Energy & Environment

Federal court tosses state’s suit over Vermont Yankee fund

Vermont Yankee

Vermont Yankee’s reactor. Photo by Mike Faher/VTDigger

VERNON — Less than six months after Vermont officials sued to stop a controversial use of Vermont Yankee’s decommissioning trust fund, a federal court has dismissed the complaint on procedural grounds.

The District of Columbia Circuit Court of Appeals ruled this week that Vermont’s legal complaint against the Nuclear Regulatory Commission is “incurably premature.” That’s because the state also has filed a similar but separate administrative challenge with the NRC on the same issue.

The appeals court, in a short order dated Monday, left the door open for the state to refile its complaint.

“Once the Nuclear Regulatory Commission has resolved (state officials’) pending request for commission review … they may file a petition for judicial review,” the court wrote.

At issue is an ongoing fight over Vermont Yankee’s decommissioning trust fund. The Vernon plant stopped producing power in December 2014 and is headed for decades of dormancy; the trust fund’s growth rate will help determine when actual decommissioning work starts.

Decommissioning the Vernon plant is expected to cost $1.24 billion. The trust fund at the end of December stood at $595.4 million, and plant owner Entergy reported spending $58 million from the fund during 2015.

The NRC last year approved Entergy’s request for a regulatory exemption to use the trust fund for long-term management of radioactive spent nuclear fuel at Vermont Yankee. It’s a big-ticket item — an expected $225 million draw from the fund — but the NRC believes there will be enough cash both for radiological decommissioning and fuel management.

Vermont officials disagree, contending that fuel management is not an appropriate trust fund expense. In August, the state filed a legal challenge in the Washington, D.C., appeals court against the NRC, arguing the federal agency “acted arbitrarily, abused its discretion and violated the Atomic Energy Act, the Administrative Procedure Act and the National Environmental Policy Act” when it granted Entergy’s request.

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Also listed as a plaintiff was Green Mountain Power Corp., which now owns Vermont Yankee Nuclear Power Corp., the plant’s former owner and another plaintiff in the suit. Vermont Yankee Nuclear Power Corp. collected the money from electricity ratepayers that now makes up the plant’s decommissioning trust fund, state officials pointed out.

“Further, Green Mountain Power Corp., and through it their Vermont ratepayers, have a 55 percent interest in all monies that remain in that fund following completion of decommissioning,” the lawsuit said. “Thus, every time the (NRC) allows an improper withdrawal from the decommissioning fund, it harms Vermont Yankee Nuclear Power Corp., Green Mountain Power Corp. and their Vermont ratepayers.”

The NRC responded with a motion to dismiss the legal action. The agency didn’t address the substance of the state’s complaint, instead noting that, in November, Vermont officials filed a separate petition asking that the NRC’s commissioners overturn the spent-fuel decision.

That created a technical problem, federal officials said, because the appeals court has jurisdiction only over final orders issued by the NRC. Once Vermont filed its November petition, the original order no longer was considered final.

“Vermont cannot seek judicial review of the NRC’s exemption decision before this court while at the same time seeking review and reversal of the identical decision in the administrative forum — the outcome of which could potentially obviate the need for judicial review,” federal officials wrote.

The appeals court this week agreed, dismissing Vermont’s suit “for lack of jurisdiction.”

Kyle Landis-Marinello, a Vermont assistant attorney general involved in the suit, recalled Tuesday that the state had a limited time frame last summer in which to file an initial challenge to the NRC’s decision on the spent fuel handling. “There was jurisdiction at the time we filed the suit,” he said.

Even after the state filed its November petition with the NRC, “we did take the position that there still was (court) jurisdiction,” Landis-Marinello said.

Though that argument ultimately didn’t fly with the appeals court, Landis-Marinello emphasized that the state “retained the right to bring this challenge at a later time.”

Officials also noted that refiling the suit won’t be necessary if NRC commissioners decide on their own to overturn Entergy’s trust fund exemption. “We’ll go through the NRC process and see where we are,” Public Service Commissioner Chris Recchia said.

Fuel disputes aside, there is another issue related to the now-dismissed lawsuit: Last fall, Entergy disclosed that Vermont had begun billing the company to recover legal fees incurred in the circuit court fight. At the time, the state warned Entergy its legal costs could amount to $250,000.

On Tuesday, Entergy Vermont Yankee spokesman Marty Cohn confirmed that the state’s bill for legal services on this case has been withdrawn.

That means the state, at this point, is planning to cover its own legal costs, including bills submitted by WilmerHale, a Boston law firm hired for the case. Documents show that legal costs associated with the now-dismissed suit were factored in when Public Service Department officials were preparing their fiscal year 2017 budget.

“We anticipate increased contract obligations of $274,182,” department officials wrote in a budget proposal released last month. “This is based on the addition of a contract with WilmerHale related to the Vermont Yankee legal fees exposure.”

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Asked about the legal fees Tuesday, Recchia confirmed he’s not seeking reimbursement at this time but said he is reserving the right to bill Entergy for such costs in the future. He also said the state’s investment in the trust fund lawsuit will not be wasted.

“We will make use of the information we have gleaned,” Recchia said.

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Mike Faher

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