June 15, 2011, Cheryl Hanna: States’ NIMBY Argument Unlikely to Prevail

Professor Cheryl Hanna

Earlier this week, the state of Massachusetts filed a friend of the court brief supporting Vermont’s argument that federal law should not preempt the states from being able to regulate nuclear power plants within their borders, including refusing to re-license a plant. Massachusetts, like other states, doesn’t want the federal government to force it to accept a power plant that it no longer wants.

The Massachusetts filing highlights the NIMBY (Not In My Back Yard) phenomenon, one which I think is central to the case. Like it or not, nuclear power is to remain part of America’s energy future. President Obama continues to support it, even in the aftermath of the Japanese earthquake. And Vermont is going to be dependent on it given that Green Mountain Power has just signed a 23-year-contract with the Seabrook nuclear plant in neighboring New Hampshire. Thus, the fundamental question the courts will address is whether a state should able to trump the decision of the U.S. Nuclear Regulatory Commission (NRC) to keep a plant operating. I think, in the end, that a court is likely to find that Congress never intended the states to be able to exercise such power.

That’s where NIMBY comes in. One reason I think Vermont has an uphill legal battle is that were the courts to allow Vermont to shut down the plant, other states will likely exercise similar control, especially in those states like New York and Massachusetts, where nuclear power is becoming politically unpopular. So, some states – likely liberal and wealthier Northeast ones – would become nuclear-free, while other states – likely conservative and poorer Southern ones – would disproportionately bear the risks and burdens of housing these plants. The fewer states that are willing to play host, the less stable the nuclear energy market.

The fact that Entergy agreed to be regulated by Vermont is irrelevant if the courts find that Congress never intended to vest in the states veto power over the NRC. Rather, the Vermont Yankee memorandum of understanding is void because it violates the U.S. Constitution. A private company can’t waive the federal government’s authority to exercise its power over an industry that is essential to interstate commerce. If the courts enforce the memorandum of understanding, then every state could require nuclear power companies to sign these agreements as a condition of receiving local permits, thereby undermining federal supremacy. In other words, the courts could find that the NIMBY phenomenon was exactly what Congress wanted to avoid by vesting authority in the NRC.

Don’t get me wrong – personally, I share the concerns of many about Vermont Yankee’s safety and reliability. But the legal and policy issues involved are complex and implicate not just our tiny state but the entire nation. At the crux of this whole mess is a legitimate distrust of the NRC’s oversight of nuclear power. There is a great deal of evidence that the NRC may be too deferential to industry and not concerned enough about citizen safety. But that problem likely requires a political solution, not a legal one, which is why I remain a pessimist about Vermont’s chances of ultimately prevailing.


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5 Responses to June 15, 2011, Cheryl Hanna: States’ NIMBY Argument Unlikely to Prevail

  1. John Greenberg says:

    Cheryl Hanna presents what, charitably, could be called a “policy” argument, since it has no basis whatever in law or the Constitution. It sugars down to this: whatever energy source the feds want to foist off on the rest of us constitutes sound energy policy. It’s hard to know where to begin to refute this.

    Let’s start here. As the Attorneys General of both VT and MA have pointed out, we live under a carefully crafted Constitutional scheme of law, which provides for the sovereignty of BOTH the federal and the State governments. In rare instances, when this dual responsibility would result in untenable or confusing law, the Constitution allows Congress to use its authority to preempt State sovereignty, establishing uniformity across the nation. Such is the case here, where Congress determined that the national interest requires that there be only one regulatory authority in matters concerning the “safety and “nuclear aspects” of energy generation.” as the Supreme Court put it in the Pacific Gas & Electric (PG&E) case.

    Thus, in the Vermont Yankee (“VY”) case, no one contests the exclusivity granted to the Nuclear Regulatory Commission to determine whether VY is safe or whether it should be re-licensed according to NRC’s regulations. So that is NOT at issue in this case. Instead, the question is who should regulate all of the OTHER aspects of nuclear energy generation and thus of VY’s continuing operations.

    Following the Constitutional reasoning just articulated (and nicely reviewed in the MA AG’s amicus brief), the Supreme Court and the federal agency (NRC) have determined that the remaining regulatory and policy determinations remain with the States. This is elegantly articulated in the VT AG’s reply brief, which reviews the Atomic Energy Act, the Court decisions, and the NRC’s regulatory language to find that there remains a significant role for State jurisdiction.

    As the Supreme Court put it in PG&E: “But as we view the issue, Congress, in passing the 1954 Act and in subsequently amending it, intended that the Federal Government should regulate the radiological safety aspects involved in the construction and operation of a nuclear plant, but that the States retain their traditional responsibility in the field of regulating electrical utilities for determining questions of need, reliability, cost, and other related state concerns.
    Need for new power facilities, their economic feasibility, and rates and services, are areas that have been characteristically governed by the States. ” (p. 205) Underscoring this point, the Court goes on to point out that the role of the States in these matters is long-established (with an exception carved out for what is now FERC), that it has NOT been removed by the AEA, that, Congress did NOT intend to leave a regulatory vacuum, and that therefore “the only reasonable inference is that Congress intended the States to continue to make these judgments.” (p. 208)

    Indeed, they didn’t stop there either, but went on to examine legislative history and text, and the NRC’s own interpretation of its authority, finally concluding “This account indicates that, from the passage of the Atomic Energy Act in 1954, through several revisions, and to the present day, Congress has preserved the dual regulation of [212] nuclear powered electricity generation: the Federal Government maintains complete control of the safety and “nuclear” aspects of energy generation; the States exercise their traditional authority over the need for additional generating capacity, the type of generating facilities to be licensed, land use, ratemaking, and the like.” (pp. 211-212)

    Entergy and Hanna ignore all of this, attempting to turn a dual regulatory scheme into a solo act for the NRC. There is simply no basis in law, or in policy for this. A few points follow.

