Appeals Court Blocks Attempt by Vermont to Close a Nuclear Plant

“The nuclear power industry has just been delivered a tremendous victory against the attempt by any state to shut down federally regulated nuclear power plants,” said Kathleen Sullivan, a lawyer for Entergy, which owns Vermont Yankee.

The court found that states are “pre-empted” from regulating safety by the Atomic Energy Act of 1946, which made safety a federal responsibility. The Legislature had sought to shut the plant by denying Entergy a “certificate of public good” that is required for all power plants. But the court said Vermont was unpersuasive when it said that the reasons for the denial were that the reactor was too costly and unreliable, and that closing it would encourage the development of renewable energy from wind or wood.

In hearings and floor debate, Vermont legislators referred often to the idea that they could not legislate over the safety of the plant, which is on the Connecticut River near the Massachusetts border, and would have to find other reasons to close it.

“Vermont tried to escape the prohibition by saying, ‘Oh, no, we were really trying to encourage energy diversity,’ ” Ms. Sullivan said.

The court also found that because the reactor operated in a competitive market for electricity, Vermont could not close it because it was too expensive.

The appeals court struck down one finding by the lower court, related to the Constitution’s interstate commerce clause, that would have given Entergy the ability to seek reimbursement from Vermont for its legal costs.

The state has not decided whether to appeal, said Christopher Recchia, the commissioner of the Vermont Public Service Department, which represents consumers before the body that regulates electricity rates. It has also not yet issued the “certificate of public good,” he said.

“We’re still moving forward, and obviously we have been focusing on the areas that the state does have jurisdiction over,” he said, including environmental issues and the economic impact of employment at the plant.

Sandra Levine, a senior lawyer at the Conservation Law Foundation, a nonprofit group that entered the case as an ally of the state, said the court should not have looked at what motivated the lawmakers.

“The legislation speaks for itself,” she said.

But because the appellate judges reaffirmed the ability of courts to examine the record and divine the real reasons for state actions, it could be relevant in New York, where the governor, Andrew M. Cuomo, is seeking to close the Indian Point reactors, which are also owned by Entergy, on the Hudson River in Westchester County.

New York is appearing before the Nuclear Regulatory Commission on whether the two operating reactors there should be allowed 20-year extensions to their initial 40-year operating licenses. But it is also seeking to close the plants by imposing new limits on the use of water from the Hudson.

Other states have made it difficult for reactors to build additional storage for their nuclear waste; several have banned the construction of reactors until the nuclear waste problem is resolved.

While the court decision on Wednesday appears to keep Vermont Yankee safe from local political pressure, financial analysts say that it and other reactors have become far less profitable because the price they get for their electricity has fallen.

Entergy recently announced that it would cut 30 jobs, out of 650, at Vermont Yankee by the end of the year.

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