12

- 707

- cv (L)

Entergy Nuclear Vermont Yankee, LLC v. Shumlin

1

UNITED STATES COURT OF APPEALS 2

FOR THE SECOND CIRCUIT 3

4 August Term, 2012 5

6 (Argued: January 14, 2013 Decided: August 14, 2013 ) 7

8

9

Docket No s

. 12

- 707

- cv (L) 12

- 791

- cv (XAP) 10

11

12

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X 13

14

E NTERGY N UCLEAR V ERMONT Y ANKEE

, LLC, E NTERGY N UCLEAR O PERATIONS

, I NC

., 15

16 Plaintiffs

- Appellees

- Cross

-

Appellants

, 17

18

v. 19

20

P ETER S HUMLIN , in his official capacity as Governor of the State of Vermont, W ILLIAM 21

S ORRELL , in his official capacity as Attorney General of the State of Vermont, J AMES V OLZ , in 22 his official capacity as a member of the Vermont Public Service Board, J OHN B URKE , in his 23 official capacity as a member of the Vermont Public Service Board, D AVID C OEN , in his official 24 capacity as a member of the Vermont Public Service Board, 25

26 Defendants

- Appellants

- Cross

- Appellees

. 27

28

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X 29

30

Before: C ARNEY and D RONEY

, Circuit Judges , and G ARDEPHE

, District Judge

. * 31

32

Owner s of nuclear power plant brought action against officials of the State of Vermont, 33 seeking declaratory judgment and permanent injunction that three Vermont statutes are 34 preempted by the Atomic Energy Act, and that Vermont ’s efforts to require a below

- market 35 power purchase agreement is preempted by the F ederal Power Act and violates the dormant 36

Commerce Clause. Following a bench trial, the United States District Court for the District of 37 Vermont (Murtha, J. ) ruled in plaintiffs’ favor on Atomic Energy Act preemption claim and 38

dormant Commerce Clause claim , and found that the Federal Power Act preemption claim was 39

not ripe. We AFFIRM the district court as to the Atomic Energy Act and Federal Power Act 40 preemption claims, and REVERSE the district court as to the dormant Commerce Clause claim

. 41

42 Judge C ARNEY concurs in a separate opinion. 43

44

* The Honorable Paul G. Gardephe, United States District Judge for the Southern District of New York, sitting by
designation.2 K ATHLEEN M. S ULLIVAN , Faith E. Gay,

1
Robert C. Juman, Sanford I. Weisbur s t, 2 William B. Adams, Ellyde Roko, Quinn 3 Emanuel Urquhart & Sullivan, LLP, New 4 York, NY; Marcus V. Brown, Wendy 5 Hickok Robinson, Entergy Services, Inc.

, 6 New Orleans, LA; Timothy A. Ngau, 7 Entergy Services, Inc., Jackson, MS; Robert 8 B. Hemley, Matthew B. Byrne, Gravel and 9 Shea PC, Burlington, VT, for Plaintiffs

- 10 Appellees

- Cross

- Appellants Entergy 11
Nuclear Vermont Yankee, LLC, and Entergy 12 Nuclear Operations, I nc. 13

14

D AVID C. F REDERICK , Scott H. Angstreich, 15 William J. Rinner, Kellogg, Huber, Hansen, 16 Todd, Evans & Figel, P.L.L.C., Washington, 17
D.C.; William H. Sorrell, Attorney General 18
for the State of Vermont, Scot L. Kline, 19 Bridget C. Asay, Kyle H. Landis

- Marinell o, 20 Assistant Attorneys General for the State of 21

Vermont, Montpelier , VT

, for Defendants

- 22 Appellants

- Cross

- Appellees Peter Shumlin, 23

William H. Sorrell, James Volz, John Burke, 24

and David Coen

. 25

26 Martin S. Kaufman, Atlantic Legal 27
Foundation, Larchmont, NY, for amici 28

curiae William Anders, Jerome I. Friedman, 29 Sheldon L. Glashow, Roy J. Glauber, 30 Dudley R. Herschbach, Mujid S. Kazimi, 31 Bahram Nassersharif, Neil E. Todreas, and 32 Richard Wilson in support of Plaintiffs

- 33 Appellees

- Cross

- Appellants

. 34

35
Patricia A. Millett, Ruthanne M. Deutsch 36 James E. Tysse, Akin Gump Strauss Hauer 37 & Feld LLP, Washington, DC; John B. 38 Capehart, Akin Gump Strauss Hauer & Feld 39
LLP, Dallas, TX; Robin S. Conrad, Rachel 40 Brand, National Chamber Litigation Center, 41 Inc., Washington, DC, for amicus cu riae 42 Chamber of Commerce of the United States 43 of America in support of Plaintiffs

- 44 Appellees

- Cross

- Appellants

. 45

463 Caroline S. Earle, Ellis Boxer & Blake,

1 Montpelier, VT, for amicus curiae 2 International Brotherhood of Electrical 3 Workers, Local Union 300 in sup port of 4 Plaintiffs

- Appellees

- Cross

-

Appellants

. 5

6 Peter D. Keisler, Quin M. Sorenson, Joshua 7 J. Fougere, Sidley Austin LLP, Washington, 8 DC; Ellen C. Ginsberg, Nuclear Energy 9
Institute, Inc.

, for amicus curiae Nuclear 10 Energy Institute, Inc. in support of 11

Plai ntiffs

- Appellees

- Cross

-

Appellants

. 12

13 Richard A. Samp, Cory L. Andrews, 14 Washington Legal Foundation, Washington, 15
DC, for amicus curiae Washington Legal 16 Foundation in support of Plaintiffs

- 17 Appellees

- Cross

- Appellants

. 18

19
Sandra Levine, Conservation Law 20 Foundation, Montpelier, VT ; Jared 21 Margolis, New England Coalition, 22
Brattleboro, VT ; Jamey Fidel

, Paul Brierre, 23
Vermont Natural Resources Council, 24 Montpelier, VT ; James Dumont, Vermont 25

Public Interest Resear ch Group, Montpelier, 26

VT, for amici curiae Conserv ation Law 27 Foundation, New England Coalition, 28
Vermont Natural Resources Council, and 29 Vermont Public Interest Research Group in 30 support of Defendants

- Appellants

- Cross

- 31 Appellees

. 32

33
Steven F. Huefner, The Ohio State 34 University, Moritz College of Law, for 35

amicus curiae National Conference of State 36 Legislatures in support of Defendants

- 37 Appellants

- Cross

- Appellees

. 38

39 Eric T. Schneiderman, Attorney General of 40
the State of New York, Barbara D. 41
Underwood, Solicitor General, Monica 42 Wagner, Deputy Bureau Chief

, 43

Environmen tal Protection Bureau, Denise A. 44 Hartman and Andrew B. Ayers, Assistant 45 Solicitors General of Counsel, Albany, NY, 464 for amici curiae States of New York,

1 Connecticut, Iowa, Maryland, 2 Massachusetts, Mississippi, Missouri, New 3 Hampshire, and Utah in support of 4 Defendants

- Appellants

- Cross

-

Appellees

. 5

6

D RONEY

, Circuit Judge : 7

8

Ente rgy Nuclear Vermont Yankee, LLC , and Entergy Nuclear Operations, Inc.

, 9

(collectively, “Entergy”) 1 own and operate the Vermont Yankee Nuclear Power Station 10

(“Vermont Yankee”), a nuclear p ower plant in Vernon, Vermont. Entergy brought suit in the 11

United States District Court for the District of Vermont against the Governor and Attorney 12

General of the State of Vermont and the members of the Vermont Public Service Board in their 13

official capacities (collectively, “Vermont”), and asserted three claims. Count One alleged that 14

three recently enacted Vermont statutes governing Vermont Yankee

– Acts 74, 160, and 189

– 15

concerned issues of radiological safety and thus were pree mpted by the federal Atomic Energy 16

Act. Count Two alleged that Vermont had attempted to condition its grant of permission to 17

operate Vermont Yankee on the execution of a power purchase agreement that favored Vermont 18

retail consumers, and that this attempt was preempted by the Federal Power Act. Count Three 19

asserted that these same actions with respect to the power purchase agreement also violated the 20

dormant Commerce Clause of the United States Constitution . Following a bench trial, the district 21

court (Murt ha, J. ) found in favor of Entergy as to Count One with respect to Acts 74 and 160 and 22

found the challenge to Act 189 to be moot. 2 The district court also found in favor of Entergy as 23

to Count T hree . Lastly, the district court found Count T wo to be premature . We affirm the 24

district court as to Counts One and Two , and reverse the district court as to Count T hree

. 25

26

BACKGROUND 27

28

We summarize here those findings of fact relevant to this appeal that were made by the 29

district court following the bench tria l

. 30

1 Entergy Nuclear Vermont Yankee, LLC, and Entergy Nuclear Operations, Inc., are co

- holders of the Nuclear
Regulatory Commission Facility Operating License No. DPR

- 28 and Renewed Facility Operating License No. DPR

28. They are also indirect subsidiaries of parent Entergy Corporation, a Delaware corporation headquartered in New
Orleans, Louisiana, that owns and operates twelve nuclear reactors in ten locations in the United States.

2 Entergy does not appeal the district court’s determination as to Act 189.5

1

I. The History of Vermont Yankee 2

3

In 1972, Vermont Yankee opened and began operating under the ownership and 4

management of the Vermont Yankee Nuclear Power Corporation (VYNPC), a joint venture of 5

eight New England retail electric utilities

. Among the eight members of the joint venture were 6

t wo Vermont electric companies ( Central Vermont Public Service and Green Mountain Power )

, 7

which owned a collective fi fty

- five percent share of Vermont Yankee. Vermont Yankee had been 8

granted a forty

- year Facility Ope rating License by the Atomic Energy Commission, the federal 9

agency that preceded the Nuclear Regulatory Commission (NRC). The forty

- year license was to 10

expire on March 21, 2012. 11

12

In 1999, VYNPC sought to sell Vermont Yankee. After an initial bid by one firm was 13

rejected by the Vermont Public Service Board (the “Board”), 3 Entergy submitted a bid for 14

Vermont Yankee in the summer of 2001 and sought a “certificate of public good” (CPG), a 15

license from the Board to continue to operate Ve rmont Yankee under Vermont state law

. 4 As it 16

was negotiating with the Board, Entergy entered into a memorandum of understanding (MOU) 17

(the “2002 MOU”) with the Vermont Department of Public Service (the “Department”). 5 The 18

2002 MOU incorporated a power purc hase agreement (PPA) Entergy executed in 2001 (the 19

“2001 PPA”) that promised Vermont retail electric utilities favorable pricing terms for the 20

purchase of power from Vermont Yankee until 2012

. 6 Entergy maintains it agreed to the 2001 21

PPA because it feared that the Department would not otherwise reco mmend a CPG for Vermont 22

Yankee. Entergy also agreed in the 2002 MOU to “waive any claim . . . that federal law preempts 23

the jurisdiction of the Board.” 24

25

3 The Board is a three

- member quasi

- judicial state agency that regulates a variety of public utilities in Vermont, including power facilities. It supervises the utilities’ rates, service quality, and overall financial management. See Vt.

Stat. Ann

. tit. 30, §§ 9, 203.

4 The criteria the Board must consider in deciding whether to issue a CPG relate to such issues as power generation
stability, economic impact on the State, aesthetic and environmental issues, and likelihood of compliance with
federal regulations. See Vt. S tat. Ann. tit. 30, § 248(b).

