Entergy Corporation's board of directors voted Monday to approve the refueling of Vermont Yankee nuclear power plant.
The refueling, which will cost $92 million, including labor, maintenance, and fuel, is set to begin in October.
A third of the fuel rods, or about 116 assemblies, must be replaced every 18 months. Spent fuel rods are stored at the plant. The refueling this fall will be conducted during a planned outage, and about 1,000 additional workers will be brought in from around the country to complete the work.
Larry Smith, communications manager for Vermont Yankee, likened the activity to an “ant colony on steroids.”
“Employees have been on edge for weeks [about the continued operation of the plant],” Smith said. “Now they can concentrate on making electricity.”
The decision to order fabrication of $50 million in additional uranium fuel, which will last 4.5 years, comes in the wake of Judge J. Garvan Murtha's decision last week to deny Entergy a preliminary injunction to keep Vermont Yankee open while a lawsuit about its long-term future wends its way through the federal court system.
Murtha said Entergy failed to make the case that it would suffer irreparable harm if it had to delay the scheduled October refueling outage while waiting for the case to be resolved. During last month's hearing, Entergy officials said that it needed to decide by July 23 whether to buy the fuel.
The next step in the litigation is a trial on Sept. 12 before Murtha in U.S. District Court in Brattleboro to determine whether Entergy can obtain a permanent injunction and continue operating the 39-year-old plant for 20 more years.
Entergy Corp. has a license from the Nuclear Regulatory Commission to keep the plant open for two more decades. The Louisiana-based company with $11 billion a year in revenues hopes that the court will override state law; Entergy argues that the federal license trumps the state's jurisdiction under a legal precedent known as pre-emption.
Company officials sought the preliminary injunction because they said they didn't want to buy more fuel unless they could use it.
The significant investment in new fuel is an indication that Entergy has surmised from the judge's order that it has a good chance of winning the lawsuit, either on preemption grounds or on the merits of the case.
“Entergy's board of directors carefully reviewed the merits of our case and the arguments put forth by all parties during the recent hearing in District Court when we requested a preliminary injunction against the state of Vermont taking any actions to close Vermont Yankee,” said J. Wayne Leonard, Entergy's chairman and chief executive officer.
“Our board believes both the merits of the company's legal position and the record strongly support its decision to continue to trial scheduled to begin on Sep. 12. On that basis, the decision was made to move forward with the refueling as planned.”
Attorney General Bill Sorrell, who is litigating the case for the state of Vermont, said he expected Entergy to refuel.
“I'm not surprised at all,” he said. “This is just a business decision for them. They were crying wolf at the preliminary hearing. The judge knew they were crying wolf. That's in part why he didn't issue the injunction.”
The next phase of the case will settle the permanent injunction question.
Entergy contends that Vermont overstepped its regulatory bounds with Act 160, a 2006 law that gives the state Legislature veto power over the continued operation of the plant. In two days of testimony, Entergy's legal team stressed that only the Nuclear Regulatory Commission has the authority to regulate nuclear energy.
The state's legal team countered that Entergy had agreed to the terms of Act 160 and was attempting to go back on previous agreements it made with the state.
Murtha refused to act on Entergy's request to invalidate Act 160. However, in his ruling, he indicated that Entergy “had raised serious questions” regarding its claim that Vermont was attempting to preempt federal law. That, he wrote, warrants “further briefing and a prompt full-dress trial on the merits.”
Sorrell said the accelerated trial - “which is moving at warp speed as cases go” - made the preliminary injunction a moot point anyway. With just six weeks to go, Entergy was going to be faced with a decision to refuel then anyway, Sorrell said.
One way or another, though, the attorney general expects the losing party to appeal Murtha's decision to the Second Circuit Federal Appeals Court in New York between late this fall and the March deadline.
Sorrell said the judge made it clear in his decision that he didn't want to tip his hand.
“If he had issued a preliminary injunction, he would have made the decision that Entergy would likely win,” Sorrell said.
Cheryl Hanna, a Vermont Law School professor who has been critical of Act 160 and the merits of the state's case, said Murtha's ruling gave Entergy “some confidence at least in the short term they're likely to prevail.”
“The plant is a long way from being shut down by the state of Vermont,” Hanna said.
Hanna agreed with Sorrell that Entergy's refueling investment is a business decision. If the company hadn't taken action to refuel the plant, it would be caught in limbo, with the facility not operating even though it isn't slated for decommissioning until it is shut down.
“[Entergy] owes its fiduciary duty to shareholders,” Hanna said. “Not refueling the plant posed a greater risk to shareholders than refueling it.”
Hanna said she thinks Murtha is skeptical of Vermont's case, particularly of the reasons behind the legislative acts, but she doesn't agree with some of her colleagues who believe the judge's decision signaled to Entergy that the company was going to win at trial and didn't need the injunction.
“I don't think it's that strong,” Hanna said. “But I think on balance the state's the one fighting a losing battle. It's always a gamble when you talk about litigation, but it looks like to me odds are on Entergy's side at least in the short term.”
The trial, Hanna said, will focus on the merits of the case and federal pre-emption issues.
Murtha suggested in the footnotes of his decision that he has concerns about whether the legislative action was legitimate, according to Hanna.
The key question is: “Can the state convince the judge that there were legitimate reasons for the legislation, other than radioactive harm?”
If Entergy wins on a factual or pre-emption basis and the court grants a permanent injunction, then the state can appeal the case at the Second Circuit Court.
“If the state can't win in front of Murtha, I think they're done, but he hasn't made up his mind,” Hanna said.
Sorrell said he is in it “for the long haul” - all the way to the U.S. Supreme Court, if necessary.
“We know we have a real fight on our hands,” he said.
If Vermont loses at the trial court level, Sorrell says he would be surprised if the state didn't appeal. Likewise, he said, “We'd be surprised if Entergy would pack up and go home.”
Sorrell said there is a lot at stake in the case, including precedents that could be set regarding federal preemption and the legal jurisdiction of oversight of the nuclear industry.