The Commerce Clause and the Insistence on a "Good Deal"
As I noted in an earlier post, one part of the Entergy lawsuit is the claim that the Legislature of Vermont violated the Commerce clause of the Constitution.
The legislators who were against the plant's continued operation probably realized (at some level of their minds) that constantly decrying the plant's safety might get them into trouble vis-a-vis the NRC.
So, for many of the legislators, a favorite statement was some variation of : "I won't vote for the plant continuing to run unless they give Vermont a good deal." Or, alternatively: "They haven't given Vermont a good enough deal, yet."
The legislators made it abundantly clear, on many occasions, that the State of Vermont was not going to let Vermont Yankee operate unless Entergy gave Vermont utilities a better deal than they give out-of-state customers.
That was equivalent was putting a tariff on goods shipped out of state, which is illegal according to the Commerce clause of the Constitution. As one on-line legal definition states: "The Commerce Clause authorizes Congress to regulate commerce in order to ensure that the flow of interstate commerce is free from local restraints imposed by various states."
As the Entergy lawsuit brief says: “Vermont officials have further stated that they might condition any favorable exercise of the state’s supposed licensing authority upon the wholesale sale of power generated by the Vermont Yankee Station to Vermont retail utilities at preferential rates compared to the rates charged by non-Vermont retail utilities.”
“This condition coerces Plaintiff [Entergy] to enter into below market power purchase agreements with Vermont’s retail utilities that will effectively result in [Vermont Yankee] and out of state consumers subsidizing the electric bills of Vermont’s consumers.”
There's another side to this issue, not about Vermont Yankee or even the U.S. Constitution. "They have to give us a better deal or else they are gone" is a form of political coercion. In other words, a shakedown.
John McClaughry of the Ethan Allen Institute wrote an article about this: Shumlin's Vermont Yankee Coercion Scheme. The article has appeared at True North Reports, Vermont Digger and Vermont Tiger.
Whatever happens in the lawsuit or with Vermont Yankee, this action of the legislature makes it clear to employers and businessmen what they can expect at the hands of the State of Vermont. We don't welcome employers in Vermont. We shake them down for all they've got. "Give Vermont the deal we want, or we'll shut you down."
In the past, I was annoyed at the fact that Shumlin always emphasized that Entergy is a "Louisiana Company". He frequently stated some variation of: "We don't do things in Vermont the way they do in Louisiana." I wondered what other out-of-state companies would think of this. Would they come to Vermont to set up a factory? Would they be attacked as "That's a Delaware company. We don't do things in Vermont the way they do in Delaware" ? Would an out-of-state company even consider coming to Vermont?
Vermont has attacked a major out of state company for---being from out-of-state. It has also coerced that company: "you can't operate here unless you give us the deal we want."
Whichever way the Entergy lawsuit goes, this way of treating employers does does not portend a bright future for Vermont. Nobody likes a shakedown.
I headed this post with a song about extracting money from the people you supposedly serve: "Master of the House" from Les Mis. For my purposes, the song should be titled "Master of Vermont," since the House, the Senate and the Governor were all involved in the shakedown. It's not fair to just pick on the House. (small lame pun...)
Note and Disclosure: The Energy Education Project that I direct is part of the Ethan Allen Institute, co-founded by John McClaughry.