5 The Department oversees laws relating to public service corporations and represents the State of Vermont in the
procurement of energy in hearings before the Board in an advocacy capacity. See Vt. Stat. Ann. tit. 30, §§ 1, 2, 203.

6 Although VYNPC included retail utilities from outside Vermont, by 2009, Central Vermont Public Service and

Green Mountain Power had accumulated a co mbined stake of 92.5% of VYNPC.6

On June 13, 2002, the Board approved the sale of Vermont Yankee to E ntergy and issued 1

a new CPG. In its Decision and Final Order, the Board stated that the sale of Vermont Yankee to 2

Entergy would “promote the general good” in part because, “under most reasonably foreseeable 3

scenarios, the transactions are highly likely to produce an economic benefit for Vermont 4

rate payers.” In re Vt. Yankee Nuclear Power Corp. , Docket No. 6545, 2002 WL 1997942, at *1 5

(Vt. Pub. Serv. Bd. June 13, 2002). The Order specifically endorsed the 2001 PPA because it 6

allowed Vermont retail utilities to purchase power from Vermont Yankee at prices that “are 7

substantially below the ‘currently committed’ operating costs of Vermont Yankee over the 8

remaining term of its license.” Id. The Order noted that the 2001 PPA also imposed a “cap on the 9

cha rges for Vermont Yankee power.” Id. 10

11

In 2002, Entergy obtained from the Federal Energy Regulatory Commission ( FERC ) 12

authorization to sell power into the interstate market under a market

- based tariff, which remains 13

in effect. The authorization permits Entergy to sell power wholesale through ISO

- New England 14

(“ISO

- NE”), a nonprofit independent system operator under FERC regulation that administers 15

New England’s energy markets. ISO

- NE’s stated responsibilities are to maintain “rel iable power 16

system operations,” ensure “efficient and competitive markets,” and to “administer [the] regional 17

transmission tariff, including comprehen sive regional system planning.” 18

19

II. The Recent Vermont Legislation Concerning Vermont Yankee 20

21

A. Act 74 : The Ver mont Legislation Concerning Increased Nuclear Waste Storage 22

by Vermont Yankee 23

24

In 2003, Entergy petitioned the Board to obtain a twenty

- percent “ uprate

, ” which would 25

allow an increase in Vermont Yankee’s power output and also result in a concomitant increase in 26

nuclear waste. See Entergy Nuclear Vt. Yankee, LLC v. United States , 95 Fed. Cl. 160, 173 27

(2010)

, aff’d in part, rev’d in part sub nom.

, Vt. Yankee Nuclear Power Corp. v. Entergy Nuclear 28

Vt. Yankee, LLC , 683 F.3d 1330 (Fed. Cir. 2012)

. Under a statute enacted in 1977

– f ive years 29

after Vermont Yankee first began operating

– the construction of new nuclear waste storage 30

facilities in Vermont was prohibited unless the Vermont L egislature passed a bill or joint 317

resolution finding that the facilit ies promoted the “general good of the state

. ” Vt. Stat. Ann

. tit

. 1

10, § 6501 (a) . However, two years later, in 1979, the Vermont L egislature enacted an 2

“exemption” provision stating that the requirements imposed by § 6501 d o “not apply to any 3

temporary storage by Vermont Yankee Nuclear Power Corporation of spent nuclear fuel 4

elements or other radioactive waste at its present site

. ” Id. § 6505. 5

6

At the same time that Entergy sought the uprate

, it also enter ed into a new MOU (the 7

“2003 MOU”) with the Department under which Entergy would pay $6 million into new “State 8

Benefits Funds

, ” namely the “Environmental Benefit Fund,” the “Low Income Benefit Fund,” 9

and the “Entergy Fund for Economic Benefit.” See Entergy Nuclear , 95 Fed . Cl. at 1 73

- 74 ; In re 10

Entergy Nuclear Vt. Yankee, LLC , 232 P.U.R.4th 219, 223 (Vt. Pub. Serv. Bd. Mar. 15, 2004)

. 11

The Board then issued a CPG approving the uprate on March 24, 2004. Entergy Nuclear , 95 Fed. 12

Cl. at 188. However, Entergy also needed to obtain approval to construct the new dry cask spent 13

nuclear fuel storage facility , even though it had recently received approval for it from the NRC

. 7 14

Entergy then petitioned the Board

, requesting permission to expand its spent fuel storage facility

. 15

Entergy maintained that the exemption provision of section 6505 applied to the Vermont Yankee 16

site in general, as opposed to a particular owner of the plant

. The Board sought guidance from 17

the Vermont Senate, whi ch, in turn, obtained a letter from the Office of the Vermont Attorney 18

General opining that section 6505 was owner

- specific. See Letter from Michael McShane, Asst. 19

Att’y Gen., to Sen. Peter Welch, Pres. Pro Tempore of the Vt. Senate, 2004 WL 1737093, at *1

- 20

2 (Apr. 30, 2004). Since Vermont Yankee had changed ownership from VYNPC to Entergy , the 21

letter provided that Entergy would need the approval of the Vermont L egislature to add spent 22

fuel storage capacity. Id. at *4. 23

24

In response, Entergy presented prop osed legislation clarifying that section 6505 was site

25

specific, rather than owner

- specific. This proposal failed to obtain support from the Vermont 26

7 Spent fuel rods are typically stored in deep pools of treated water at the reactor site for a period of at least five years. Once the spent fuel rods’ temperature and radiation emissions have sufficiently diminished, they can be
moved into dry casks

– consisting of sealed metal cylinders on a concrete pad

– for long

- term storage. Dry casks are
monitored by the NRC for public health and safety. See 10 C.F.R. § 961.11. at App. E(B)(3); U.S. Nuclear Regulatory Comm’n, Backgrounder on Dry Cask Storage of Spent Nuclear Fuel (Feb. 28, 2013), available at
http://www.nrc.gov/readi ng

- rm/doc

- collections/fact

- sheets/dry

- cask

- storage.html.8

L egislature, however. T he Vermont L egislature then began hearings on the bill that would 1

eventually be come Act 74

. 2

3

Act 74

, which was enacted on June 21, 2005, had two principal effects. First, Entergy 4

would only need to seek a CPG from the Board before constructing storage facilities for new 5

spent nuclear fuel, rather than the Vermont Legislature as had been required by section 6501 (a)

. 6

However, this CPG would remain in effect only until March 21, 2012. T he second effect of Act 7

74 was that after March 21, 2012, the storage of any new spent nuclear fuel in Vermont would 8

require an affirmative vote by the Vermon t Legislature. If no such affirmative vote occurred, 9

storage of nuclear waste generated from operations after March 21, 2012, would not be 10

permitted. Thus, Vermont Yankee would have to shut down. 11

12

The post

- March 21, 2012, shift of responsibility for approving the storage of spent 13

nuclear fuel generated by Vermont Yankee from the Board to the Vermont Legislature had 14

important ramifications

. D ecisions of the Board may be appealed to the Vermont Supreme Court. 15

Vt. Stat. Ann. t it. 30, § 12 . No such review mechanism would exist for the Vermont Legislature’s 16

decision not to approve additional sp ent nuclear fuel storage space. 17

18

Act 74 added three new sections to title 10 of the Vermont Statutes: sections 6521, 6522, 19

and 6523. Section 6521 outline s the Vermont L egislature’s findings, including recognition of the 20

need to develop renewable and environmentally sustainable energy sources in Vermont. Vt. Stat. 21

Ann. tit. 10, § 6521. To support this objective, section 6521 reference s the state’s creation of an 22

“energy efficiency fund . . . to support cost

- effective investments in end

- use energy efficiency 23

resources,” and a statewide energy purchasing pool with a “ related program to accelerate 24

investments in new renewable and combined

- h eat and power projects .” Id. 25

26

Section 6522 restates the requirement that the owners of Vermont Yankee c an not 27

construct new spent fuel storage facilities for the period up to March 21, 2012, unless they obtain 28

a CPG from the Board. Id. § 6522(a). S ection 6522 also mandate s that the Board find that the 29

owners of Vermont Yankee have adequate resources to manage spent fuel and decommission the 30

plant, if necessary , and a plan “to remove all spent fuel from Vermont to a federally certified 319

long

- term storage fac ility in a timely manner

, ” and that the owner s comply with any existing 1

MOUs with the state

. Id. § 6522(b). Lastly, section 6522 state s that any CPG issued by the Board 2

pursuant to Act 74 will apply to spent nuclear fuel generated by Vermont Yankee only until 3

March 21, 2012, which is the “end of the current operating license.” Id. § 6522(c)(2). This 4

pr ovision states that the owner s have no “expectation or entitlement to continued operation of 5

Vermont Yankee following the expiration of its current ope rating license on March 21, 2012

. ” 6

Id. § 6522(c)(5). S ection 6522(c)(4) provide s that Vermont Yankee cann ot store spent nuclear 7

fuel generated after March 21, 2012 , on site , unless the Vermont Legislature enact s legislation 8

granting such permission. In the absence of any other storage options, this would effectively shut 9

down Vermont Yankee. 10

11

Section 6523 8 establishe d a “C lean E nergy D evelopment F und ” (the “Fund”), which 12

Entergy agreed to when it received permission for its uprate

. See Vt. Stat. Ann

. tit. 10, § 13

6523 (a)

. 9 Under section 6523 (a) , the money Entergy had promised to pay into the State Benefits 14

Funds under the 2003 MOU would instead be paid into the Fund

. The Fund’s purpose i s to 15

“promote the development and deployment of cost

- effective and environmentally sustainable 16

electric power and thermal energy or geothermal resources for the long

- term benefit of Vermont 17

consumers.” Id. § 6523(c). Section 6523(d) outline s various types of renewable energy 18

investments that the Fund can undertake, such as energy projects on farms, biofuel production, 19

and thermal energy facility development. Id. § 6523(d). Entergy estimated that its total obligation 20

under section 6523 to the Fund would be $2.5 million per year, or about $15 million ove r th e 21

period from 2005 to 2012. 10 22

23

Act 74 also explicitly incorporates the MOUs , including the 2002 and 2003 MOUs, as 24

well as a new MOU executed o n June 21, 2005 (the “2005 MOU”)

. Vt. Stat. Ann. tit. 10, § 25

6522(b)(4). 11 The 2005 MOU mandated, inter alia , that Entergy locate the spent nuclear fuel 26

8 Section 6523 was subsequently recodified to title 30 of the Vermont Statutes relating to the powers of the Board.

See Vt. Stat. Ann

. tit. 30, § 8015.

9 Entergy is not challenging sect ion 6523 in th e instant appeal.

10 In its subsequent Order, the Board confirmed that Entergy’s total obligation under the 2005 MOU to make payments into the Fund would be $15,625,000 from 2005 to 2012, made in quarterly payments of $625,000. In re
Entergy Nuclear Vt. Yan kee, LLC , 249 P.U.R.4th 1, 2006 WL 1418626, at *21 (Vt. Pub. Serv. Bd. Apr. 26, 2006).