    First, the remaining significant legal point. Entergy attempts to shoehorn decisions granting FERC sole authority over rates into the PG&E decision, claiming that between nuclear safety and rates, the federal government has covered all the bases. It’s true that the regulation of rates at merchant generating plants like VY is no longer a matter of state authority; indeed, that’s uncontested here. But rates are just ONE of the long list of powers that the Court noted are reserved to the States. More importantly, the Court’s language concerning the powers of the States is meant to exemplify areas that are NOT reserved to the federal government, rather than to list ALL of those that ARE granted to the States. Like the Constitution itself, the Court makes no attempt to articulate State powers, instead leaving to them “the powers not delegated to the United States by the Constitution, nor prohibited by it to the States….” (9th Amendment). The simple fact of the matter is this: from a legal point of view, Entergy has nothing but its own repeatedly rejected view of federal preemption on which to rest its case. In a word, its case is a castle (more of a hovel, really) built in the air.

    Finally, some policy points to address some of Hanna’s arguments. First, she fails to address why it is bad national policy for different regions of the country to make different energy policy choices. The fact is, that’s exactly how things are now. The Pacific Northwest is highly dependent on hydro power, thanks to the efforts of FDR during the depression. The Southeast is heavily dependent on coal and nuclear, while New England depends most on natural gas and older nuclear plants. As a matter of policy, Hanna does not say why Congress should interfere with this distribution of choices, trump local decision-makers, and impose one form of power generation — nuclear — on citizens who no longer want it, especially since it’s quite clear that it’s not now and never has been an economically viable choice, without massive subsidization and support from the federal government and tax code.

    Second, she does not address the regulatory vacuum which would occur if States are unable to regulate and the federal government has made no provision to do so. Let’s take a simple, but telling example. The NRC regulates the decommissioning of nuclear facilities to insure that all radiological aspects of a site are returned to what it considers an “acceptable” level for the general public. (I’ve simplified and subsumed many complex matters in that statement, but they don’t concern us here). But the NRC is completely indifferent to all OTHER aspects of a decommissioned site. Thus, if a nuclear operator chose to remove everything radioactive from the site in compliance with the NRC’s regulations, and then leave a pile of non-radioactive rubble where the plant used to be, the NRC would have nothing to say about that. Nor, according to Entergy and Hanna, would the State, since they’ve eliminated all OTHER governmental regulation. Is that what Hanna considers good energy policy?

    In sum, Hanna presents NO legal arguments to rebut the massive and convincing edifice erected by the Constitution, the Court cases, federal laws and regulations, and State laws and regulations, but simply points the “NIMBY” finger at those making complex, but well-documented arguments. And instead of thoughtful energy policy, she presents us with what would rapidly degenerate into exactly the kind of policy disaster we witnessed at Yucca Mountain, where federal legislators attempted to impose the siting of nuclear waste on a powerless state (a bill known at the time as the “screw Nevada bill”), only to find that the tables had turned twenty-five years and $15 billion later when Nevada’s congressional delegation became more powerful.

    This is no way for a democracy to function: it’s bad law, bad policy and bad politics.

  2. Cheryl Hanna says:

    John, Thanks for your comments and personally, I hope you are right. My intent was simply to raise what I think might be problematic issues for Vermont, not to support or agree with Entergy’s position. My main concern is that Vermonters be prepared for what could be a long battle that ultimately favors federal supremacy. Also we think it is important to raise all sides so that we can generate some richer discussion This is exactly the kind of discussion that we had hoped for when we launched the blog. We will have a much better sense after the hearing on June 23rd of how the case will be framed by the courts. Until then, I look forward to more give and take.

  3. Anonymous says:

    “Thus, the fundamental question the courts will address is whether a state should able to trump the decision of the U.S. Nuclear Regulatory Commission (NRC) to keep a plant operating. I think, in the end, that a court is likely to find that Congress never intended the states to be able to exercise such power.”

    What is your legal basis for this statement? Based on the Supreme Court’s ruling in PGE v. State Energy Resources Conservation & Development Commission this isn’t necessarily true.

  4. Carl Etnier says:

    I appreciated John Greenberg’s detailed analysis and shared his puzzlement over the lack of a legal argument in your post–especially since I know how good you can be at explaining constitutional law. You’ve dazzled me before–would you do it again in future posts on Entergy v. Shumlin?
    I wrote more at http://www.vtcommons.org/content/relocalizing-vermont-weakest-pre-emption-brief-ever