It's the Renewables, Stupid? Vermont Files a Brief

Attorney General Sorrell

Opponent Rhetoric in the Past

Long before the lawsuits, Howard Shaffer and I would attend various committee meetings, rallies, and so forth.  Opponents would always say: "We must shut down Vermont Yankee so we can build renewables!"  Or similar words to the same effect.

Howard and I would shake our heads in wonder.  These statements were the merest rhetoric.  In reality, the existence of any particular power plant does not prevent or encourage renewables.  As a matter of fact, Vermont Yankee contributions to the Clean Energy Development Fund paid for much renewable development in Vermont.  Still, VPIRG especially made a point of "We must close Vermont Yankee so we can build renewables!"

Sorrell Borrows the Rhetoric to File A Brief

Fast forward to the brief that the State of Vermont filed in appeals court on Monday of this week.  They have borrowed the old VPIRG rhetoric as the main basis for Vermont's appeal.

Starting on page 17, the brief shows that the state has had energy plans since the early 80s, all the plans encouraged renewable energy, renewable energy has always been important to Vermont, and...wait for it...Act 160 about Vermont Yankee was a mere sunset-provision procedural law about energy planning for the state (page 25):

Under this framework, Act 160 is not preempted because it is a process statute — as relevant here, a sunset provision — by which the Legislature granted itself a role in deciding whether Vermont Yankee would continue to operate past the date on which its existing licenses were set to expire. Act 160 sets forth the Legislature’s purposes for making this change to the CPG renewal process, and those purposes are consistent with decades of Vermont energy policy:

In other words, the state wants to shut down Vermont Yankee in order to build renewables.

There's more the 78 page brief than this, but this is the crux of it, in my opinion.    When I linked to the brief from the Save Vermont Yankee FB page, I wrote:

Direct link to the Vermont AG appeal of the pro-VY ruling. Appeal starts with statements that Vermont wants renewables, not fossil or nuclear, and it says so in the Vermont energy plans! So they can shut down any non-renewable plant they choose, maybe? That seems a very weak argument, but hey, I'm no lawyer.

Sarcasm alert:  I wonder how the general rejoicing at Gaz Metro/GMP purchase of electricity from Seabrook Nuclear power is going to play in court..  I have a blog post about that: Nimby and Nukes. Also, Shumlin applauded the Seabrook deal because "cheap power makes a real difference." They tried to shut down VY to build renewables? Really? Just askin'...

My photo:
base of turbine at Lempster wind farm

A Lawyer Mostly Agrees with My Assessment


Don Kreis of Vermont Law School has an excellent blog post, mostly agreeing with my assessment.  State to Court of Appeals: Act 160 Just a “Process Statute”.  I wrote my note about Vermont's brief on FB ('seems a very weak argument") on Tuesday, June 5, and Kreis posted on Wednesday June 6.  Great minds think alike!  I am always pleased when a knowledgeable lawyer agrees with my assessment of a court action.

Kreis's post is worth reading.  It covers a lot more ground than my comments do, including the fact that Attorney General Sorrell  has hired a high-powered D.C. law firm to assist Vermont in its case. However, the Vermont argument gets back to the same thing: the legislature now says they were just trying to get some renewables going, not anything pre-empted. They were shutting the plant to build renewables! They weren't regulating radiological safety, heavens no!

I quote part of Kreis concluding paragraph:

But this begs the ultimate question, which is:  If Act 160 was not an effort to regulate radiological safety, then what was its purpose?  The idea that it was merely a “process statute” and a “sunset provision” is somewhat difficult to accept, at least on first read

Kreis also says that further arguments may indeed reinforce the AGs view of Act 160.  I do not want to put words in his mouth....Kreis and I agree only partially. I recommend his post for a fuller explanation of his views.  Also, he starts with an amusing and sarcastic look at possible legal implications of the Seabrook purchase.

My Assessment of the Brief

Since the legislators were okay with buying nuclear power from Seabrook, and they talked (a lot) about tritium at Vermont Yankee...what were they regulating?  This was no mere "sunset provision." In my opinion, the Vermont legislators were regulating radiological safety and such regulation is pre-empted by the federal government.

Vermont can hire expensive lawyers with taxpayer money. However, in my opinion,  Act 160 and the vote were about radiological safety, not about renewables.  I am sure Entergy will make that case in its rebuttal. And the court cases go on....