11 The 2005 MOU was not included in the record on appeal, but was introduced below as Plaintiffs’ Trial Exhibit

465 (Document 46

- 19).10

storage pad at least one hundred feet from a floodplain, space the storage casks to permit access 1

to individual casks “to the greatest extent possible,” configure the spent

- fuel pool so that high

2

decay heat assemblies are surrounded by low

- decay heat assemblies, perform temperature 3

monitoring and monthly manual radiation surveillance of the storage casks and report the results 4

to the Department

, not store waste generated outside Vermont on site, remove “high level” spen t 5

nuclear fuel from Vermont “as quickly as possible,” and conduct a study addressing the stability 6

of the proposed new spent nuclear fuel storage facility based upon a stated concern that an 7

adjacent river bank might erode and collapse

. See 2005 MOU at 1

- 2; s ee also Entergy Nuclear 8

Vt. Yankee , 95 Fed. Cl. at 179 ; In re Entergy Nuclear Vt. Yankee, LLC , 249 P.U.R.4th 1, 2006 9

WL 1418626, at *48 (Vt. Pub. Serv. Bd. Apr. 26, 2006)

. 12 T his “flood analysis” was more 10

extensive than that required by t he NRC’s licensing process for the same spent nuclear fuel 11

storage facility and , although Entergy believed that the Board’s concerns regarding the 12

probability of a collapse were “not credible,” Entergy agreed to undertake the study. In re 13

Entergy Nuclear Vt. Yankee, LLC , 2006 WL 1418626, at *28, *51. As with the earlier MOUs, 14

Entergy agreed to waive any federal preemption claim concerning the 2005 MOU. 2005 MOU at 15

3. 16

17

On June 22, 2005, the day after Act 74 went into effect, Entergy filed a petition with t he 18

Board seeking to construct a dry fuel storage facility at Vermont Yankee, which , as mentioned, 19

the NRC had already pre

- licensed. In re Entergy Nuclear Vt. Yankee, LLC , 2006 WL 1418626 , at 20

*6 . In the subsequent eight months, the Board held a series of public meetings and conducted 21

technical hearings to evaluate the petition. Id. at *6

- 7. The Board also received public comments, 22

of which the “vast majority

. . . highlighted public concerns about the public uprate that [the 23

Board has ] previously approved, and the desire for an independent safety assessment, general 24

nuclear safety concerns, and Vermont Yankee as a terrorist target.” Id. at *9. In addition, most of 25

those who attended the Board’s public meetings “opposed the proposed dry fuel storage facility ” 26

for reasons relating to the facility’s “vulnerability to natural or manmade disasters,” the adequacy 27

of dry fuel storage technology, and the potential for environmental harm. Id. at *9

- 10. On April 28

26, 2006, the Board issued an Order granting the petitio n until 2012, and issuing a new CPG for 29

12 The Board imposed the flood analys is requirement in part in response to the U.S. Department of Energy’s “failure to remove the spent nuclear fuel [generated by Vermont Yankee] in a timely fashion.” Entergy Nuclear Vt. Yankee

, 95 Fed. Cl. at 179

- 80.11

the construction of the storage facility. Id. at *1. The Board stated that the “most significant 1

factor” in its decision was the “economic benefit of the facility.” Id. at *5. Noting that Vermont 2

Yankee “now provides approximately one

- third of the power consumed by the state of 3

Vermont,” 13 an early shutdown of the plant due to the absence of spent nuclear fuel storage 4

facilities would “impose substantial costs on Vermont ratepayers.” Id. “ Without the favorably

5

priced p ower from Vermont Yankee, Vermont utilities would need to purchase replacement 6

power from sources that are presently expected to be more expensive over this period. Approval 7

of the dry fuel storage facility provides a direct economic benefit to the state b y preserving the 8

power. ” Id. The Board estimated the likely savings to Vermont ratepayers arising from the 2001 9

PPA, under which Vermont Yankee power “has been sold to Vermont utilities at prices 10

consistently below the spot

- market price of energy in New England,” at “approximately $61 11

million over the period from 2008 to 2012.” Id. at *21. 12

13

B. Act 160 : The Vermont Legi slation Requiring State Legislative Approval To 14

Operate Vermont Yankee After 2012 15

16

On January 25, 2006, Entergy applied to the NRC for a renewal license to operate 17

Vermont Yankee through March 21, 2032. One week later, on February 1, 2006, the Vermont 18

Legislature began considering the bill that would eventually become Act 160. Act 160 was 19

passed on May 18, 2006, and provide s that “a nuclear energy generating plant may be operated 20

in Vermont only with the explicit approval of the General Assembly.” Act 160, § 1(a). 14 21

22

Act 160 provide s that, in deciding whether to approve operation of a nuclear power plant, 23

the Vermont Legislature should consider “the state’s need for power, the economics and 24

environmental im pacts of long

- term storage of nuclear waste, and choice of power sources 25

among various alternatives.” Id. The preamble state s that Act 160’s general purpose i s to provide 26

the Vermont L egislature with the authority to determine whether to issue a new CPG fo r 27

Vermont Yankee after March 21, 2012. Id. § 1(c). Act 160 would also help foster a “larger 28

13 This, in turn, represents fifty

- five pe rcent of Vermont Yankee’s total power output. The remainder is sold on the

wholesale market to retail utilities in other states. See In re Proposed Sale of Vt. Yankee Nuclear Power Station , 829

A.2d 1284, 1285 (Vt. 2003); In re Entergy Nuclear Vt. Yankee, LLC , 2006 WL 1418626, at *12.

14 The preamble to Act 160 was not published in the Vermont Statutes, but is contained in West’s historical notes to
Chapter 157 of title 10, Vermont Statutes Annotated (West 2011).12

societal discussion of broader economic and environmental issues relating to the operation of a 1

nuclear facility in the state, including an assessment of the potential need for the operation of the 2

facility and its economic benefits, risks, and costs,” and of alternative methods of power 3

generation as well. Id. § 1(d). Act 160 also include s a stated purpose of ensuring that the 4

evaluation of new CPGs be conducted under new cost

- benefit assumptions and analyses, rather 5

than those that supported the previous CPG. Id. § 1(e). 6

7

Act 160 adds three new sections to title 30 of the Vermont Statutes: section s 248(e)(2), 8

248(m), and 254. Section 248(e)(2) require s that the Vermont L egislature approve an extension 9

of the Vermont Yankee operating lease before the Board issue s a new CPG. See Vt. Stat. Ann

. 10

tit. 30, § 248(e)(2). L egislative approval for continued operation of Vermont Yankee is no longer 11

limited to issues concerning spent fuel storage, as under section 6522(c)(4) of Act 74 ; rather, Act 12

160 require s that the Vermont Legislature approve all aspects of the continued operation of 13

Vermont Yankee. Section 248(m) require s that the Board “evaluate the application [for a new 14

CPG] under current assumptions and analyses” and not apply “an extension of the cost benef it 15

assumptions and analyses forming the basis of the previous certificate of public good for the 16

operation of the facility.” Id. § 248( m). Lastly, section 254 require s that the owners of Vermont 17

Yankee apply for a new CPG at least four years prior to the e xpiration of the current CPG, and 18

that the Board inform the Vermont L egislature of the receipt of any new CPG application. Id. § 19

254(a)(1)

- (2). When any new CPG application is submitted , the Department is directed to engage 20

in fact

- finding with three stated objectives in mind: 21

22

(A) to facilitate public discussion of long

- term economic and environmental issues relating to the 23

operation of any nuclear facility in the state; 24

(B) to identify and assess the potential need for the operation of the facility and its long

- term 25

economic and environmental benefits, risks, and costs; and 26

(C) to assess all practical alternatives to those set forth in the applicant’s petition that may be 27

more cost

- effective or that otherwise may better promote the general welfare. 28

29

Id. § 254(b) (1). 30

3113

Section 254 also require s that the Department collect information relating to Entergy’s 1

“funding plans for guardianship of nuclear waste after licensure but before removal of nuclear 2

waste from the site,” plant closure procedures, and funding for eme rgency management systems. 3

O ne subsection of section 254 require s the Department to “identify, collect information on, and 4

provide analysis of long

- term environmental, economic, and public health issues, including 5

issues relating to dry cask storage of nuc lear waste and decommissioning options.” Id. § 6

254(b)(2) (B). The Department is further directed to report its findings to the Board and to the 7

Vermont Legislature. Id. § 254(a)(2 )

- ( 3). The Board , in turn, is directed to consider the findings 8

of the Department in assessing an application for a new CPG. Id. § 254(c). 9

10

C. Act 189 : The Vermont Legislation Requiring State Inspections of Vermont 11

Yankee 12

13

On June 5, 2008, then

- Vermont Governor Jim Douglas signed into la w Act 189, en titled 14

“An Act Relating to a Comprehensive Vertical Audit and Reliability Assessment of the Vermont 15

Yankee Nuclear Facility.” The purpose of Act 189 wa s to assist the Vermont Legislature in 16

making its determination as to whether Vermont Yankee should be permitted to operate past 17

2012, and to reconfirm the “obligation and authority of the general assembly to examine the 18

reliability of the nuclear power station of Entergy Nuclear Vermont Yankee

. ” Act 189, § 1(a)

. 15 19

Act 189 further provide s that, because Entergy was applying to extend the life of Vermont 20

Yankee beyond its original forty

- year desig n, the Vermont L egislature need ed to assess any 21

“reliability issues associated with operating [ Entergy ] for an additional 20 years after its 22

scheduled clo sure in 2012.” Id. § 1(b). Act 189’s text also addresses concerns relating to the 23

operating reliability of Vermont Yankee and issues relating to its performance that might arise 24

from expanding the plant. Id. § 2. 25

26

Act 189 call s for Department inspections of Vermont Yankee ’s operations , such as its 27

electrical, emergency, and mechanical system s

. I d. §§ 3(a) , 5(a)

. The Act also set s out 28

documentation requirements and inquiries that must be undertaken by the Department relating to 29

15 Though the original bill called for Act 189 to be codified as an addition to section 254 of title 30 of the Vermont

Statutes, the final version of Act 189 was not codified. Entergy Nuclear Vt. Yankee, LLC v. Shumlin , 838 F. Supp.

2d 183, 213 (D. Vt. 2012).14

the installation, maintenance , and inspection of safety systems in Vermont Yankee. Id. § 4. To 1

maximize the public visibility of the se inspections o f Vermont Yankee, Act 189 creates a n 2

oversight panel consisting of experts in nuclear power appointed by the governor and the 3

Vermont L eg islature. Id. § 6. The panel’s findings and evaluation of Vermont Yankee were to be 4

reported to the Vermont L egislature, which would use this information to determine whether to 5

extend the operating license for the plant beyond March 21, 2012. Id. § 6(d). 6

7

D. S.289 : The Vermont Senate Bill That Would Have Permitted the Continued 8

Operation of Vermont Yankee Beyond 2012

, as Required by Act 160 9

10

On January 7, 2010, Entergy disclosed a leak of tritium, a decay product of nuclear 11

energy, emanating from Vermont Yank ee. Entergy stopped the leak and remediated its impact on 12

the surrounding soil, and after a subsequent investigation, the NRC concluded that the “public’s 13

health and safety and the off

- site environment were not adversely affected.” A report by a n 14

independe nt consulting group retained by the State of Vermont concluded, on April 30, 2010, 15

that the leak did not affect the reliability of Vermont Yankee. 16

17

At the time of the leak, the Vermont Senate was considering S.289, which was originally 18

titled, “An Act Rela ting to Approval for Continued Operation of the Vermont Yankee Nuclear 19

Power Station.” S.289, if passed, would have authorized the operation of Vermont Yankee for an 20

additional twenty years past March 21, 2012 , as required by Act 160 . Although the NRC gran ted 21

a twenty

- year renewal for the operation of Vermont Yankee on March 21, 2011, S.289 failed to 22

pass in the Vermont Senate. As a result, Vermont Yankee has not been granted permission by the 23

