June 27, 2011, Pat Parenteau: State’s Briefing Should Win The Day

As the two-day hearing on Entergy’s request for a preliminary injunction wrapped up Friday, June 24, a few issues remained somewhat in doubt.

First, what effect will Entergy’s not so subtle threat to close the plant if it loses the preliminary injunction have on Judge Murtha’s decision? None, in my estimation. Federal judges are used to having parties predict the end of the world if they do not get their way. Assistant Attorney General Scott Kline is right that Entergy painted itself into this corner. The company could have filed this suit years ago if it really believed the state was acting illegally. It chose the time and place for this fight and it must bear responsibility for the consequences. My guess is Entergy will not throw in the towel if it loses. But whatever happens, it will be Entergy’s decision, not Judge Murtha’s.

Second, while the state did a credible job at the hearing, it did not score a knockout punch, and its theory of the case ran into a skeptical Judge Murtha on its position that the certificate of public good will automatically expire on March 21, 2012, without the need for any further action by either the Vermont Legislature or the state Public Service Board (PSB). Frankly, this is an odd situation. The PSB has an open docket on Entergy’s March 3, 2008, petition to renew the certificate of public good. The evidentiary hearing and briefing have been completed. But the PSB takes the position that Act 160 precludes it from rendering a final decision (the Act states that PSB “may not issue a final order or a certificate of public good until the General Assembly determines that operation will promote the general welfare and grants approval for that operation”). As everyone knows, in February 2010 the Vermont Senate voted 26-4 against recommending that PSB act on Entergy’s petition; however, the bill was not referred to the House and the General Assembly did not take a final vote. A bill seeking another vote was introduced in the 2011 legislative session but it failed to advance.

So, it appears the Legislature will not take up the issue before the March 21, 2012, deadline. The Attorney General takes the position that the Senate vote does not represent final legislative action and is not before the court. Judge Murtha seemed puzzled by this position and asked a number of probing questions of both the Attorney General and Entergy’s lawyer, indicating his belief that the Senate vote was relevant. The Attorney General lawyers stuck to their guns and persisted in arguing that the PSB cannot act without legislative approval, while at the same time arguing that the Legislature has no duty to vote up or down on the approval. Judge Murtha is clearly troubled by this seeming Catch-22. Hard to say how this might affect his ruling on the preliminary injunction motion. Entergy has argued that the PSB is already “tainted” by the legislative acts and can no longer be trusted to render an objective decision. Entergy might, however, like another shot at a vote in the Legislature. It mounted a full-court advertising campaign last winter to drum up support for a re-vote.

Finally, surprising as it may seem, Entergy may have made some headway with “the dog that didn’t bark” argument. The somewhat strained Sherlock Homes metaphor goes like this: If safety is not the reason for shutting down the plant, what is? Entergy argues that there is no plausible reason other than safety and has challenged the state to identify specific, non-preempted reasons to justify closing a plant that it claims is a reliable, cost-effective and carbon-free source of electricity to the region. The state argues, rightly, that the law presumes that the challenged statutes are constitutional and it is Entergy’s burden to prove that they aren’t. On their face, the statutes say nothing about regulating radiation hazards. Entergy bears a heavy burden to prove that the Legislature constructed an elaborate subterfuge to disguise its true intent.

Nevertheless, the Pacific Gas & Electric Co. v. State Energy Resource Comm.,  case does say that the court must satisfy itself that there is a genuine non-radiological rationale for the state’s decision to bar a nuclear power plant. The Attorney General has offered a few examples of regulatory concerns that do not involve radiological health and safety, such as air and water quality issues, but it is not clear that Judge Murtha is entirely satisfied. He has come back to the same questions several times. What does “public safety” mean if it doesn’t mean radiological safety? Isn’t safety a necessary component of reliability? What other grounds exist to support the state’s position?

The two-day hearing last Thursday and Friday barely scratched the surface of the voluminous legislative history dealing with Vermont Yankee and the broader subjects of the state’s energy future—with or without the plant. Undoubtedly, there is much more to be gleaned from a careful examination of these materials. At this point, however, there is nothing more the state can do to beef up the record on these points unless Judge Murtha requests further briefing. At the close of the hearing, he did say he would let the parties know by this week if he wants additional information.

The state’s briefing on all of the issues has been very strong and it should be enough to win the day. But this is no slam dunk. If Judge Murtha does grant some form of preliminary relief, the state will have another chance to make their case at trial, which has been moved up to September 12. The state may need to tie up some loose ends to secure a final victory.