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By the Way: Please "like" the Save Vermont Yankee Facebook Page.

Also: Act 160 was the act by which the legislature, not the Public Service Board, decided whether Vermont Yankee would get a Certificate of Public Good from the state of Vermont.

The Sixth Lawsuit about Vermont Yankee: Suing for the Cost of Replacement Power

I never should have done it. Four days ago, I published a post Five Legal Wrangles About Vermont Yankee.

I counted five, but lo and behold! Today there's a sixth lawsuit! You just can't keep up a count around here.

The Cooling Tower Problems

In August 2007 and July 2008, Vermont Yankee had widely-publicized collapses of a part of the cooling tower bank. The first incident happened because it happened. Vermont Yankee has rather old wooden cooling towers, and there was a maintenance problem on one of them. The second incident happened because of an incomplete repair of the first incident. In both cases, the plant stayed on-line, but de-rated power. It lowered power output for 11 days (first incident) and 12 days (second incident).

On the basis of these incidents, Central Vermont Public Service (CVPS) and Green Mountain Power (GMP) are suing Entergy. They had to buy more expensive replacement power during the time of lowered output from Vermont Yankee. They say that the plant was negligent about maintaining the cooling towers, so they deserve the money in recompense. You can read their press release here and it has been widely reprinted as a news article. Albany station WAMC had a short program on the lawsuit, hosted by Pat Bradley. Don Kreis of Vermont Law School gives his opinion, and I give mine. (The program is three minutes long.)

If Everything Isn't Perfect, We're Suing

Briefly speaking, this is a ridiculous lawsuit. There are all sorts of utility contracts out there, and CVPS and GMP did not have a contract in which Entergy had to pay them for replacement power. That is the end of the story. GMP and CVPS didn't have a contract that required reimbursement.

The utilities are claiming that Entergy's plant maintenance was so bad that the de-rating was due to Entergy negligence. I have one word for that: Ridiculous! Vermont Yankee has a high capacity factor, and has had a series of breaker-to-breaker runs (from one refueling to another without a stop). In this case, it wasn't even off-line for the repairs. It had just powered down.

If utilities sued every time a plant powered down or went off-line unexpectedly, there would be no end to it! Of course, if a plant is not operating at full capacity, something went wrong. I suppose this could have been prevented if everything had been done perfectly. Let's look at coal plants, for example. They have to keep testing the coal they receive. Let's say they receive some coal and they don't get the chemistry analysis quite right and boom...their boiler is coated with slag and they are off-line. (Most coal plants test coal extensively and blend coal to avoid this situation. They don't always manage to avoid it.) Should a coal plant be sued on the basis that they should have done a better chemical analysis?

Utility Contracts

There are all sorts of utility contracts out there. Bob Hargraves and I visited seven plants when we led the ILEAD course on Energy Safari. If you read the posts on the Energy Safari blog, you will read about power plants that:

• sell power at the market price when the price is high enough
• sell power at a fixed price, and have to reimburse the utility when they have promised power but can't deliver
• sell power at a fixed price, and don't have to reimburse anybody if their power isn't available
• don't want to tell us the terms of their contracts

If a utility wants to buy power that is available without interruption at a given price, it writes a contract saying that the power plant must reimburse the utility for any power that is not provided. Of course, the utility can expect to pay more for power on that basis, just as you can expect to pay for an "extended service contract" on an appliance. Insurance against failure costs money.

Insurance

The utility can also pay money for insurance. If the utility buys insurance against having to buy higher-cost power, it doesn't have to put any terms in the contract with the power plant.

For example, I attended a hearing at the State House when GMP and CVPS testified that they actually have insurance policies which would reimburse them for replacement power costs if Vermont Yankee power was not available to them. The policies began to pay if Vermont Yankee was off-line for more than about 30 days. I am sure the utilities could have bought other insurance: insurance against three-day outages, twelve day power reductions, anything. Insurance companies love to sell insurance! However, insurance against small events would have been expensive, since such events are very likely. Most companies self-insure for small problems.

Money or Harassment?

I can never know anyone's motives, of course. However, to me this lawsuit sounds more harassment than like a business situation. Surely the utilities know what kind of contract they have with Vermont Yankee? Surely they know that they don't have the sort of contract that includes reimbursement for replacement power? Surely they know about the various types of contracts? Surely they know that accusing a plant of negligent maintenance won't fly, when the plant is running from fuel loading to fuel loading (breaker to breaker), 500 days or more, without unplanned shut-downs? Surely they know they could have purchased insurance against the costs of replacement power? Surely they know they actually have purchased insurance against the costs of replacement power due to long outages?