Vermont L egislature to operate past March 21, 2012. 24

25

* * * 26

27

Collectively, under Acts 74 and 160

, a nd due to the failure to pass S.289, the operation of 28

Vermont Yankee after March 21, 2012, depend s upon the Vermont Legislature approving the 29

power plant’s continued operation. As the Vermont Legislature has failed to act, Vermont 3015

Yankee’s CPG expired on March 21, 2012, and the plant would have been forced to shut down 1

absent the d istrict court’s decision below. 2

3

In making its determination whether to permit further operation

, the Vermont Legislature 4

is required by Acts 74 and 160 to consider the impact of the local storage of spent nuclear fuel on 5

the local economy and environment

, and on the diversity of power sources available to Vermont 6

retail utilities

. Under the two Acts, t he Vermont Legislature must also consider the following in 7

determining whether to allow Vermont Yankee to continue operating : (1) the “public health” 8

implications related to dry cask storage of nuclear waste and decommissioning of the plant ; (2) 9

Entergy’s resources for emergency management systems

, management of spent nuclear fuel 10

storage, and decommissioning of the plant; (3) Entergy’s planning for the removal of nuclear 11

waste; and (4) Entergy’s long

- term plan for the closure of Vermont Yankee

. 12

13

In addition, Acts 74 and 160 require that Entergy co mply with the 2002, 2003, and 2005 14

MOUs

. Those MOUs impose, inter alia , the following additional requirements on Entergy , apart 15

from making payments into a fund used to promote alternative energy sources : ( 1 ) analysis of the 16

operational safety of Vermont Yankee in the event of flooding in excess of federal licensing 17

requirements ; ( 2 ) compliance with specific requirements for the construction and monitoring of 18

spent nuclear fuel casks ; ( 3 ) monitor ing of the temperature and radiation of the storage casks and 19

regular reporting to the Department ; ( 4 ) no storage of any nuclear waste generated outside of 20

Vermont; ( 5 ) remov al of the nuclear waste generated by Vermont Yankee from the state as 21

quickly as possible ; and ( 6 ) waive r of any federal preemption challenge to the Board’s authority 22

to regulate the plant. Lastly, the MOUs require that Entergy comply with the 2001 PPA under 23

which Vermont retail utilities must receive favorable pricing terms for the power produced by 24

Vermont Yan kee relative to retail utilities in other states. 25

26

III. Proceedings Before the District Court 27

28

On April 18, 2011, Entergy brought suit in the United States District Court for the 29

District of Vermont against the Governor and Attorney General of the State of Ver mont and the 30

members of the Vermont Public Service Board. The complaint sets forth three claims: 3116

Count One: Entergy sought a permanent injunction and declaration that Act 74, Act 160, 1

and Act 189 are invalid under the Supremacy Clause of the United States Constitution 2

because they are preempted by the Atomic Energy Act. Entergy Nuclear Vt. Yankee, LLC v. 3

Shumlin , 838 F. Supp. 2d 183 , 188

- 89 (D. Vt. 2012)

. 4

Count Two: Entergy sought a permanent injunction and declaration that the Federal Power 5

Act preempts the State of Vermont from conditioning Vermont Yankee’s continued 6

operation on the existence of a power purchase agreement between Vermont Yankee and 7

Vermont’s retai l utilities

, because FERC has exclusive jurisdiction over the regulation of 8

power transmi ssion and sale. Id. at 189. 9

Count Three: Entergy sought a permanent injunction and declaration that Vermont may not 10

condition continued operation of Vermont Yankee on the existence of a power purchase 11

agreement

, because doing so places substantial burdens on interstate commerce, in violation 12

of the d ormant Commerce Clause. Id. 13

14

On January 19, 2012, the district court issued its opinion following a bench trial. The 15

court first concluded that the Atomic Energy Act facially preempt s Act 160, which

, through the 16

operation of section 248(e)(2), effectively allows the Vermont L egislature to “deny a pending 17

renewal petition by taking no action on the petition, for any r eason, procedural or substantive, 18

stated or unstated, permissible or impermissible under federal law.” Entergy Nuclear , 838 F. 19

Supp. 2d at 227 . The court also pointed to section 254(b)(2)(B), which calls upon the Department 20

to support the Vermont Legislature’s fact

- finding by conduct ing studies on, inter alia , “long

21

term environmental, economic, and public health issues, including issues relating to dry cask 22

storage of nuclear waste and decommissioning options.” Id. at 227

- 28. In light of the statu te’s 23

required consideration of “public health issues,” which a re not defined elsewhere in the statute, 24

the court then examined the actual legislative purpose leading to the passage of Act 160. Id. 25

Finding the stated legislative policy and purposes offered by Vermont for Act 160 to be 26

unpersuasive, the court conducted a n extensive review of the act’s legislative history, including 27

statements made by legislators and state regulators during both committee hearings and on the 28

floor. See id. at 229

- 31. On the ba sis of this review, the court held that there was “overwhelming 29

evidence in the legislative record that Act 160 was grounded in radiological safety concerns and 30

the concomitant desire to empower the legislature to act on those concerns in deciding the 3117

ques tion of Vermont Yankee’s continued operation.” Id. at 230. The court concluded that Act 1

160 was thus preempted on its face by the Atomic Energy Act under the standards articulated by 2

the Supreme Court in Pacific Gas & Elec tric Co. v. State Energy Res ources Conservation & 3

Dev elopment Commissio n , 461 U.S. 190 (1983) (“ Pacific Gas ”). 4

5

The district court performed the same analysis o f Act 74

. The court reasoned that by not 6

permitting Entergy to store spent nuclear fuel generated after March 21, 2012, in Vermont, 7

“absent affirmative action by the General Assembly,” section 6522(c)(4) effectively “permits the 8

General Assembly to fail to act on a pending petition to store spent fuel for radiological safety 9

reasons, in a manner that evades review.” Entergy Nu clear , 838 F. Supp. 2d at 231. The court 10

conducted a n other extensive analysis of the legislative history behind Act 74 , and determined 11

that Act 74 was “enacted with radiological safety purposes in mind,” and that by “g iving the 12

General Assembly the unrevie wable power to prohibit storage of fuel, and therefore to prohibit 13

continued operation for preempted radiological safety reasons ,” Act 74 was facially preempted 14

under the Atomic Energy Act. Id. at 232

- 33. 15

16

As to Entergy’s preemption challenge to the PPA u nder the Federal Power Act, the 17

district court considered the scope of FERC authority under the Act and the “filed

- rate doctrine,” 18

which holds that “state courts and regulatory agencies are preempted by federal law from 19

requiring the payment of rates other than the federal filed rate.” Id. at 233

- 34. The district court 20

noted that Vermont Yankee has been operating under a market

- based tariff filed with FERC, 21

which only require s that the seller of power “enter into freely negotiated contracts with 22

purchasers,” as opposed to setting a prescribed rate. Id. at 234 (quoting Morgan Stanley Capital 23

Grp., Inc. v. Pub. Util. Dist. No. 1 of Snohomish Cnty. , 554 U .S. 527, 537 (2008) (emphasis in 24

Entergy Nuclear ) (internal quotation marks omitted) ). The court then held that even if Entergy 25

were to be forced to enter into a new PPA in violation of the market

- based tariff, its recourse 26

would be to have the agreement r eviewed by FERC. Id. at 235. However, the court concluded 27

that “it is not clear what preempt ive effect the [Federal Power Act] has to prevent [Vermont] 28

from refusing to consider continued operation without such an agreement,” as there would be no 29

such agre ement to review. Id. The court thus declined to enjoin the defendants on the basis of 30

Entergy’s Federal Power Act claim. 3118

1

Lastly, the district court found merit in Entergy’s claim that Vermont had conditioned 2

“approval of a CPG for continued operation on the existence of a power purchase agreement at 3

below

- wholesale market rates” in violation of the dormant Commerce Clause. Id. at 235. The 4

court concluded that an injunction was an appropriate remedy in this case, even though no new 5

PPA past March 21, 2012, had yet been issued, because there was “evidence of intent to 6

condition continued operation on the demonstration of some marked ‘economic benefit,’ . . . in 7

the form of below

- wholesale

- market long

- term power purchase agreements for Vermont 8

utilities.” Id. at 236. The court made this finding by examining the materials submitted and 9

testimony of the representatives of the Department in proceedings before the Board, as well as 10

the statements of state legislators, to find impermissible intent on the part of th e defendants. Id. 11

at 236

- 39. On this basis, the court issued an injunction “enjoin [ ing ] D efendants from 12

conditioning Vermont Yankee’s continued operation on the existence of a below

- market PPA 13

with Vermont utilities.” Id. at 239. 14

15

In sum , the district cou rt permanently enjoined Vermont from taking any action to shut 16

down Vermont Yankee after March 21, 2012, pursuant to Act 160 or pursuant to section 17

6522(c)(4) of title 10, as enacted in Act 74. Id. at 243. It also permanently enjoined Vermont 18

from conditioning the issuance of a CPG on the execution of a favorable power purchase 19

agreement. Id. After the district court rendered its decision, Vermont suggested in a statement 20

dated February 2 2 , 2012, that it sti ll had authority over Vermont Yankee’s storage of spent 21

nuclear fuel pursuant to section 6522(c)(2) of title 10 of the Vermont Statutes. ECF No. 19 2

. On 22

March 19, 2012, t he district court entered an injunction enjoining Vermont from seeking to shut 23

down Ve rmont Yankee on the basis of this statute as well. ECF No. 209

. 24

25

Vermont appeals the district court’s determinations with respect to Entergy’s challenges 26

to Acts 74 and 160 under the Atomic Energy Act and Entergy’s claim under the dormant 27

Commerce Clause. Entergy cross

- appeals the district court’s determination that its preemption 28

challen ge under the Federal Power Act i s premature. Neither party appeals the district court’s 29

determination that the challenge to Act 189 is moot because the safety assessments mandated by 30

Act 189 had been completed by the time of trial. 3119

1

DISCUSSION 2

3

I. Standard of Review 4

5

“We review de novo a district court’s application of preemption principles.” N.Y. SMSA 6

Ltd. P’ship v. Town of Clarkstown , 612 F.3d 97, 103 (2d Cir. 2010) (per curiam). “Findings of 7

fact in a bench trial are reviewed for clear error; application of law to those facts is reviewed de 8

novo .” Goodspeed Airport LLC v. E. Haddam Inland Wetlands & Watercourses Comm’n , 634 9

F.3d 206, 209 n.3 (2d Cir. 2011)

. 10

11

A district court’s grant of a permanent injunction is reviewed for abuse of discretion. 12

ACORN v. United States , 618 F.3d 125, 133 (2d Cir. 2010). “A district court abuses its discretion 13

‘when (1) its decision rests on an error of law (such as application of the wrong legal principle) 14

or a clearly erroneous factual finding, or (2) its decision

– though not necessarily the product of a 15

legal error or a clearly erroneous factual finding

– cannot be located within the range of 16

permiss ible decisions.’” Id. (quoting Kickham Hanley P.C. v. Kodak Ret. Income Plan , 558 F.3d 17

204, 209 (2d Cir. 2009)). 18

19

II. Analysis 20

21

A. Atomic Energy Act Preemption Claim 22

23

A(1). Preemption Principles 24

25

T he Supremacy Clause of the United States Constitution provide s that federal law “shall 26

be the supreme Law of the Land.” U.S. Const. art. VI, cl. 2. In determining whether preemption 27

exists, we must “start with the assumption that the historic police powers of the States were not 28

to be superseded by the Federal Act un less that was the clear and manifest purpose of Congress.” 29

