Entergy Vermont Yankee sues state of Vermont

first_imgNorthstar Vermont Yankee,The other shoe has finally dropped. Entergy Corporation (NYSE: ETR) announced this morning that two of its subsidiaries, Entergy Nuclear Vermont Yankee, LLC (ENVY) and Entergy Nuclear Operations, Inc (ENOI), have filed a complaint in US District Court for the District of Vermont in Burlington seeking a judgment to prevent the state of Vermont from forcing the Vermont Yankee nuclear power plant to cease operation on March 21, 2012. Vermont Governor Peter Shumlin and Attorney General William Sorrell said that they expected the suit, have been preparing for the legal action and will use the full powers of the state to fight it.Today’s request for declaratory and injunctive relief follows the federal Nuclear Regulatory Commission’s March 21, 2011, renewal of Vermont Yankee’s operating license authorizing the plant’s operation through March 21, 2032. The NRC’s action came after what Entergy described as a thorough and exhaustive five-year safety and environmental review of the plant. (Entergy subsequently filed an injunction, April 22, to stop the state from closing the plant, which was what Vermont officials expected.)Shumlin has been a longtime critic of the plant, which he has repeatedly called ‘old and leaking.’ As Senate President Pro Tem he led a successful effort in the Legislature calling for the Vernon nuclear reactor to shut down once its license expires in 2012. That Senate vote followed closely on the heels of a radioactive tritium leak discovered in January 2010 and the subsequent finding that Entergy officials previously had given inaccurate testimony before the Vermont Public Service Board regarding underground pipes at the plant.Entergy has sought to extend the license another 20 years. It said a shorter extension was not feasible because of the capital investment the plant needed. Entergy announced two weeks ago that efforts to sell the plant had failed. It also has stated that to keep operating beyond the end of 2011 that it needed to make another fuel purchase by the end of June. It would not say what the cost of the uranium would be, but other sources have indicated it would be on the order of $50 million to keep the plant running another 18 months.Shumlin has indicated that Entergy is required to get legislative approval to operate beyond 2012. This lawsuit by Entergy disputes that assertion.‘We have made every reasonable effort to accommodate the state of Vermont and its officials while allowing the continued operation of Vermont Yankee ‘ an outcome that benefits all stakeholders, including Vermont consumers and the approximately 650 men and women who work at the plant,’ said Richard Smith, president of Entergy Wholesale Commodities. ‘Despite the fact that Vermont Yankee is important to the reliability of the New England electric transmission grid, emits virtually no greenhouse gases, and provides more than $100 million in annual economic benefits to the state of Vermont, it has been made clear that state officials are singularly focused on shutting down the plant. That has left us with no other choice but to seek relief in the court system.’ In 2006, the Vermont General Assembly passed a law that invalidated a key provision of a 2002 Memorandum of Understanding signed by ENVY, ENOI and Vermont officials when the company purchased Vermont Yankee. Under that provision of the MOU, Entergy’s two subsidiaries had agreed to seek a certificate of public good from the Vermont Public Service Board if it sought to operate the plant beyond March 21, 2012. This was in accordance with the process and standard for securing the state certificate in effect at that time. As the complaint alleges, Vermont repudiated the MOU, breaching that agreement and excusing the two Entergy subsidiaries’ obligation to further comply with that specific provision.‘The 2006 state law took the decision about Vermont Yankee’s future away from the Public Service Board, a quasi-judicial expert decision-maker, independent of legislative control,’ said Smith. ‘It instead placed Vermont Yankee’s fate in the hands of political decision-makers, namely the state General Assembly and governor who could deprive Entergy’s two subsidiaries of the opportunity to operate the Vermont Yankee plant beyond March 21, 2012, for unsupported or arbitrary reasons. This is not what we signed up for in 2002.’Despite Entergy’s disagreement with the 2006 state law, the company said it has made considerable effort to achieve state approvals to allow the continued operation