GMP and CVPS are acting as if they don't know any of this.

Interestingly, the utilities want to have a jury trial on this subject. I think they are hoping to capitalize on the "Entergy Louisiana" and "strontium fish" rhetoric of the Vermont administration. They hope to win their case by pounding on the table.

Washing Machines

The Entergy lawyers can argue their case without any table-pounding.

"Ladies and gentlemen of the jury. CVPS and GMP had opportunities to insure themselves against paying the cost of replacement power. They could have stipulated that we pay the cost of replacement power as a requirement in their contract with Entergy. Or they could have bought third-party insurance for their costs during power derates or outages. CVPS and GMP did not taken any such action.

"Instead, these utilities are in the position of someone who does not buy the extended warranty on the new washing machine, but expects to get free service anyway. We at Entergy are pleased that they expected perfect operation of the plant. We are pleased our general excellent maintenance and breaker-to-breaker runs may have led them to expect perfect operation. However, they took no steps to protect themselves if operation was imperfect. Though we are flattered at their expectations, we must point out that expectations of perfect operation are unrealistic, and are certainly not enforceable through the courts."

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Picture of the Comerford Hydro plant from Energy Safari blog. Picture taken by Bob Hargraves. All other graphics from Wikipedia..

The Piping Conversation RESTORED

This post used to be titled The Piping Conversation Interrupted, and described a conversation about piping that mysteriously disappeared from the Vermont Digger web site.

I am happy to say the conversation is back! Don just emailed me that Vermont Digger had taken the conversation down by mistake. It's back!

A brief summary of the conversation below, and a hearty thanks to Don Kreis and Vermont Digger. I am deeply pleased that the Digger made a mistake and was not practicing any kind of censorship.

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In a recent post, An Amazing Conversation, I referred readers to a post and conversation on Vermont Digger. On the Vermont Digger web site, Professor Donald Kreis of Vermont Law School and I discussed various things about how Entergy had supplied information to its oversight panels. We disagreed.

Among other things, Don and I debated whether or not it was appropriate for utilities to give relatively limited answers to utility commissions and oversight groups. I felt that any lawyer would encourage limited answers to hostile questions, and Professor Kreis felt that utilities should freely and openly help their regulators by volunteering information.

However, in the course of the conversation, Don admitted that utilities rarely actually volunteer information. Not just in the case of Vermont Yankee, but in general. Utility regulators have to ask specific questions to get specific answers, just as happens in a legal proceeding.

As Kreis described the situation, a good lawyer will instruct a witness before that witness faces cross examination. The usual instruction goes like this: "If you are wearing a watch, and the opposing counsel asks if you know what time it is, you answer 'yes.' "

The question was..do you know? the answer is...yes. You do not volunteer even the time of day. Answer the question truthfully, and don't volunteer anything else.

Don and I agreed that it was a shame that utilities and regulators acted like opposing counsel, but in fact, they do. All over the country.

Whichever side of this debate you take, it was VERY civilized and made me feel good about have a conversation with a literate, witty person, Don Kreis. Yes, Don is generally in opposition to Vermont Yankee license continuance.

Thank you to Don and Vermont Digger for the excellent debate. Without a trace of censorship.

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The illustration is the cover of Milton's Aeropagitica, published in 1644. In this document, Milton argues for free speech and individual conscience.

An Amazing Conversation

My post on the Piping Diagrams elicited two very interesting replies, one from Commissioner O'Brien, and one from Don Kreis of Vermont Law School.

I am cutting and pasting their comments below.

However, something even more amazing has happened. In a world (Vermont) where people shout and throw manure, Professor Kreis and I are having a very civilized conversation about Vermont Yankee. We are discussing who said what to whom. We are having this discussion in a very positive manner. This is a conversation I want to publish on my blog! Alas, it is getting awfully long...so I will link to it, instead.

Read and join the conversation at Vermont Digger or add a comment on this blog. Thank you to Don Kreis and the people at Vermont Digger for this opportunity.

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IMPORTANT UPDATE: The link to the conversation at Vermont Digger no longer works, and the conversation has been removed from the site. An earlier post by Donald Kreis remains on the site.