Wyeth v. Levine , 555 U.S. 555, 565 (2009) (internal quotation marks omitted). “ This assu mption 30

provides assurance that the federal

- state balance will not be disturbed unintentionally by 3120

Congress or unnecessarily by the courts .” Jones v. Rath Packing Co. , 430 U.S. 519, 525 (1977) 1

(internal citation and quotation marks omitted). “[O]ur task is to ascertain Congress’ intent in 2

enacting the federal statute at issue.” Shaw v. Delta Air Lines, Inc. , 463 U .S. 85, 95 (1983). “The 3

purpose of Congress is the ultimate touchstone.” Allis

- Chalmers Corp. v. Lueck , 471 U.S. 202, 4

208 (1985) ( internal quotation marks omitted). 5

6

There are several forms of preemption. “The most obvious is where Congress expressly 7

stat es that it is preempting state authority.” Cnty. of Suffolk v. Long Island Lighting Co. , 728 F.2d 8

52, 57 (2d Cir. 1984) (citing Jones

, 430 U.S. at 525). Preemption may also occur “where 9

compliance with both federal and state regulations is a physical impossibility,” Fla. Lime & 10

Avocado Growers, Inc. v. Paul , 373 U.S. 132, 14 2

- 4 3 (1963), or where state law impedes the 11

“execution of the full purposes and objectives of Congress.” Hines v. Davidowitz , 312 U.S. 52, 12

67 (1941). In the absence of such explicit or functionally overt preemption, “Congress’ intent to 13

supersede state law may be found from ‘a scheme of federal regulation . . . so pervasive as to 14

make reasonable the inference that Congress left no room for the States to supplement it.’” Cnty. 15

of Suffolk , 728 F.2d at 57 (quoting Rice v. Santa Fe Elevator Corp. , 331 U.S. 218, 230 (1947) )

. 16

In this latter context, “federal law occupies an entire field of regulation.” Wachovia Bank, N.A. v. 17

Burke , 414 F.3d 305, 313 (2d Cir. 2005). 18

19

A(2). The Atomic Energy Act and Pacific Gas 20

21

The domestic nuclear power industry had its genesis in the Atomic Energy Act of 1946, 22

in which Congress “contemplated that the development of nuclear power would be a 23

Government monopoly.” Duke Power Co. v. Carolina Envtl. Study Grp., Inc. , 438 U.S. 59, 63 24

(1978). This view changed with the passage of the Atomic Energy Act of 1954, 42 U.S.C. §§ 25

2011

- 2281, which “ stemmed from Congress ’ belief that the national interest would be served if 26

the Government encouraged the private sector to develop atomic energy for peaceful purposes 27

under a program of federal regulation and licensing .” En glish v. Gen. Elec tric Co. , 496 U.S. 72, 28

80

- 81 (1990). “ The Act implemented this policy decision by providing for licensing of private 29

construction, ownership, and operation of commercial nuclear power reactors.” Pac ific Gas , 461 30

U.S. at 207. The Atomic Energy Commission, the predecessor to the present

- day NRC, “was 3121

given exclusive jurisdiction to license the transfer, delivery, receipt, acquisition, possession and 1

use of nuclear materials. Upon these subjects, no role was left for the st ates.” Id. (internal 2

citations omitted) . “ Congress ’ decision to prohibit the states from regulating the safety aspects of 3

nuclear development was premised on its belief that the [Atomic Energy] Commission was more 4

qualified to determine what type of safety standards should be enacted in this complex area. ” 5

Silkwood v. Kerr

- McGee Corp. , 464 U.S. 238, 2 50 (1984)

. Indeed, the congressional findings 6

supporting the Atomic Energy Act affirm that the “processing and utilization of source, 7

byproduct, and special nu clear material must be regulated in the national interest,” and that the 8

regulation of such materials “by the United States . . . is necessary in the national interest to 9

assure the common defense and security and to protect the health and safety of the pu blic.” 42 10

U.S.C. § 2012(c )

- ( e). R adiological safety therefore represents an arena of field preemption that 11

“ Congress, acting within its proper authority, has determined must be regulated by its exclusive 12

governance ,” thus precluding any regulation by the states. Arizona v. United States , 132 S. Ct. 13

2492, 2501 (2012); see also Skull Valley Band of Goshute Indians v. Nielson , 376 F.3d 1223, 14

1242 (10th Cir. 2004) (“[S]tate laws within ‘the entire field of nuclear safet y concerns’ are 15

preempted, even if they do not directly conflict with federal law.” (quoting Pacific Gas , 461 U.S. 16

at 212)). 17

18

Nonetheless, “[t]here is little doubt that under the Atomic Energy Act of 1954, state 19

public utility commissions or similar bodies are empowered to make the initial decision 20

regarding the need for power.” Vt. Yankee Nuclear Power Corp. v. Nat ural Res. Def. Council, 21

Inc. , 435 U.S. 519, 550 (1978). T he Atomic Energy Act also contains two savings clauses 22

reserving certain regulatory powers not related to nuclear safety to the states. The first clause 23

states that the Atomic Energy Act does not limit state authority regarding regulation of the 24

“ generation, sale, or transmission of electric power produced through the use of nu clear facilities 25

licensed by the Commission .” 42 U.S.C. § 2018 . The second clause provides that the Atomic 26

Energy Act shall not “ be construed to affect the authority of any State or local agency to regulate 27

activities for purposes other than protection aga inst radiation hazards.” Id. § 2021(k). 28

29

It was against this background that the Supreme Court issued its 1983 decision in Pacific 30

Gas

, which concerned whether the Atomic Energy Act preempted a California state statute, the 3122

Warren

- Alquist State Energy Resources Conservation and Development Act (the “Warren

1

Alquist Act”). 461 U.S. at 197. Under the Warren

- Alquist Act, a utility seeking to build a new 2

nuclear power plant in California was first required to obtain permission from the Californ ia 3

State Energy Resources and Conservation Commission (the “ State Energy Commission”). Id. 4

S ection 25524.2 of the Warren

- Alquist Act imposed a moratorium on the construction of new 5

power plants until the State Energy Commission determined that a viable lon g

- term spent 6

nuclear fuel disposal method had been developed. Id. at 197

- 98. The State Energy Commission 7

was also required to report this determination to the California L egislature, which could override 8

it. Id. at 198. The Supreme Court noted that laws similar to the Warren

- Alquist Act had been 9

enacted in response to two emerging societal concerns about nuclear waste management: 10

11

[F]irst, if not properly stored, nuclear wastes might leak and endanger both the environment and 12

human health; second, the lac k of a long

- term disposal option increases the risk that the 13

insufficiency of interim storage space for spent fuel will lead to reactor

- shutdowns, rendering 14

nuclear energy an unpredictable and uneconomical adventure. 15

16

Id. at 196

- 97. 16 17

18

The Court then considered whether the Warren

- Alquist Act was preempted because “it 19

regulates construction of nuclear plants and because it is allegedly predicated on safety 20

concerns.” Id. at 204. The Court reviewed the legislative history of the Atomic Energy Act and 21

concluded that while the “federal government maintains complete control of the safety and 22

‘nuclear’ aspects of energy generation,” “the states exercise their traditional authority over the 23

need for addit ional generating capacity, the type of generating facilities to be licensed, land use, 24

ratemaking, and the like.” Id. at 211

- 12 . Examples of sole federal authority include the 25

“construction and operation of any production or utilization facility,” and the disposal of 26

“byproduct, source or special nuclear material . . . because of the hazard s or potential hazards 27

thereof.” Id. at 209 (quoting 42 U.S.C. § 2021(c)). However , states retain authority over “the 28

16 The Court also considered a challenge to section 25524.1(b), which required the State Energy Commission to

determine on a case

- by

- case basis whether there would be “adequate capacity” for the short

- term storage of spent
nuclear fuel before granting certif ication for the construction of a new plant. Pacific Gas , 461 U.S. at 197

. The Court
determined that the challenge to section 25524.1(b) was not ripe for review because, under the case

- by

- case methodology required by the statute, the Court could not “know whether the [State] Energy Commission will ever find a nuclear plant’s storage capacity to be inadequate.” Id. at 203 (internal quotation marks omitted).23

economic question [of] whether a particular plant sh ould be built”; indeed, “utility financial 1

qualifications are only of concern to the NRC if related to public health and safety.” Id. at 207. 2

Examples of exclusive state authority therefore include “ratemaking and plant

- need questions.” 3

Id. at 208. 4

5

The C ourt then examined the purposes underlying section 25524.2, emphasizing that a 6

state statute that seeks to “regulate the construction or operation of a nuclear power plant . . . even 7

if enacted out of non

- safety concerns, would nevertheless directly conflict with the NRC’s 8

exclusive authority over plan t construction and operation .” Id. at 212. T he Court focused on the 9

state legislative committee report that accompanied section 25524.2, which articulated a purely 10

economic rationale for the bill. T he committee report noted that in the absence of “a federally 11

approved method of waste disposal,” a “‘clog’ in the nuclear fuel cycle” would emerge because 12

“[s]torage space was limited while more nuclear wastes w ere continuously produced.” Id. at 213. 13

This scenario could lead to “unpredictably high costs to contain the problem or, worse, 14

shutdowns in reactors.” Id. at 213

- 14. Because section 25524.2 was “concerned not with the 15

adequacy of the method [of spent nucl ear fuel storage], but rather its existence,” the Court 16

concluded that it was not preempted by the Atomic Energy Act. Id. at 214 (quoting Pac. Legal 17

Found. v. State Energy Res. Conservation & Dev. Comm’n , 659 F.2d 903, 925 (9th Cir. 1981)). 18

19

A(3). The Evolution of the Wholesale Energy Market After Pacific Gas 20

21

Critical to appreciating the Supreme Court’s concern in Pacific Gas about the prospect of 22

state responsibility for rising nuclear energy costs is an understanding of the structure of the 23

retail e nergy market in the 1970s and 1980s. In that era, electric utilities were typically vertically 24

integrated entities that sold the power they generated directly to in

- state retail consumers. State 25

regulatory agencies would focus on the “retail rates charged directly to the public.” Pub. Util. 26

Dist. No. 1 of Snohomish Cnty. Wash. v. FERC , 471 F.3d 1053, 1062 (9th Cir. 2006) (“ PUD No. 27

1 ”), vacated on other grounds , 547 F.3d 10 81 (9th Cir. 2008). These state agencies would 28

determine the rates at which power could be sold by the electric utility to ensure that such rates 29

were reasonable. See, e.g.

, Consol. Edison Co. of N.Y., Inc. v. Pataki , 292 F.3d 338, 343 (2d Cir. 30

2002). Fede ral agencies, on the other hand, would regulate the “wholesale rates charged among 3124

businesses involved in providing” power. PUD No. 1 , 471 F.3d at 1062 (internal quotation marks 1

omitted). Nonetheless, prior to the 1980s, the dominance of retail utilities e nsured that “arms

2

length transactions on wholesale markets were relatively few.” David B. Spence & Robert 3

Prentice, The Transformation of American Energy Markets and the Problem of Market Power

, 4

53 B.C. L. Rev. 131, 146 (2012). 5

6

As a result of this market structure, “electricity generation, transmission, and distribution 7

for a particular geographic area were generally provided by and under the control of a single 8

regulated utility.” M idwest ISO Transmission Owners v. FERC , 373 F.3d 1361, 1363 (D.C. Cir. 9

20 04) (Roberts, J. ). “Although there were some interconnections among utilities, most operated 10

as separate, local monopolies subject to state or local regulation.” New York v. FERC , 535 U.S. 11

1, 5 (2002). This concentration of market power meant that if a loc al utility’s operating costs rose 12

– due to the expense associated with long

- term storage of spent nuclear fuel, for example

– then 13

consumers would likely experience direct increases in prices as well. As a result , the Pacific Gas 14

Court accepted California’ s argument that the spent nuclear “waste disposal problem was largely 15

economic or the result of poor planning, not safety related.” Pacific Gas , 461 U.S. at 213 16

(internal quotation marks omitted). 17 17

18

The national marketplace for power began to evolve in the late 1970s. First, Congress 19

passed the Public Utility Regulatory Policies Act of 1978 (PURPA), 16 U.S.C. § § 2601 et seq.

