Entergy Nuclear Vt. Yankee, LLC v. Shumlin
| Decision Date | 14 August 2013 |
| Docket Number | Docket No. 12-707-cv (L),Docket No. 12-791-cv (XAP) |
| Parties | ENTERGY NUCLEAR VERMONT YANKEE, LLC, ENTERGY NUCLEAR OPERATIONS, INC., Plaintiffs-Appellees-Cross-Appellants, v. PETER SHUMLIN, in his official capacity as Governor of the State of Vermont, WILLIAM SORRELL, in his official capacity as Attorney General of the State of Vermont, JAMES VOLZ, in his official capacity as a member of the Vermont Public Service Board, JOHN BURKE, in his official capacity as a member of the Vermont Public Service Board, DAVID COEN, in his official capacity as a member of the Vermont Public Service Board, Defendants-Appellants-Cross-Appellees. |
| Court | U.S. Court of Appeals — Second Circuit |
Before: CARNEY and DRONEY, Circuit Judges, and GARDEPHE, District Judge*
Owners of nuclear power plant brought action against officials of the State of Vermont, seeking declaratory judgment and permanent injunction that three Vermont statutes are preempted by the Atomic Energy Act, and that Vermont's efforts to require a below-market power purchase agreement is preempted by the Federal Power Act and violates the dormant Commerce Clause. Following a bench trial, the United States District Court for the District of Vermont (Murtha, J.) ruled in plaintiffs' favor on Atomic Energy Act preemption claim and dormant Commerce Clause claim, and found that the Federal Power Act preemption claim was not ripe. We AFFIRM the district court as to the Atomic Energy Act and Federal Power Act preemption claims, and REVERSE the district court as to the dormant Commerce Clause claim.
Judge CARNEY concurs in a separate opinion.
Entergy Services, Inc., Jackson, MS; Robert
B. Hemley, Matthew B. Byrne, Gravel and
Shea PC, Burlington, VT, for Plaintiffs-
Appellees-Cross-Appellants Entergy
Nuclear Vermont Yankee, LLC, and Entergy
and David Coen.
Bahram Nassersharif, Neil E. Todreas, and
Richard Wilson in support of Plaintiffs-
Appellees-Cross-Appellants.
Patricia A. Millett, Ruthanne M. Deutsch
James E. Tysse, Akin Gump Strauss Hauer
& Feld LLP, Washington, DC; John B.
Inc., Washington, DC, for amicus curiae
Chamber of Commerce of the United States
of America in support of Plaintiffs-
Montpelier, VT, for amicus curiae
International Brotherhood of Electrical
Workers, Local Union 300 in support of
DC; Ellen C. Ginsberg, Nuclear Energy
Institute, Inc., for amicus curiae Nuclear
Energy Institute, Inc. in support of
DC, for amicus curiae Washington Legal
Foundation in support of Plaintiffs-
Vermont Natural Resources Council, and
Vermont Public Interest Research Group in
support of Defendants-Appellants-Cross-
Appellees.
Steven F. Huefner, The Ohio State
University, Moritz College of Law, for
amicus curiae National Conference of State
Legislatures in support of Defendants-
Appellants-Cross-Appellees.
Eric T. Schneiderman, Attorney General of
the State of New York, Barbara D.
Environmental Protection Bureau, Denise A.
Massachusetts, Mississippi, Missouri, New
Hampshire, and Utah in support of
Defendants-Appellants-Cross-Appellees.
Entergy Nuclear Vermont Yankee, LLC, and Entergy Nuclear Operations, Inc., (collectively, "Entergy")1 own and operate the Vermont Yankee Nuclear Power Station ("Vermont Yankee"), a nuclear power plant in Vernon, Vermont. Entergy brought suit in the United States District Court for the District of Vermont against the Governor and Attorney General of the State of Vermont and the members of the Vermont Public Service Board in their official capacities (collectively, "Vermont"), and asserted three claims. Count One alleged that three recently enacted Vermont statutes governing Vermont Yankee - Acts 74, 160, and 189 - concerned issues of radiological safety and thus were preempted by the federal Atomic Energy Act. Count Two alleged that Vermont had attempted to condition its grant of permission to operate Vermont Yankee on the execution of a power purchase agreement that favored Vermont retail consumers, and that this attempt was preempted by the Federal Power Act. Count Three asserted that these same actions with respect to the power purchase agreement also violated the dormant Commerce Clause of the United States Constitution. Following a bench trial, the district court (Murtha, J.) found in favor of Entergy as to Count One with respect to Acts 74 and 160 and found the challenge to Act 189 to be moot.2 The district court also found in favor of Entergy as to Count Three. Lastly, the district court found Count Two to be premature. We affirm the district court as to Counts One and Two, and reverse the district court as to Count Three.
We summarize here those findings of fact relevant to this appeal that were made by the district court following the bench trial.
In 1972, Vermont Yankee opened and began operating under the ownership and management of the Vermont Yankee Nuclear Power Corporation (VYNPC), a joint venture of eight New England retail electric utilities. Among the eight members of the joint venture were two Vermont electric companies (Central Vermont Public Service and Green Mountain Power), which owned a collective fifty-five percent share of Vermont Yankee. Vermont Yankee had been granted a forty-year Facility Operating License by the Atomic Energy Commission, the federal agency that preceded the Nuclear Regulatory Commission (NRC). The forty-year license was to expire on March 21, 2012.
In 1999, VYNPC sought to sell Vermont Yankee. After an initial bid by one firm was rejected by the Vermont Public Service Board (the "Board"),3 Entergy submitted a bid for Vermont Yankee in the summer of 2001 and sought a "certificate of public good" (CPG), a license from the Board to continue to operate Vermont Yankee under Vermont state law.4 As it was negotiating with the Board, Entergy entered into a memorandum of understanding (MOU) (the "2002 MOU") with the Vermont Department of Public Service (the "Department").5 The 2002 MOU incorporated a power purchase agreement (PPA) Entergy executed in 2001 (the "2001 PPA") that promised Vermont retail electric utilities favorable pricing terms for the purchase of power from Vermont Yankee until 2012.6 Entergy maintains it agreed to the 2001 PPA because it feared that the Department would not otherwise recommend a CPG for Vermont Yankee. Entergy also agreed in the 2002 MOU to "waive any claim . . . that federal law preempts the jurisdiction of the Board."
On June 13, 2002, the Board approved the sale of Vermont Yankee to Entergy and issued a new CPG. In its Decision and Final Order, the Board stated that the sale of Vermont Yankee to Entergy would "promote the general good" in part because, "under most reasonably foreseeable scenarios, the transactions are highly likely to produce an economic benefit for Vermont ratepayers." In re Vt. Yankee Nuclear Power Corp., Docket No. 6545, 2002 WL 1997942, at *1 (Vt. Pub. Serv. Bd. June 13, 2002). The Order specifically endorsed the 2001 PPA because it allowed Vermont retail utilities to purchase power from Vermont Yankee at prices that "are substantially below the 'currently committed' operating costs of Vermont Yankee over the remaining term of its license." Id. The Order noted that the 2001 PPA also imposed a "cap on the charges for Vermont Yankee power." Id.
In 2002, Entergy obtained from the Federal Energy Regulatory Commission (FERC) authorization to sell power into the interstate market under a market-based tariff, which remains in effect. The authorization permits Entergy to sell power wholesale through ISO-New England ("ISO-NE"), a nonprofit independent system operator under FERC regulation that administers New England's energy markets. ISO-NE's stated responsibilities are to maintain "reliable power system operations," ensure "efficient and competitive markets," and to "administer [the] regional transmission tariff, including comprehensive regional system planning."
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