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The comments from my earlier post, below.

Don Kreis said...

Meredith:

Thanks for the invitation to leap into the dialogue. If I am understanding our respective comments correctly, we are a couple of Tufte fans who aren't in fundamental disagreement here. Diagrams and technical reports would have been a good focus at the September 11, 2008 meeting, which instead was organized around a .ppt presentation that was unhelpful for precisely the same reason that the Boeing .ppt show was unhelpful during that final flight of the Shuttle Columbia.

Obviously, the 9/11/08 PowerPoint didn't have the devastating consequences the Boeing/NASA one did. I never suggested otherwise. Your real beef, I think, is with Tufte -- he could have chosen other, less high-stakes examples of bad PowerPoint slides. The world is awash in them.

MAY 9, 2010 8:08 PM

David O'Brien, Commissioner said...

Meredith, with all due respect I have to disagree with your characterization of the Department having egg on our face with respect to the now famous underground pipes. When others are looking at this issue they are missing a critical piece that is not in the VY investigation or recorded even in our emails. It is the repeated claims by VY persons at the many meetings we had together with the consulatants and the oversight panel where VY was questioned on their claim that they did not have any underground buried pipes. It was this repeated asseration by VY that we trusted that they were giving us an accurate answer.

There are so many people saying why not just look at the drawings. Well, first, they probably have no idea how many drawings there are for this plant and the drawings alone do not identify pipes carrying radionuclides. After discovering that the company's own affidavit by a Mr. Rademacher could not be relied upon, Bruce Hinckley, our consultant that assisted us with the NSA audit, had to have contractors go over the drawings and other information to identify the pipes that do carry radionulclides and it took about 5 weeks and cost about a 150K. People forget that the legislation had us on a very tight schedule where we had less than 4 months to complete a massive inspection. We had to get the scope of the inspection agreed upon with the POP so we could get started before the clock ran out. We did not have reason to believe that VY was not providing accurate information with regard to the pipes and therefore had no reason to second guess them by spending more time and money to verify their statement upfront.

In summary:

1. First, the question isn’t just about whether there were underground pipes at VY. Of course, there are underground pipes at VY. We all knew there were underground pipes at VY, but what we were told is that there were no underground piping systems carrying radionuclides. So we could have been aware of numerous drawings showing underground pipes and that would not have alarmed us or clued us in that there are underground pipes carrying radionuclides.

2. Second, as a long time regulator, we have to trust a utility to provide us with accurate information. Our entire system of regulation is based upon that basic premise. If that was not true, the DPS and every other PUC in the country would have to be at least twice as large. Once a utility shows it cannot be trusted to give accurate information, then we have to go over everything with a fine toothed comb. We said we would verify the piping affidavits that Entergy gave us because we no longer trusted them to give us correct information. Hence the extra 5 weeks and 150K worth of verification.

MAY 10, 2010 8:35 AM

Meredith Angwin said...

First, I would like to thank Donald Kreis and Commissioner O'Brien for their thoughtful responses to my blog.

Donald, just a note that it is not possible for me be annoyed at Tufte. I have admired him since I first saw his first book, The Visual Display of Quantitative Information. And he can use whatever examples he chooses.

My issue was different. The Report of the Investigation clearly states that Entergy gave P and ID diagrams and tables of piping to the NSA team in meetings on September 9 and 11, 2008. As I understand it, the NSA team received this piping information in both hard copy and electronic form. (This is not in the report, it is something I heard through the grapevine. Maybe NSA actually only received paper copies, I don't know for sure.)

You concentrate on the Powerpoint presentation, and ignore the backup data which Entergy gave to the NSA participants. In my post, I cited the pages for my sources of data exchange. Perhaps you can read pages 19 through 23 of the text (25 through 30 of the pdf) and tell me why you think the Powerpoint was the only significant information-exchange method?

Commissioner O'Brien, I want to thank you for your response, which was full of new information (or at least, new to me). I didn't understand the legislative requirement to complete the massive inspection in four months. I had no idea of the constraints under which the Department was operating. From an outsiders point of view, the whole thing has basically gone on forever, with dockets, VSNAP meetings, NSA panels, POP panels, etc. When you are working inside the project, though, life looks different. The Department was clearly put in a position of Never Time to Do It Right, Always Time to Do It Over. Six weeks and 150K to do it over! Thank you for explaining the situation.

Thank you both for your comments.