, 20

which sought “to promote the development of new generating facilities and to conserve the use 21

of fossil fuels.” New York , 535 U.S. at 9. To do so, PURPA “directed FERC to promulgate rules 22

requiring utilities to purchase electricity from ‘qualifying cogeneration and small power 23

production facilities.’” Id. (quoting FERC v. Mississippi , 456 U.S. 742, 751 (1982)). Even more 24

significant

, Congress enacted the Energy Policy Act of 1992, which “authorized FERC to order 25

individual utilities to provide transmission services to unaffiliated wholesale generators ( i.e. , to 26

‘wheel’ power) on a case

- by

- case basis.” Id. (citing 16 U.S.C. §§ 824j

- 824 k). FERC exercised 27

this authority in 1996 by promulgating Orders 888 and 889, which require “all public utilities 28

owning and/or controlling transmission facilities to offer non

- discriminatory open access 29

17 Indeed, the power market in California was not opened to competition until the late 1990s. See David B. Spence,
Can Law Manage Competitive Energy Markets? , 93 Cornell L. Rev. 765, 779

- 81 (2008).25

transmission service.” Transmission Access Policy St udy Grp. v. FERC , 225 F.3d 667, 68 2 (D.C. 1

Cir. 2000) (per curiam), aff’d sub nom

. , New York

, 535 U.S. 1. 18 2

3

By the late 1990s, the structure of the power industry had changed dramatically. Many 4

integrated utilities had divested their generating assets, and new participants entered the market 5

“in the form of both independent and affiliated power marketers and gen erators as well as 6

independent power exchanges.” Regional Transmission Organizations, Order No. 2000, 89 7

F.E.R.C. ¶ 61,285, at *7 (Dec. 20, 1999). Many formerly retail utilities became independent 8

“merchant generators,” selling the power they generated who lesale across state lines

. The 9

emergence of merchant generators placed a significant strain on existing power grids. In 10

response, FERC sought to organize owners of transmission lines into “independent system 11

operators” (ISOs) and “regional transmission org anizations” (RTOs) “to help manage the grid, 12

ensure system reliability, and guard against discrimination and the exercise of market power in 13

the provision of transmission services.” Spence & Prentice, supra , at 148. These ISOs and RTOs 14

gave rise to several large regional electricity trading hubs, including the California ISO, the 15

Pennsylvania

- New Jersey

- Maryland (PJM) ISO, the New York ISO, the Electric Reliability 16

Council of Texas (ERCOT) ISO, and ISO New England. 19 17

18

The development of merchant generators had two effects on the marketplace for power 19

that are relevant here . First, consumers gained access to new sources of power, which meant that 20

they were no longer captive to a single in

- state provider. See Transmission Access , 225 F.3d a t 21

683. Correspondingly, “[l]ocal energy utilities, could, rather than producing their own power to 22

sell to the public, choose between various competing producers and then transfer the expected 23

savings from this competition to the public.” PUD No. 1 , 471 F. 3d at 1065. T he development of 24

large regional power grids gave consumers access to power generated by out

- of

- state merchant 25

generators. As the Supreme Court has noted, it is now “possible for a customer in Vermont [to] 26

purchase electricity from an environm entally friendly power producer in California or a 27

18 The orders may be read in full at Promoting Wholesale Competition Through Open Access Non

- Discriminatory
Transmission Services by Public Utilities, Order 888, 61 Fed. Reg. 21,540, 21,541

- 43 (FERC May 10, 1996)
(codified at 18 C.F.R. pt. 37); and at Open Access Same

- Time Information System (Formerly Real

- Time
Information Networks) and Standards of Conduct, Order 889, 61 Fed. Reg. 21,737, 21,740

- 41 (FERC Apr. 24,
1996) (codified at 18 C.F.R. pt. 37).

19 See U.S. Energy Info. Admin., The Changing Structure of the Electric Power Industry 2000: An Update, at 74

- 77

(2000), available at http://www.eia.gov/cneaf/electricity/chg_stru_update/update2000.pdf.26

cogeneration facility in Oklahoma.” New York , 535 U.S. at 8 (internal quotation marks omitted). 1

Indeed, Vermont Yankee presently supplies only one

- third of the power consumed by Vermont 2

residents; the rest is purchased by Vermont electrical companies from o ther sources

. See In re 3

Entergy Nuclear Vt. Yankee, LLC , 2006 WL 1418626, at *12. Second , because states may obtain 4

power from energy plants located in other states, there is less public support for continued 5

operation of in

- state nuclear power plants and greater opposition to such local plants on safety as 6

well as non

- safety grounds. 20 7

8

With the advent of merchant generators , the challenge of identifying a long

- term spent 9

nuclear fuel storage solution has grown even more pressing. After a useful life of four

- to

- six 10

years, spent nuclear fuel rods are thermally hot when removed from reactors and emit substantial 11

amounts of radi ation. New York v. NRC , 681 F.3d 471, 474 (D.C. Cir. 2012) ( citing Blue Ribbon 12

Commission on America’s Nuclear Future, Report to the Secretary of Energy 10

- 11 (2012)). The 13

rods are transferred to deep, water

- filled pools for cooling; they may then be trans ferred to large 14

concrete and steel “casks” for storage, even though they will continue to emit dangerous 15

radiation “for time spans seemingly beyond human comprehension

. ” Id. ( quoting Nuclear 16

Energy Inst., Inc. v. EPA , 373 F.3d 1251, 1258 (D.C. Cir. 2004) ( per curiam)). Nonetheless, 17

despite the continued production of nuclear waste, and despite “years of ‘blue ribbon’ 18

commissions, congressional hearings, agency reports, and site investigations, the United States 19

has not yet developed a permanent solution.” I d. Most recently, plans to develop a federally

20

sponsored storage site at Yucca Mountain in Nevada were abandoned when the Department of 21

Energy withdrew its license application for the facility. See Nat’l Ass’n of Regulatory Util. 22

Comm’rs v. U.S. Dep’t of E nergy , 680 F.3d 819, 822

- 23 (D.C. Cir. 2012). “ At this time, there is 23

not even a prospective site for a repository, let alone progress toward the actual construction of 24

one. ” New York v. NRC , 681 F.3d at 474

. 25

26

27

20 See, e.g.

, New York v. United States , 505 U.S. 144, 197 (1992) (noting that “public opposition” undermined a
state’s efforts to identify sites for nuclear waste disposal); State of Nev. v. Watkins , 914 F.2d 1545, 1550

- 51 (9th Cir.
1990) (noting the opposition of the Nev ada Legislature to the storage of spent nuclear fuel in the state); see also

Michael B. Gerrard, Fear and Loathing in the Siting of Hazardous and Radioactive Waste Facilities: A
Comprehensive Approach to a Misperceived Crisis , 68 Tul. L. Rev. 1047, 1137

- 46 (1994) (discussing the sources of
public opposition to spent nuclear fuel storages sites).27 A(4). Act 160 1

2

With this general background in mind, we begin our preemption analysis of Act 160 , the 3

most recent of Vermont’s legislative enactments at issue

. 21 T he proper place to begin the analysis 4

of a statute is its text. See, e.g.

, United States v. Am. Trucking Ass’ns , 310 U.S. 534, 543 (1940) 5

(“There is, of course, no more persuasive evidence of the purpose of a statute than the words by 6

which the legislature undertook to give expression to its wishes.”). As described previously, Act 7

160 add s three new sections to the Vermont Statute s: sections 248(e)(2), 248(m), and 254 of title 8

30. Section 248(e)(2) require s the Vermont L egislature to determine whether an extension of the 9

Vermont Yankee operating lease should be granted ( that is , to determine whether the lease 10

advances the “general welfare”) before the Board can issue a new CPG. Vt. Stat. Ann. tit. 30, § 11

248(e)(2). Section 248(m) require s that the evaluation of a new CPG be conducted using current 12

cost

- benefit assumptions, rather than those that informed the issuance of the previous CPG. Id. § 13

248(m). Section 254 require s that an application to operate Vermont Yankee past March 21, 14

2012, be submitted at least four years in advance, and that the Department engage in extensive 15

fact

- finding to support the legislative determination that t he lease advances the general welfare. 16

Id. § 254(a). T he statute requires that the Department “identify, collect information on, and 17

provide analysis of long

- term environmental, economic, and public health issues , including 18

issues relating to dry cask storage of nuclear waste and decommissioning options.” Id. § 19

254(b )(2)(B) (emphasis added). These are factors that the Board “shall consider” in “acting on a 20

petition” subject to the statute, id. § 254(b)

- (c), and th e Board’s conclusions are reported to the 21

Vermont Legislature to inform its own determination regarding the status of Vermont Yankee

, 22

id. § 254(a)(2 )

- ( 3). 23

24

As an initial matter, we must consider whether it is appropriate to consider a facial 25

challenge to Act 160. In this regard, we find it important that Act 160, through the operation of 26

section 248(e)(2), transfers the process for determining whether to approve a new operating 27

21 As the party asserting preemption, Entergy carries the burden of proof. See Silkwood , 464 U.S. at 255 (stating that

Kerr

- McGee, as the party asserting the preempt ion claim, bore the “burden to show that Congress intended to
[preempt] such [punitive damages] awards in the Atomic Energy Act); see also English , 496 U.S. at 85

- 86
(following the approach set out in Silkwood ). We thus reject the burden

- shifting approach that the district court
imported from Equal Protection Clause and First Amendment jurisprudence. See Entergy Nuclear , 838 F. Supp. 2d

at 225, 230

- 31 (citing Vill. of Arlington Heights v. Metro. Hous. Dev. Corp. , 429 U.S. 252, 271 n.21 (1977), and Mt.

Healt hy City Sch. Dist. Bd. of Educ. v. Doyle , 429 U.S. 274, 285

- 86 (1977)).28

license for Vermont Yankee from t he Board to the Vermont L egislature. Before the passage of 1

Act 160, the Board’s decision regarding whether to approve the continued operation of Vermont 2

Yankee would have been subject to review by the Vermont Supreme Court. Vt. Stat. Ann. tit. 30, 3

§ 12. Su ch a review likely w ould have encompassed legal questions regarding whether Act 160 4

was preempted by federal law. See, e.g.

