Vermont Yankee wins court decision to stay open

Entergy (NYSE: ETR) won a crucial legal fight in federal district court in Vermont Jan. 19 over the future of its 600-MW Vermont Yankee nuclear plant. 

In a 100-page decision, U.S. District Court Judge J. Garvan Murtha ruled against the state’s effort to shutter Vermont Yankee in March when the boiling water reactor’s existing nuclear license runs out.

 The state Legislature has effectively kept the plant from receiving a new certificate of public good although the U.S. Nuclear Regulatory Commission has approved the plant for a 20-year license renewal that could allow it to run until early 2032.

The court had held a three-day trial in September 2011.

“This Court’s decision is based solely upon the relevant admissible facts and the governing law in this case, and it does not purport to resolve or pass judgment on the debate regarding the advantages or disadvantages of nuclear power generation, or its location in this state,” Murtha wrote.

Originally owned by a joint venture of several New England utilities, Entergy signed a memorandum of understanding to buy the plant in 2002. Vermont Yankee has traditionally generated one-third of the electricity used in Vermont.

Since buying the plant, Entergy has constructed a dry cask storage facility for spent fuel. The storage site has space to hold the plant’s spent fuel through 2032, according to information submitted by Entergy.

During the recent litigation, Entergy successfully argued that Vermont’s efforts to shut down the plant encroached on NRC’s turf. That’s because the authority to oversee nuclear plant safety is legally NRC’s jurisdiction alone.

Entergy also argued that the state’s qualms about Vermont Yankee’s power contracts infringed on interstate commerce, which is also a federal issue.

“Here, there is evidence Vermont Yankee would be required to sell a portion of its output to Vermont utilities at below-market rates, rates that would not otherwise be available to the utilities if they were negotiating on the same footing as customers in other states, or the plant must suffer the consequences of closure,” the court said. Such a policy, however, “runs afoul of the commerce clause,” the judge said.

The judge issued a permanent injunction against the state preventing the state from shutting down the nuclear plant in March.

The decision drew criticism from Vermont’s governor and a U.S. senator who have been vocal critics of Entergy’s operation of Vermont Yankee.

“The court Thursday made a decision that is, in my view, wrong on the merits and ripe for appeal. I believe the law is very clear, and that states have the right to reject nuclear power for economic and other non-safety reasons,” said Sen. Bernie Sanders, I-Vermont.

Gov. Peter Shumlin said Entergy had not been a “trustworthy partner” for the state. “I continue to believe that it is in Vermont’s best interest to retire the plant. I will await the Attorney General’s review of the decision to comment further on whether the state will appeal.”

Case 1:11-cv-00099-jgm; Entergy versus Gov. Peter Shumlin and others.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.