s “unprofessional sulk on Entergy obtaining judicial variance on other orders.” If this refers to the Murtha decision, I fail to see ANY relevance to this case. Moreover, the Board has clearly bent over backwards to defer to Judge Murtha, rather than “sulk” about his decision.

      More relevant here is that issue that I quoted above, raised by David Coen. Entergy demanded that the Board agree with its suggestion that any failure to comply with previous orders was outside of Entergy’s control, which forced the Board to issue a ruling on the points Entergy raised. On most of the points, the Board unanimously disagreed with Entergy, stating that Entergy is NOT in compliance with previous orders and therefore is not operating in compliance with Vermont law. The Board responded to Entergy’s request (and to the comments of other parties) with its usual closely reasoned, highly professional judgment, and Entergy has now appealed its decision to the Supreme Court of Vermont.

      There’s nothing that merits the description “unprofessional” or “sulk” about Mr. Coen’s calling attention to that point and questioning whether the Board should issue a new CPG to a company which fails to comply with its old ones.

      Similarly, Mr. Whorf again puts words in my mouth when he implies that I suggested that “the PSB can take more time than necessary to make its response.” No one, certainly not I, has made that suggestion. Indeed, saying this puts the cart well before the horse: the real questions are how much time is “necessary,” and whether the Board has, in this instance, exceeded those limits. I’m not aware of any evidence that there has been ANY delay on the Board’s part, but I’m certainly open to Mr. Whorf making the case that there have been delays and that they were unnecessary. Until he does so, however, this is just a straw argument.

      Mr. Whorf then turns to “the independence of the CPG,” whatever that means, and again suggest that this can be “maintained somewhat if the PSB recognizes their partial, rather than total, authority.” The PSB has repeatedly made it clear during the decades that I’ve followed it that it is well aware that its authority is “partial,” and specifically limited by issues of federal preemption. If Whorf’s allegation is that this is not the case, then he needs to present some evidence for it. The Board has not always agreed with Entergy’s interpretation of the limits of federal preemption, but that is NOT the equivalent of failing to recognize the issue. It’s worth noting that Entergy’s posture on this issue goes well beyond the findings of the courts, while the Board’s position is well-grounded in case law.

      Mr. Whorf is simply mistaken when he writes: ‘Entergy made no spurious claims about timeline, but communicated an uncertain situation and a best-case resolution.” In its September 7 submission of prefiled testimony, Robert Wancyzk stated that “The Project is scheduled to be completed no later than January 1, 2013 because TransCanada MAY remove the Vernon Hydro Station from Black Start service as early as January 1, 2013. In order for Entergy VY to have reasonable confidence that construction will be complete by January 1, 2013, it is necessary for construction to begin in mid-October [2012]. Page 5, emphasis added. Both of these dates proved to be incorrect. The word spurious does not imply mendacity, though clearly Entergy is no paragon in that department.

      Finally, let me take this opportunity to correct my own misstatement above. I said that preemption claims were made only when the lawsuit was filed, but that’s not the case. They were, in fact, raised in the initial filing. I apologize for the error.

  5. Willem Post :

    The above back and forth omits to mention Vermont Yankee has made a significant 40- year contribution to minimize the factors that may cause global warming and climate change and has provided low- cost, near CO2- free energy at the same time.

    Instead of faulting VY, we should be lauding it for that.

    VY needs emergency power. It is a public good that VY be safer WITH emergency power.

    It is beyond rational to even discuss all the details in such a lawyeresque, hair-splitting detail.

    Issue the permit to put in the diesels and be done with it, instead of wasting more expensive manhours wrangling and mangling, trying to make it look like there is an issue.

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