, Petition of E. Ga. Cogeneration Ltd. P’ship , 614 A.2d 5

799, 804

- 05 (Vt. 1992). After the passage of Act 160, i f the Vermont L egislat ure ch o se not to 6

act, the operating license for Vermont Yankee would lapse on March 21, 2012

, and that decision 7

would not be subject to judicial review. See Bd. of Educ. of Kiryas Joel Vill. Sch. Dist. v. 8

Grumet , 512 U.S. 687, 703 (1994) (“[U]nlike an administrative agency’s denial of an exemption 9

from a generally applicable law, which would be entitled to a judicial audience, a legislature’s 10

failure to enact a special law is itself unreviewable.” (internal citations and quotation ma rks 11

omitted)). 12

13

B ecause a “state moratorium” on the operation of Vermont Yankee “grounded in safety 14

concerns falls squarely within the prohibited field,” Pacific Gas , 461 U.S. at 213, a law enacted 15

for that purpose would facially lack any “plainly legitimate sweep.” Wash. State Grange v. 16

Wash. State Republican Party , 552 U.S. 442, 449 (2008) (internal quotation marks omitted). We 17

also note several other reasons why it is appropriate to consider Entergy’s facial challenge to the 18

validity of Act 160. First, because of the ex tensive legislative record accompanying Act 160 and 19

the detailed inquiry conducted by the district court below, it “is not the case . . . that the Court 20

today is premature in interpreting [Act 160] on the basis of a factually barebones record.’” 21

Citizens U

nited v. FEC , 130 S. Ct. 876, 894 (2010) (internal quotation marks and alterations 22

omitted). Second, because Act 160 shifts the decision regarding whether to approve the operation 23

of Vermont Yankee into the unreviewable province of the Vermont Legislature ’ s “ fail ure to 24

enact a special law,” Grumet , 512 U.S. at 703, we will not otherwise have any “occasion to 25

construe the law in the context of actual disputes.” Wash. State Grange , 552 U.S. at 450. Lastly, 26

we believe that “the issues before the court are conc rete and sharply presented” so as to permit 27

meaningful review. Dickerson v. Napolitano , 604 F.3d 732, 741 (2d Cir. 2010) (quoting 28

Thibodeau v. Portuondo , 486 F.3d 61, 71 (2d Cir. 2007)). It is therefore “necessary to determine 29

whether there is a non

- safety rationale” for Act 160 by considering whether the decision to 3029

effectively shut down Vermont Yankee serves the policy interests articulated in the statute. 1

Pacific Gas , 461 U.S. at 213

. 2

3

The legislative policy and purpose section of Act 160 sets forth several rationales for the 4

statute. Section 1(a) states that “a nuclear energy generating plant may be operated in Vermont 5

only with the explicit approval of the General Assembly expressed in law,” and that legislative 6

approval require s a “public deliberat ion” of such factors as “the state’s need for power, the 7

economics and environmental impacts of long

- term storage of nuclear waste, and choice of 8

power sources among various alternatives.” Act 160 § 1(a). The statute later states that the issue 9

of long

- ter m spent fuel storage should be framed as 10

11

a part of the larger societal discussion of broader economic and environmental issues relating to 12

the operation of a nuclear facility in the state, including an assessment of the potential need for the 13

operation of the facility and its economic benefits, risks, and costs; and in order to allow 14

opportunity to assess alternatives that may be more cost

- effective or that otherwise may better 15

promote the general welfare. 16

17

Id. § 1(d). Drawing on the language in sections 1 (a) and 1(d), Vermont argues that Act 160 18

advances two policy interests: (1) i ncreased use of a diverse array of renewable power sources; 19

and (2) p romotion of energy source s that are more cost

- effective. 20

21

Although Vermont’s asserted policy interests would not necessarily interfere with the 22

preempted concern of radiological safety

, our inquiry does not e nd at the text of the statute. 23

24

We do not blindly accept the articulated purpose of [a state statute] for preemption purposes. If 25

that were the rule, legislatures could “ nullify nearly all unwanted federal legislation by simply 26

publishing a legislative committee report articulating some state interest or policy

– other than 27

frustration of the federal objective

– that would be tangentially furth ered by the proposed state 28

law.” 29

30

Greater N.Y. Metro. Food Council, Inc. v. Giuliani , 195 F.3d 100, 108 (2d Cir. 1999) (quoting 31

Gade v. Nat’l Solid Wastes Mgmt. Ass ’n , 505 U.S. 88, 106 (199 2)) (internal citation omitted)

, 32

abrogated on other grounds by Lorillard Tobacco Co. v. Reilly , 533 U.S. 525 (2001). As a result, 3330

“we have refused to rely solely on the legislature’s professed purpose and have look ed as well to 1

the effects of the law.” Gade , 505 U.S. at 105 ; see also Vango Media, Inc. v. City of N.Y. , 34 2

F.3d 68, 73 (2d Cir. 1994) (“[T]he question of preemption is defined, in part, by the purpose of 3

the state law, and, in part, by the state law’s actual effect. Both must be considered in answering 4

the question whether state regulation in a given field so i nterferes with federal regulation as to be 5

deemed preempted by the federal statute.” (citing Gade , 505 U.S. at 103

- 06) (internal citations 6

omitted)). 22 Although the Pacific Gas Court did not explicitly delineate the level of scrutiny a 7

court must perform to determine whether a statute is preempted by the Atomic Energy Act, we 8

believe the Court’s admonition against a “state judgment that nuclear power is not safe enough to 9

be further developed

, ” 461 U.S. at 213, require s us to conduct a more searching review to 10

determine whether a statute was enacted based upon radiological safety concerns

. See also Cnty. 11

of Suffolk , 728 F.2d at 58 ( “[A] state, in evaluating the need for a nuclear generating facility, 12

[can] not even consider the safety aspects.” (citing Pacifi c Gas , 461 U.S. at 213)). We therefore 13

decline Vermont’s invitation to apply an analytic framework akin to “ rational basis review, ” 14

which would preclude us from identifying the true purpose of a statute as required by Pacific 15

Gas and would allow states to implement a “moratorium on nuclear construction grounded in 16

safety concern s [that] falls squarely within the prohibited field.” Pacific Gas , 461 U.S. at 213. 23 17

18

As to the goal of diversifying the State’s means of producing power, Vermont argues that 19

the presence of Vermont Yankee “hamper[s] efforts at diversification and has a dampening effect 20

on the development of alternatives.” Citing the testimony of the State’s former Director of 21

Regulated Utility Planning, Vermont argues that closing Vermont Yankee “would free up space 22

in the electrical generation market and make it easier to promote diversity and sustainable 23

resources.” Vermont also quotes a former Maine state power regulator and NRC commissioner, 24

who testified before the district court that the State has a “legitimate interest in energy planning 25

22 See also Loyal Tire & Auto Ctr., Inc. v. Town of Woodbury , 445 F.3d 136, 145 (2d Cir. 2006) (Sotomayor, J. )
(noting, in the context of Interstate Commerce Act preemption, that a court must inquire into whether the state or local regulation is “genuinely responsive” to the proffered rationale).

23 Moreover, the statute provides that “public health issues,” including those related to storage of nuclear waste, are

to be considered in determining whether to permit the continued operation of Vermont Yankee. As this phrase is not
defined in the statute, we must look to the legislative intent to determine its meaning. See Universal Church v.

Geltzer , 463 F.3d 218, 223 (2d Cir. 2006) (“[W]e may look to the legislative history to determine the legislative intent where the plain statutory language is ambiguous . . . .”).31

and promoting renewable s” and argued that “ any sensible energy planner would be anticipating a 1

time when Vermont would be without Vermont Yankee.” 2

3

However, this argument presupposes that Vermont ret ail utilities lack choices with 4

respect to the sources of the energy they purchase. “[S]tates have broad powers under state law 5

to direct the planning and resource decisions of utilities under their jurisdiction. States may, for 6

example, order utilities to build renewable generators themselves, or . . . order utilities to 7

purchase renewable generation.” S. Cal. Edison Co. San Diego Gas & Elec. Co. , 71 FERC ¶ 8

61,269, at *8 (June 2, 1995). Vermont Yankee provides only one third of the power consumed in 9

the St ate, so it is clear that the Vermont L egislature can direct retail utilities to “purchase 10

electricity from an environmentally friendly power producer in California or a cogeneration 11

facility in Oklahoma,” if it so chooses

. New York , 535 U.S. at 8 (internal quotation marks 12

omitted). Vermont can also direct or encourage its utilities to purchase power from nuclear 13

power plants located out

- of

- state . Indeed, Vermont recently pursued this exact approach by 14

approving a petition to allow its retail utilities to pu rchase power from the Seabrook Station 15

Nuclear Power Plant in New Hampshire , a merchant generator like Vermont Yankee

. In re 16

Green Mountain Power Corp. , Docket No. 7742, 2011 WL 5507224, at *1 (Vt. Pub. Serv. Bd. 17

Nov. 4, 2011). Closing Vermont Yankee would thus have little effect on the actual array of 18

energy sources from which Vermont utilities can purchase power. 24 19

20

As to the second goal of containing costs, Vermont argues that the economic rationale 21

relied on by the Pacific Gas Court applies with equal force here

. Vermont suggests that shutting 22

down Vermont Yankee might assist the State in identifying “alternatives that may be more cost

- 23

24 Indeed, the Board recognized alternative sources of energy in its Order approving the sale of Vermont Yankee to
Entergy in 2002, but noted some of the related problems:

We cannot assume, as urged by several members of the public, that the power from Vermont
Yankee can be quickly replaced by renewable resources. Vermont already gets a higher percentage
of its power from renew able sources (mostly large hydro

- power dams) than many other states.
With the exception of large hydro dams, renewable energy resources tend to be relatively small
sources of generation, particularly in relation to Vermont Yankee. Thus, instead of renewabl e sources, Vermont utilities would need to rely on fossil fuel generating stations to replace much of
the power now provided by Vermont Yankee. This option would have the very serious
disadvantage of significantly increasing the emission of air contaminant s and greenhouse gases.

In re Vt. Yankee Nuclear Power Corp. , 2002 WL 1997942 (footnote omitted).32

effective.” However, this argument is also not persuasive in light of Vermont Yankee’s status as 1

a merchant generator. Increases in the prices Vermont Yankee charges for its power would not 2

be borne directly by a captive audience of retail consumers, as was the case for California 3

residents in Pacific Gas . Instead, Vermont Yankee is “a merchant generator, which means that it 4

sells power on the open wholesale market.” Envtl. Law & Policy Ctr. v. NRC , 470 F.3d 676, 679 5

(7th Cir. 2006). For that reason, local energy utilities could simply “choose between vari ous 6

competing producers” and purchase power from the more cost

- effective provider. See PUD No. 7

1 , 471 F.3d at 106 5

. Closing Vermont Yankee would not affect the availability of other sources 8

of power from which local retail utilities could purchase power th at might be more “cost

9

effective;” indeed, they are free to do so now. 25 10

11

Vermont’s second economic argument regarding the State’s potential future liability for 12

decommissioning costs is also of little weight

. Vermont contends that the recent collapse of the 13

plan to construct a long

- term spent nuclear fuel storage facility in Yucca Mountain means that 14

“[i]f plant operators such as Entergy become insolvent or abandon their obligations, the financial 15

burdens will fall on host states.” However, “ [i] n 1988, the Nuclear Regulatory Commission 16

adopted a final rule requiring operators of nuclear facilities to file decommissioning plans, and to 17

pre

- fund decommissioning by placing money aside in an external sinking fund.” Neb. Pub. 18

Power Dist. v. MidAmerican Energ y Co. , 234 F.3d 1032, 1037 (8th Cir. 2000) (citing Nuclear 19

Regulatory Commission Final Rule, General Requirements for Decommissioning Nuclear 20

Facilities, 53 Fed. Reg. 24018

- 01 (June 27, 1988) (codified at 10 C.F.R. § 50.82)). “By 21

regulation, decommissionin g funds may not be used for non

- decommissioning related expenses, 22

such as [spent nuclear fuel] storage.” Bos. Edison Co. v. United States , 93 Fed. Cl. 105, 136 23

(2010), rev’d on other grounds , 658 F.3d 1361 (Fed. Cir. 2011). Nuclear power plants must 24

provid e periodic reports to the NRC concerning the status of such funds for the purpose of 25

25 We note that in its 2006 Order granting a new CPG to Vermont Yankee to store additional spent nuclear fuel on
site, the Board made the following argument r egarding the effect of the plaint shutting down :

In the absence of the dry fuel storage project, a substantial likelihood exists that Vermont Yankee
would shut down by 2008 due to the inability to store the spent nuclear fuel it generates. [Vermont

retail utilities] could replace the power with other purchases, but such replacement power would
probably cost more (perhaps significantly more) than the Vermont Yankee power.

