Court clash in Vermont might alter balance of power over nuclear plants

Introduction

A utility company has challenged a state’s sovereignty over nuclear power plants within its borders, in a case whose eventual outcome could ripple across the nation.

The owner of the Vermont Yankee nuclear power plant — a subsidiary of New Orleans-based Entergy Corporation — sued Vermont yesterday in federal court, to prevent the state from forcing the 39-year-old power plant to cease operation next March.

Whoever prevails, the precedent could affect the relicensing process for aging reactors nationwide, legal experts agree. There are 104 nuclear reactors, now operating in 31 states across the country, that collectively provide about 20 percent of the nation’s electricity. As costs for new construction of a nuclear power plant skyrocket, Entergy is only one of a long line of utilities seeking federal permits to extend — by 20 years — the 40-year licenses held by more than three-quarters of existing reactors.

“This will likely be a landmark case, establishing a dividing line between federal government and states over nuclear issues,” says Boris Mamlyuk, an assistant professor at Ohio Northern University College of Law, who has written about the case. “It also holds potential — if the ruling goes for Vermont — to help revive the nuclear safety debate in the US on a major scale.”

At the same time, the circumstances of the case are unique. Vermont already negotiated an agreement with the nuclear plant’s owner that gives the state relicensing authority.

The case, he and others note, is heightened by public concern over the Fukushima accident and the safety of 28 existing plants in the US with the same design as the Japanese plant — including the Vermont Yankee plant. Some question whether federal oversight is adequate, since the Nuclear Regulatory Commission (NRC) granted a new federal license to the plant — over Vermont’s protests — even as the Fukushima crisis was unfolding.

“NRC violated the law by re-licensing the Vermont Yankee reactor at the same time it launched an investigation into whether US safety and environmental standards are strong enough, in light of the Fukushima accident,” says Diane Curran, a Washington attorney representing several groups seeking an NRC review of relicensing.

Under existing law, states have definite — if strictly limited — rights regarding nuclear power plants. These included a say in the siting, economics, transmission, aesthetics and other issues. States do not have authority over safety and licensing. That resides squarely with the federal government.

The Vermont case could reinforce those states’ rights, expand them — or see them overturned entirely. Entergy argues the federal government has near-complete control over the licensing of nuclear power plants. If the case rises to the US Supreme Court, as some suspect it might, the ruling could sharply curb federal say on nuclear power plants inside state lines.

“Litigation is by far the least-preferred approach,” said Richard Smith, president of Entergy Wholesale Commodities, in a statement. “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.”

There are unique issues, too. Unlike other states, Vermont negotiated a 2002 agreement with Entergy, which it amended in 2006, giving the state authority to grant — or not — a state permit, if the company sought to relicense the plant. Last year, the state senate voted 26 to 4 to refuse a new state permit, citing radioactive leaks that went unreported and the collapse of a Vermont Yankee cooling tower in 2007, among other concerns.

Despite these unique elements, Mr. Mamlyuk, Ms. Curran, and other experts say the decision appears to fall under precedent set by a 1983 Supreme Court case in which California succeeded in blocking Pacific Gas & Electric (PG&E) from building new nuclear plants, due to lack of nuclear-waste storage. The case also established “federal preemption” — and the supremacy of federal oversight of nuclear licensing and safety matters.

“If this case were to change the 1983 court decision, then every state would lose the power they’ve had since joining the union,” says Michael Dworkin, former chairman of the Vermont Public Service Board. “We’re talking about a state’s power over land use and all powers not expressly taken away by Congress. That’s what’s at stake if the company convinces the Supreme Court to take away those powers currently granted.”

Peter Bradford is less sure the case outcome could broaden state power, but agrees it could provoke Congress to set new terms for the collision between nuclear-power jurisdiction and states’ rights.

“This is probably the first major litigation involving [federal] preemption in years,” says Mr. Bradford, a former NRC member and former chair of the Maine and New York utility commissions. “It will present some big questions for Congress to solve, no matter the outcome of this case.”