Thursday, March 27, 2014

Issues and Re-Issues on the way to a CPG for Vermont Yankee

The agreement

In December, Entergy and various state agencies signed an agreement about the final year of Vermont Yankee's operation, lawsuits, payments, and several issues concerning decommissioning.

If the Public Service Board (PSB) acts in favor of this agreement, Vermont Yankee will receive a Certificate of Public Good to operate to the end of this fuel cycle.  You can read more about this agreement in Guy Page's guest post: Reasons the Public Service Board Should Grant an CPG to Vermont Yankee, and my post The Proposed Entergy Settlement is Good for Vermont.

I hope this agreement will be ratified by the Public Service Board.

But the story is always longer and more complex than it first appears.

Issues and Re-Issues

1) Issue: The Ruling and the Timing
According to Section 2 of the Settlement Agreement, there's a March 31 deadline. If the Board does not grant Vermont Yankee a CPG that approves the continued operation of the plant through the end of the fuel cycle, and in accordance with the agreement terms, the agreement may terminate at the discretion of either party.   So we can expect to hear something from the PSB by Monday, March 31.
Re-Issue: BrinksmanshipLast year, when the Board had a deadline about a CPG for emergency diesels for Vermont Yankee, they waited till the last minute to issue the ruling. They played a game of brinksmanship, as I described in A Court Case with a Deadline: The Black Start Diesels.  Are they still playing this game, or will they rule?  We will know by March 31.
2) Issue: The Decommissioning Timing
When the agreement was announced, both sides stated that they had made an agreement on what they could agree upon, but other issues were not resolved. One particular issue is that the state wants fuel moved from the fuel pools as soon as possible, but the state also wants the "real decommissioning" to begin as soon as possible.

So the state wants the fuel to be moved, but no decommissioning funds are to be expended to move it. As I noted in The Fuel Pools: Opponents Say the Darndest Things Attorney General Bill Sorrell plans to "take legal action" if Entergy removes money from the fund in order to move the fuel rods.
Re-Issue: Pre-Emption Sorrell says the state wants a "legal opportunity to be heard on those requests."  In this case, "those requests" are Vermont Yankee requests to the NRC for permission to use decommissioning funds for fuel management. Of course, this is a traditional use of decommissioning funds.   
Does the state truly want to get into a court battle about regulating nuclear operations and safety? Didn't they learn something by losing two court cases?
3) Issue: Will the State Obey the Law?
Okay, let's assume the issues above are resolved nicely.  Let's say that the PSB rules on time, and they rule in substantial agreement with the Settlement Agreement.  Let's say that Attorney General Sorrell finally understands the term "federal jurisdiction over nuclear safety" and decides not to sue if Entergy uses decommissioning funds for decommissioning.  In other words, everything is great.

The question becomes: Will it matter? Will the state live up to its side of the bargain?

Re-Issue: The Shumlin Administration Regularly Breaks Its Own Laws
Earlier this year, John McClaughry wrote comments to the PSB: "Can Entergy Trust the State?" McClaughry explained that when the state passed a law giving the legislature a vote about Vermont Yankee's continued operation, this law was a clear breach of contract with Entergy. The law was a major and one-sided modification of the Memorandum of Understanding that Entergy had signed.  
In my opinion, the state is quite happy to break any law that inconveniences it.  This is not just about Entergy.  Governor Shumlin has been eager to pass a law for single-payer health care, and the law was passed. According to that law, the government had to propose a plan for financing the system, and the plan had to be presented to the legislature by January 15, 2013. It has still not been presented.  Estimates for the cost of the single-payer system range from $1.5 billion to $2.2 billion per year.  There are about 600,000 people in Vermont.  If the cost is $1.8 billion, that is $3000 per citizen.  A rather massive payroll tax has been proposed, and of course, everyone hates that idea.   
When Governor Shumlin was recently asked: "What else can we tax (besides a payroll tax  to finance this)?" Shumlin answered: "bubble gum and lollipops."  I encourage you to read Representative Tom Koch's Op Ed on this subject: A Governor Who is Above the Law.  I
 also recommend Rob Roper's commentary: Irreconcilable Differences in Single Payer Promises.  
Note for those who do not live in Vermont: this is not about the Affordable Care Act.  This is about a single-payer system that the state of Vermont, all by itself, plans to implement.
I don't want to get deep into the weeds of this controversy, but I just want to say that if Shumlin does not obey his own laws (the ones HE wanted to pass) about his own pet project, how is he going to treat the Entergy agreement?

Soon we will know

The PSB should rule by Monday, March 31, or the Settlement Agreement may become null and void.
  • The PSB may rule for the agreement, or they may rule against it, or they may stall and not rule at all.  
  • If they do rule for the agreement, the Attorney General may still sue Entergy for moving spent fuel from the fuel pool, and using the "wrong" money to do so.  
  • If all is well with the PSB ruling and the Attorney General, the state may simply ignore their obligations under the contract.

Welcome to Vermont politics. Stay tuned.  Oh yes.  Stay tuned.


Acknowledgment: John McClaughry and Rob Roper are officers of the Ethan Allen Institute.  I am director of the Energy Education Project which is part of that institute.

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