Entergy Nuclear Vt. Yankee, LLC v. Shumlin

Decision Date14 August 2013
Docket NumberDocket Nos. 12–707–cv (L) 12–791–cv (XAP).
Citation733 F.3d 393
PartiesENTERGY 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.
CourtU.S. Court of Appeals — Second Circuit

OPINION TEXT STARTS HERE

Preempted

10 V.S.A. §§ 6522(c)(2, 4); 30 V.S.A. §§ 248, 254

Kathleen M. Sullivan, Faith E. Gay, Robert C. Juman, Sanford I. Weisburst, William B. Adams, Ellyde Roko, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY; Marcus V. Brown, Wendy Hickok Robinson, Entergy Services, Inc., New Orleans, LA; Timothy A. Ngau, Entergy Services, Inc., Jackson, MS; Robert B. Hemley, Matthew B. Byrne, Gravel and Shea PC, Burlington, VT, for PlaintiffsAppelleesCross–Appellants Entergy Nuclear Vermont Yankee, LLC, and Entergy Nuclear Operations, Inc.

David C. Frederick, Scott H. Angstreich, William J. Rinner, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, D.C.; William H. Sorrell, Attorney General for the State of Vermont, Scot L. Kline, Bridget C. Asay, Kyle H. Landis–Marinello, Assistant Attorneys General for the State of Vermont, Montpelier, VT, for DefendantsAppellantsCross–Appellees Peter Shumlin, William H. Sorrell, James Volz, John Burke, and David Coen.

Martin S. Kaufman, Atlantic Legal Foundation, Larchmont, NY, for amici curiae William Anders, Jerome I. Friedman, Sheldon L. Glashow, Roy J. Glauber, Dudley R. Herschbach, Mujid S. Kazimi, Bahram Nassersharif, Neil E. Todreas, and Richard Wilson in support of PlaintiffsAppellees–Cross–Appellants.

Patricia A. Millett, Ruthanne M. DeutschJames E. Tysse, Akin Gump Strauss Hauer & Feld LLP, Washington, DC; John B. Capehart, Akin Gump Strauss Hauer & Feld LLP, Dallas, TX; Robin S. Conrad, Rachel Brand, National Chamber Litigation Center, Inc., Washington, DC, for amicus curiae Chamber of Commerce of the United States of America in support of PlaintiffsAppellees–Cross–Appellants.

Caroline S. Earle, Ellis Boxer & Blake, Montpelier, VT, for amicus curiae International Brotherhood of Electrical Workers, Local Union 300 in support of PlaintiffsAppellees–Cross–Appellants.

Peter D. Keisler, Quin M. Sorenson, Joshua J. Fougere, Sidley Austin LLP, Washington, DC; Ellen C. Ginsberg, Nuclear Energy Institute, Inc., for amicus curiae Nuclear Energy Institute, Inc. in support of PlaintiffsAppellees–Cross–Appellants.

Richard A. Samp, Cory L. Andrews, Washington Legal Foundation, Washington, DC, for amicus curiae Washington Legal Foundation in support of PlaintiffsAppellees–Cross–Appellants.

Sandra Levine, Conservation Law Foundation, Montpelier, VT; Jared Margolis, New England Coalition, Brattleboro, VT; Jamey Fidel, Paul Brierre, Vermont Natural Resources Council, Montpelier, VT; James Dumont, Vermont Public Interest Research Group, Montpelier, VT, for amici curiae Conservation Law Foundation, New England Coalition, Vermont Natural Resources Council, and Vermont Public Interest Research Group in support of DefendantsAppellants–Cross–Appellees.

Steven F. Huefner, The Ohio State University, Moritz College of Law, for amicus curiae National Conference of State Legislatures in support of DefendantsAppellants–Cross–Appellees.

Eric T. Schneiderman, Attorney General of the State of New York, Barbara D. Underwood, Solicitor General, Monica Wagner, Deputy Bureau Chief, Environmental Protection Bureau, Denise A. Hartman and Andrew B. Ayers, Assistant Solicitors General of Counsel, Albany, NY, for amici curiae States of New York, Connecticut, Iowa, Maryland, Massachusetts, Mississippi, Missouri, New Hampshire, and Utah in support of DefendantsAppellants–Cross–Appellees.

Before: CARNEY and DRONEY, Circuit Judges, and GARDEPHE, District Judge.*

DRONEY, Circuit Judge:

Entergy Nuclear Vermont Yankee, LLC, and Entergy Nuclear Operations, Inc., (collectively, Entergy) 1 own and operatethe 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.

BACKGROUND

We summarize here those findings of fact relevant to this appeal that were made by the district court following the bench trial.

I. The History of Vermont Yankee

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.”

II. The Recent Vermont Legislation Concerning Vermont YankeeA. Act 74: The Vermont Legislation Concerning Increased Nuclear Waste Storage by Vermont Yankee

In 2003, Entergy petitioned the Board to obtain a twenty-percent “uprate,” which would allow an increase in Vermont Yankee's power output and also result in a concomitant increase in nuclear waste. See Entergy Nuclear Vt. Yankee, LLC v. United States, 95 Fed.Cl. 160, 173 (2010), aff'd in part, rev'd in part sub nom., Vt. Yankee Nuclear Power Corp. v. Entergy Nuclear Vt. Yankee, LLC, 683 F.3d 1330 (Fed.Cir.2012). Under a statute enacted in 1977—five years after Vermont Yankee first began operating—the construction of new nuclear waste storage facilities in Vermont was prohibited unless the Vermont Legislature passed a bill or joint resolution finding that the facilities promoted the “general good of the state.” Vt. Stat. Ann. tit. 10, § 6501(a). However,...

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