Monday, July 18, 2011

Ruling on Injunction Goes Against Entergy: Closing a Plant and Endangering the Grid is Not Irreparable Harm

Today, Judge Murtha ruled against Entergy's request for an injunction. Entergy had asked for an injunction that would allow Vermont Yankee to keep operating while the lawsuits wended their way through the courts. Today, Judge Murtha denied that request.

Over the next weeks, this decision will be the subject of much legal commentary. From two articles, one in Vermont Digger and one by Reuters, I understand that the judge ruled "the decision to refuel is either not harmful if Entergy prevails on the merits, or it is not a cognizable injury if Vermont’s statutes are upheld. This may present a [business decision-type] dilemma [for Entergy], but it does not constitute irreparable harm that can be resolved by a preliminary injunction.” Judge Murtha also set the opening date for the full hearing for September 12.

William Sorrell, the Vermont Attorney General, was quoted as saying that, with the early September trial date, there will be a ruling on the merits of the case before March. So, from his point of view, everything is great.

March Isn't the Issue

By March, there will indeed be one ruling, by Judge Murtha. Since both sides plan to appeal, and Murtha will rule for one side or another, the chances are good that the court case will continue past March. The March ruling will be the first of many.

The issue is not about March. The issue is whether or not Vermont Yankee will order fuel for an October outage, or shut the plant down in October. That decision has to be made by the end of this week, according to Entergy. March isn't the issue. July is the issue about ordering fuel. October is the issue about possibly shutting down the plant.

My Idea

The usual description of Entergy's options are the following:

  • Spend $100 million on an outage in October, an expense that is usually amortized over 18 months of operation. Face the possibility of running the plant for only six months past the outage, and de facto losing about $60 million dollars in expense that cannot be recaptured by sales.
  • Don't spend $100 million on the outage and shut the plant down in October, leading to great rejoicing in Montpelier, no matter how the lawsuit eventually comes out. In this case, Entergy doesn't lose as much money, but it loses something even more valuable. It loses many of the plant staff. (I assume that Entergy would put the plant in some type of lay-up where it could be restarted later. I have no particular reason to make that assumption.)
  • Don't spend $100 million on the outage, and shut the plant down permanently in October. (This is the more general assumption being made.)

All of these are lousy options.

I think I have a better idea. (Not that Entergy asked me!)

My goal: don't spend the money on the refueling, but keep the staff as long as possible.

My idea: Cut back power from the plant immediately to perhaps 25% power. Keep running at this level as long as it is possible and legal, well past October. Perhaps go for a second injunction as March approaches and the appeal process takes over. Or, if Entergy wins the case at this level, refuel at that point and let the State go for an injunction on any appeal.

What are the downsides of my idea?
  • Entergy will be employing people but making less revenue.
  • The grid will suffer in the summer. The big nuke plants never refuel during the summer season.
However, Entergy cares about its workers, so the first part isn't too bad. The second part---what can I say? It will be amusing to watch the utilities scrambling hard for power, facing the possibility of rolling brownouts in hot weather, and asking the PSB for emergency rate increases.

At least, it will amuse some of us.

Update: You can download Judge Murtha's ruling here, and Shay Totten of 7 days has a very thoughtful analysis. Did Vermont really win?

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Thank you to Rod Adams today for the link to this post in his blog, and the thoughtful words about it.

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Event Today

The Safe and Green Campaign, the same group that led the protest on the street in front of the Court House in June, is sponsoring a discussion tomorrow in Brattleboro about pre-emption. Besides VLS faculty (Kreis and Parenthau), New England Coalition and Citizens Action Network will be presenting. 7 to 8:30. With such a long list of presenters, it doesn't sound like much audience participation will be available. In other words, don't expect to ask any questions: this isn't an NRC meeting, it's a VLS meeting. However, Kreis is usually worth listening to, so it might be worthwhile to attend. Update and Correction: I listed this meeting as being at Vermont Law School in an earlier version of this blog. It is in Brattleboro.


Nuclear fuel rods being inspected (Unfortunately, the illustration shows PWR rods, not BWR rods, but I use the graphics I can find.)

9 comments:

Travelogue for the Universe said...

Great explanation of what occured. Thank you. I disagree with this judge diregarding the costs to this plant and what costs to the public, business and our power rates? Mary

Meredith Angwin said...

Mary. This is so depressing. I am Facebook friends with plant people. Lots of FB chatter from them about selling their houses. Whether the judge thinks this is a mere Business Decision or not, Irreperable Harm is going to occur to this state, from this decision.

Thanks for the comment.

Robert Hargraves said...

I recommend that Entergy spend the $100 million and refuel. When October comes, continue operation -- as the NRC has licensed. Let the state try to seek an injunction to shut it down. Providing electric power safely is not "irreparable harm" to the state of Vermont, so the plant will keep operating through years of lawsuits.

I like the 25% idea, but Entergy would be losing money rapidly during this period.

Steve Aplin said...

Meredith, great post. What a situation.

I recall a VT state senator saying “this idea that everybody is entitled to all the electricity they want, whenever they want it, maybe is an outdated concept.”

If Entergy were to implement your idea, we would see in real-time what your state's power consumers really think about that statement. I agree, it would be amusing.

My guess is that in the context of the current heat wave, they would disagree.

I think what's outdated is the concept that we should do without power. I think it became outdated when the grid began reaching into rural areas in 1920-1950 and rural people began using electric-powered washing machines. Ten bucks says the senator rarely hand-washes his clothes.

Meredith Angwin said...

Yeah, that Vermont Senator said that in a debate with me and Howard. For me, it was one of those ah-ha moments. I finally understood that many opponents don't want this kind of power or that kind of power. They want to control the actions of adults and make them be GOOD. As they define good, of course

John Wheeler said...

I agree, the judge's decision is illogical, and places the people of Vermont and the New England power grid at risk.

While I have no direct knowledge of the details of power contracts VY has with it's customers, I suspect reduced power operation is not financially feasible. In the summer and fall electricity prices rise from demand on the system and the increased burning of expensive gas. In the Northeast, base load plants make a good portion of their annual profits selling excess power (beyond their long term contracts) into this lucrative market. By reducing output Vermont Yankee would likely miss out on this revenue they may be counting on just to break even. If the plant was forced to buy replacement power to satisfy contracts, the extra costs could be extraordinary.

Meredith Angwin said...

John. I also don't know enough about the contracts. However, I do know that VY sells a significant portion of its power to Vermont utilities at 4.4 cents, according to the Memorandum of Understanding, still in effect. I believe they sell only about 20% of their power on the merchant market.

About two years ago, I heard the Vermont distribution utilities asking the legislature to try to ensure that Entergy did any major outage (when it might replace equipment, etc) AFTER March 2012, so they would keep getting the inexpensive power THROUGH March 2012. The MOU covers power prices through March 2012 (and to some extent, after 2012, but that is revenue sharing, not power prices).

Meredith Angwin said...

John. Basically, with the M OU, Entergy does not have to buy replacement power for Vermont utiliities. IF Entergy made such an arrangement for some of it's uprate power, I do not know about it. My understanding is that if the plant is shut down in 2012, Entergy does not owe any money to any utility.

jimwg said...

I don't want to sound dense and simple, but what exactly is the case for closing the plant (along the lines with Indian Point?) Can a plant be shut dowm simply based on a FEAR of what MIGHT happen in a rare accident -- ignoring the _historical record_ of nuclear safety and insanely low worker/public casuality rates -- even in "worst case" Fukushima? Yankees's lawyers ought do their homework on these blogs!

James Greenidge