of Vermont Yankee without resorting to litigation. Those actions included: â ¢ Filing a petition in 2008 with the VPSB for a certificate of public good to operate the plant beyond March 21, 2012;â ¢ Offering Vermont utilities a 20-year power purchase agreement at a fixed price of $49 per megawatt hour for the first contract year, followed by a market-adjusted pricing structure that ensured the utilities and their customers would benefit from low power market prices. This proposal was well below comparable offers from other electricity providers. It also included an inflation-adjusted price cap starting at $61 per megawatt hour that would have ensured the utilities and their customers were protected from high power market prices;â ¢ Offering to negotiate with the Vermont Department of Public Service the establishment of a ‘date certain’ for the commencement of decommissioning activities at Vermont Yankee earlier than the 60-year SAFSTOR period permitted by NRC regulations; andâ ¢ Exploring the potential sale of Vermont Yankee. Despite interest from some potential buyers, based largely on the superior operational record of the plant, Entergy was unable to reach commercial terms with any party due to the political uncertainty in Vermont; more specifically, due to the stated intent of Vermont officials to shut down the plant. In a meeting with Entergy representatives on March 30, 2011, the governor reiterated his firm opposition to the operation of Vermont Yankee after March 21, 2012. The lawsuit filed today is based in part on the following legal principles:â ¢ Atomic Energy Act Preemption. Under the Supremacy Clause of the U.S Constitution, the U.S. Supreme Court held in 1983 in a case involving Pacific Gas & Electric that a state has no authority over (1) nuclear power plant licensing and News Release: Entergy Files Complaint in U.S. District Court operations or (2) the radiological safety of a nuclear power plant. In violation of these legal principles, Vermont has asserted that it can shut down a federally licensed and operating nuclear power plant, and that it can regulate the plant based upon Vermont’s safety concerns.â ¢ Federal Power Act Preemption and the Commerce Clause of the U.S. Constitution. Vermont is prohibited from conditioning post-March 2012 operation of the Vermont Yankee Station on the plant’s agreement to provide power to Vermont utilities at preferential wholesale rates. The Federal Power Act preempts any state interference with the Federal Energy Regulatory Commission’s exclusive regulation of rates in the wholesale power market. The Commerce Clause of the U.S. Constitution bars a state from discriminatory regulation of private markets that favors in-state over out-of-state residents. ‘Litigation is by far the least preferred approach,’ said Smith. ‘But it is clear our disagreement with the state of Vermont on the scope of its authority over Vermont Yankee cannot be resolved between the two parties. Putting this dispute before a federal judge is the appropriate and responsible way to resolve this disagreement. Our filing today does just that.’ Governor Shumlin, standing with Vermont Attorney General William Sorrell, held a press conference this afternoon reiterating his position that Entergy agreed to the Vermont law, signed by Governor Douglas in 2006, that Entergy is required to receive legislative approval to continue operating beyond March 2011. (See Shumlin’s official statement below.)”We’re prepared to defend Vermont and uphold the laws of the state of Vermont,” Shumlin said.Sorrell said the state has been expecting a lawsuit for months and expected Entergy to take the state to court even sooner. Sorrell anticipates the lawsuit could extend for quite some time, even if Vermont would win its case in US District Court by this fall. There could be an appeal.  He said the state would fight any effort to extend the operation of the plant past March 2012. He said Entergy might use the courts to extend the plant’s operation for some time. He also said that he would expect an injunction request coming from Entergy, perhaps within a few days.Sorrell said in its suit filed today that Entergy “threw everythinig in here but the kitchen sink,” including saying that the Vermont law is in opposition to the US Constitution. Sorrell said that the separate criminial investigation over Entergy’s previous testimony to the PSB is ongoing and being undertaken by a separate staff within the AG’s office.The Vermont congressional delegation, Senators Leahy and Sanders and Representative Welch, issued