Politically Thinking: Even court win might not save V.Y.
As the March 2012 expiration date of Vermont Yankee’s certificate of public good from the state of Vermont comes ever closer, the future of the nuclear power plant will be determined by legal, regulatory and economic issues that will play out in the months ahead.
Yankee’s owner, Entergy, has filed a federal lawsuit challenging the requirement that the plant needs a permit from Vermont to keep operating after March 2012. Entergy argues that the federal government has exclusive jurisdiction over the operation of nuclear power plants, and that the Nuclear Regulatory Commission’s decision to extend Yankee’s operating license for 20 years is all the authority the plant needs to continue running, regardless of decisions by the state.
The legal action is in its early stages. Whichever side loses in federal district court in Brattleboro will appeal to the regional federal appeals court in New York. The loser in New York will appeal to the U.S. Supreme Court. Because of the important issues regarding federal and state authority raised by this lawsuit, the Supreme Court may very well accept this case for full argument.
A decision from the Supreme Court is unlikely before 2013, so Entergy wants a federal court order keeping Yankee open until the legal proceedings are completed. Earlier this week, the district court judge refused to grant this order.
If Entergy can get to the Supreme Court, it may win its case there. The high court has frequently ruled in favor of corporate litigants in recent years. Also, Entergy has hired one of the nation’s leading appellate lawyers to argue on its behalf. Kathleen Sullivan, formerly dean of Stanford Law School, is now in private practice in New York. She specializes in cases involving conflicts between federal and state powers. Sullivan has won several federal pre-emption cases in the Supreme Court.
Even if Entergy wins in the Supreme Court, however, continued operation of Yankee may not be economically viable. So far, no Vermont utility has contracted with Yankee to purchase power beyond 2012. Yankee offered a contract to the Vermont Electric Cooperative, but the board of that utility rejected the proposal. The cost structure of the Yankee plant does not allow Entergy to sell power at a price that is competitive with other producers.
The planned purchase of CVPS by Green Mountain Power will not help Entergy. GMP is owned by Gaz Metro of Montreal. Gaz Metro, in turn, is principally owned by the retirement fund for public employees in Quebec. This fund has close relationships with Hydro-Quebec, which sees the GMP-CVPS deal as a way of selling more power to Vermont and other New England states. Hydro-Quebec will make sure that its power is always less expensive than Entergy’s.
Meanwhile, a Nuclear Regulatory Commission task force on the implications of the earthquake and tsunami in Japan for U.S. nuclear plants submitted its report last week. One of the task force’s recommendations was that operators of General Electric boiling water reactors similar to those at Japan’s Fukushima-Daiichi plant — the reactor model used at Vermont Yankee — make significant upgrades to their plants in terms of power supply reliability, protection against flooding, and reinforcement of the containment structure. Experts have estimated that these recommendations, if adopted by the NRC, could cost operators $100 million per plant.
If Entergy cannot compete with Hydro-Quebec on price, and if it faces a $100 million bill to upgrade Vermont Yankee, it might decide to close the plant for economic reasons, even if it wins its case in the U.S. Supreme Court.
Eric L. Davis is professor emeritus of political science at Middlebury College.
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