the following statement concerning Entergy’s suit:  ‘It appears that Entergy has developed a bad case of corporate amnesia in refusing to honor an agreement it signed with the state in 2002. Entergy agreed to waive any claim that federal law preempts the jurisdiction of Vermont. The company also agreed to comply with the terms of the agreement and Vermont laws. The Vermont laws are clear; Entergy must be approved by both the state Legislature and the Vermont Public Service Board to receive a certificate of public good to continue to operate the Vermont Yankee nuclear power plant beyond March of 2012. ‘Now, reversing course, Entergy is seeking in federal litigation to avoid complying with Vermont law and the agreement. We look forward to the court system resolving this case in Vermont’s favor.’ About EntergyEntergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy has annual revenues of more than $11 billion and approximately 15,000 employees.  VEC Board to review Entergy Vermont Yankee proposal, not final yet … Apr 1, 2011 … Vermont Electric Cooperative (VEC) officials responded to a press release issued by Entergy Corporation on March 30, 2011. … Governor Shumlin Interview: Vermont Yankee, taxes, education … Later that same afternoon Entergy and the Vermont Electric Cooperative, the state’s third …Governor Shumlin said, “I don’t think we can be bought.” … Entergy, Vermont Electric Cooperative complete negotiations on … Mar 30, 2011 … Entergy Corporation (NYSE: ETR) today announced Entergy Nuclear Vermont Yankee, LLC has completed negotiations on a 20-year agreement to … Statement by Governor Peter Shumlin on Entergy Louisiana lawsuit “Today Entergy sued the State of Vermont in U.S. District Court in Vermont.  Entergy’s lawsuit claims that Vermont should have no role in approving Vermont Yankee’s continued operation after March 2012. “As Governor, I have taken an oath to uphold and protect the laws of our state and I want to reassure Vermonters that I will keep that promise.  Fortunately, we are ready for this event.  The Attorney General’s Office and other state agencies have been working hard to prepare a defense and protect our state’s laws. “In 1972, Vermont Yankee began to operate after our Legislature voted to allow a nuclear plant to be built in our state under a 40-year license, until 2012.  In 2006, mindful of its proper role in the process, the Legislature passed a law, signed by my predecessor Governor James Douglas, that clearly outlined the requirements for the continued operation of a nuclear power plant in our state. Entergy’s lobbyists, executives and lawyers all participated in that process ‘ indeed, Entergy expressed its support of that law at the time. “Entergy is now attempting to rewrite history, breaking its own promises and its own support of Vermont law.  Instead of following Vermont law, Entergy seeks to subject the taxpayers of Vermont to an expensive legal proceeding.  I am deeply concerned about this action because it flies in the face of commitments made by Entergy.  When it purchased Vermont Yankee, Entergy clearly agreed that it must obtain a new state license to operate beyond March 2012, and that it would not attempt to claim preemption regarding the state’s licensing decision.  The Public Service Board relied upon that promise when it allowed Entergy to purchase the plant.  Later, Entergy supported the law passed by the legislature and signed by my predecessor giving the legislature a role in the state licensing process.”Yet now, as March 2012 approaches and the state license is not in hand, we see Entergy’s executives breaking their agreement and their word once again.  Vermont has a proper role in granting or denying state approval for Vermont Yankee.  We are confident that the Court will recognize that role and we are ready to defend Vermont in this lawsuit.” Vermont Senate votes to close Yankee | Vermont Business Magazine Feb 24, 2010 … Entergy Vermont Yankee is seeking a 20-year extension. The Senate vote comes on the heels of the latest bad news for the plant. … Entergy: No intent to mislead found, but some communication … Feb 24, 2010 … Entergy Corporation today announced it has provided to Vermont Attorney General William Sorrell the results of its independent internal … RELATED STORIES: Vermont Yankee reports trace amount of tritium in monitoring well … Fri Jan 8 2010. Vermont Yankee released a statement yesterday reporting that, for the first time, a small amount of tritium, a radioactive isotope, …last_img

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