In re Entergy Nuclear Vt. Yankee, LLC , 2006 WL 1418626, at *20.33

providing “reasonable assurance that funds will be available for the decommissioning process.” 1

10 C.F.R. § 50.75(a). 26 2

3

W e must also look to the statute’s legislative history to determine if it was passed with an 4

impermissible motive

. Vermont argues that Pacific Gas forecloses the use of legislative history 5

to analyze a state statute for Atomic Energy Act preemption, noting the Court’s dictum 6

describing “inquiry into le gislative motive [as] often an unsatisfac tory venture.” 461 U.S. at 216. 7

I n analyzing the purpose of the Warren

- Alquist Act, however, the Court looked to a report issued 8

by the state legislative committee that presented the bill. Id. at 214. Moreover , in a subsequent 9

decision , the Court interpreted Pacific Gas to hold that a “state moratorium on nuclear 10

construction grounded in safety concerns falls squarely within the prohibited field.” English

, 496 11

U.S. at 84 (quoting Pacific Gas , 461 U.S. at 213). “In other words, th e Court defined the 12

preempted field, in part, by reference to the motivation behind the state law .” Id. (emphasis 13

added) ; see also Gade , 505 U.S. at 105

- 06 (“We can no longer adhere to the aberrational 14

doctrine . . . that state law may frustrate the operation of federal law as long as the state 15

legislature in passing its law had some purpose in mind other than one of frustration [of the 16

f ederal regulatory scheme].” (quoting Perez v. Campbell , 402 U.S. 637, 651

- 52 (1971)) 17

(emphasis added)). Indeed, several other courts applying Pacific Gas have endorsed the use of 18

legislative history to determine whether the Atomic Energy Act preempts a par ticular state 19

statute or local ordinance. See, e.g.

, Skull Valley , 376 F.3d at 1251

- 53; Long Island Lighting Co. 20

v. Cnty. of Suffolk, N.Y. , 628 F. Supp. 654, 665

- 66 (E.D.N.Y. 1986); see also Loyal Tire & Auto 21

Ctr., Inc. v. Town of Woodbury , 445 F.3d 136, 1 45 (2d Cir. 2006) (Sotomayor, J. ) (holding, in 22

the context of Interstate Commerce Act preemption, that a court “must consider any specific 23

expressions of legislative intent in the statute itself as well as the legislative history”); Greater 24

N.Y. Metro.

, 195 F.3d at 108 & n.1 (examining legislative history to determine whether a New 25

York City local law was preempted by the Federal Cigarette Labeling and Advertising Act). We 26

26 In conducting this analysis, we do not suggest that Vermont Yankee’s status as a merchant generator precludes
every possible economic argument Vermont could offer as a basis for regulating the plant. See Pacific Gas , 461 U.S.

at 208

- 09, 215; see also Nieman v. NLO, Inc. , 108 F.3d 1546, 1552 (6th Cir. 1997) (“[W]hile recognizing that
Congress has preempted the entire field of nuclear safety regulation, the Supreme Court has been willing to uphold
the application of state law where it affects nuclear regulation only indirectly, i.e. , where state law amounted to economic regulation . . . .”). We note only that the rationales proffered here are implausible in light of the actual

effect of Act 160

, and that the non

- safety

- related rationales for a legislative decision to shut down V ermont Yankee
are not adequately supported by the record.34

therefore believe that legislative history is an important source for determining w hether a 1

particular statute was motivated by an impermissible motive in the preemption context. 27 2

3

Vermont argues that the task of determining the legislative intent behind Act 160 is 4

particularly difficult in this case because the Vermont Legislature, as a “part

- time citizen body, 5

does not produce formal committee reports like those Congress prepares, and it has no 6

requirement to preserve complete records of its proceedings.” In addition, “[c] ommittee hearings 7

are generally reco rded, but are not contemporaneously transcribed, and often do not identify the 8

speaker. Floor debates are usually recorded in the Senate, but not in the House of 9

Representatives.” For this reason, Vermont argues that much of the legislative history behind Act 10

160 is “missing or incomplete .” 11

12

Acknowledging these conditions does not change the fact that a “court’s primary purpose 13

in statutory i nterpretation is to discern legislative intent.” Morgan v. Gay , 466 F.3d 276, 277 (3d 14

Cir. 2006). 28 Although th e lack of systemized record

- keeping may make our task more 15

challenging

, the informality of the proceedings of t he Vermont Legislature and the S tate’s 16

decision to not document its legislative history do not immunize Act 160 from judicial inquiry 17

into legislative motivation

. Cf. Blanton v. City of Murfreesboro , 856 F.2d 731, 734 (6th Cir. 18

1988) (“While we recognize today that the use of legislative history, much of which is not 19

recorded until after the final congressional action, in trying to unde rstand the intent of Congress, 20

is not as meaningful as it once was, we find ourselves with no other means of determining the 21

intent of Congress in enacting this legislation.”). 22

23

27 We acknowledge that Pacific Gas does not explain with precision the role legislative history plays in the analysis
of an Atomic Energy Act preemption claim. See English , 496 U.S. at 84 n.7 (“Wheth er the suggestion of the
majority in Pacific Gas that legislative purpose is relevant to the definition of the pre

- empted field is part of the holding of that case is not an issue before us today . . . .”); see also Kerr

- McGee Chem. Corp. v. City of W. Chi

. , 914 F.2d 820, 827 (7th Cir. 1990) (“It is not clear how heavily legislative purpose is to be weighed in determining
preemption.”); Norris v. Lumbermen’s Mut. Cas. Co. , 881 F.2d 1144, 1150

- 51 (1st Cir. 1989) (interpreting the “teaching of Pacific Gas & E lectric ” as requiring an analysis of a state statute’s text and effect). But see Skull
Valley , 376 F.3d at 1252 (“[W]e are required to follow the preemption analysis set forth in Pacific Gas

, Silkwood

, and English , which requires consideration of the purpo se of the allegedly preempted statute, along with its effects.”).

Moreover, the Pacific Gas Court conducted a methodical analysis of the legislative intent undergirding the federal
Atomic Energy Act to determine its scope and effect, 461 U.S. at 205

- 11, an d we see no reason why the state statute

at issue should not be so scrutinized as well.

28 See also Belanger v. Salvation Army , 556 F.3d 1153, 1155 (11th Cir. 2009); Nike, Inc. v. McCarthy , 379 F.3d 576,

581

- 82 (9th Cir. 2004); Femedeer v. Haun , 227 F.3d 12 44, 1249 (10th Cir. 2000).35

We agree with the district court’s careful analysis of the legislative intent motivating 1

Vermont’s enactment of Act 160 insofar as the district court identified radiological safety as the 2

Vermont legislature’s primary purpose in enacting the statute

. 29 T he district court concluded that 3

the legislative record contained “references, almost too numerous to count, [that] reveal 4

legislators’ radiological safety motivations and reflect their wish to empower the legislature to 5

address their constituents’ fear of radiological risk, and [the legislators’] beliefs that the plant 6

was too unsaf

e to operate, in deciding a petition for continued operation.” Entergy Nuclear , 838 7

F. Supp. 2d at 229. We need not repeat the entirety of the district court’s examination, which 8

included considering many hours of audiotapes of floor debates and committee meetings for 9

which written transcriptions are not typically maintained, except to note the remarkable 10

consistency with which both state legislators and regulators expressed concern about radiological 11

safety and expressed a desire to evade federal preemptio n

. See Disabled in Action of Metro. N.Y. 12

v. Hammons , 202 F.3d 110, 124 (2d Cir. 2000) (noting that the “sponsor/floor manager statement 13

and floor and hearing colloquy” are among “the most authoritative and reliable materials of 14

legislative history”). 15

16

The Vermont Senate Finance Committee conducted its first hearings on the bill that 17

would ultimately become Act 160 only days after Entergy filed its application with the NRC for 18

an extension of its operating license for Vermont Yankee past 2012. During those f irst hearings, 19

the committee chair and the chairman of the Board engaged in an extended colloquy regarding 20

the permissible legislative purposes for the bill

, with particular emphasis o n Pacific Gas and its 21

roadmap for appropriate state legislative regulati on of nuclear facilities

. After being informed 22

that regulati on based on radiological safety was preempted and impermissible , the committee 23

chair responded, “Okay, let’s find a nother word for safety,” an approach also adopted by the 24

Board chairman. A state legislator participating in the hearing responded to testimony from a law 25

professor regarding the permissible scope of the bill by stating, “I understand that only the feds 26

are allowed to think of safety issues, and we carefully don’t use that word here.” Another 27

29 Our analysis focuses on whether radiological safety was the primary purpose undergirding the passage of Act 160,
not simply whether safety was only one of several considerations. See Pacific Gas , 461 U.S. at 196, 213 (identifyi ng

“ both safety and economic aspects to the nuclear waste issue,” yet finding no preemption where the Warren

- Alquist

Act had “ a non

- safety rationale” (emphasis added)); cf. Vango Media, Inc. v. City of N.Y. , 34 F.3d 68, 73 (2d Cir.
1994) (finding that whil e the challenged statute had “an associated economic impact on society,” its “primary
interest” was the preempted field of “public health”).36

member of the Finance Committee expressed concern that “all of our work [will] get overturned . 1

. . by the feds because it’s based on safety? That’s all it’s going to be based on.” A third member 2

of the committee asserted that the federal g overnment likely would not be able to transport 3

Vermont Yankee’s spent nuclear fuel out of the state, and then asked rhetorically, “[D]o we want 4

another 40 years’ worth of radioactive materials sitting somewhere in this State? I think the 5

people

. . . are getting a little concerned and obviously the closer you live to that radioactivity, 6

the more concerned you are. ” That same senator also referenced the incidents at Three Mile 7

Island and Chernobyl, and stated that the potential for a similar disaster was su fficiently serious 8

that “the l egislature felt [that the bill presented] a public policy decision that they needed to 9

make.” The Committee also considered testimony from the Vermont L egislature’s Chief 10

Legislative Counsel and a Department representative concerning ways of writing the bill so as to 11

avoid overt ref

erences to radiological safety. 12

13

The record also indicates that during hearings on the bill that would become Act 160, 14

members of the Department

, regulators

, and Vermont legislators repeatedly demonstrate d 15

awareness of the potential for a preemption problem and disguised their comments accordingly. 16

For example , during a hearing of the Senate Finance Committee on the bill that would become 17

Act 160 , a member of the Vermont State Nuclear Advisory Panel told the committee chair that 18

the Board “is not allowed to think about safety, as you know,” but then proceeded to opine on 19

various safety risks. The committee chair then admonished the panel member to speak purely 20

about “economic risks,” which led that individual to suggest that “ a safety problem has economic 21

implications, too.” The committee also heard testimony from a professor at a local law school 22

and former chairman of the Board , who warned the co mmittee that because “the State is 23

preempted in its concerns about radiological safety,” the “State has to make its decision on other 24

grounds, which would include anything from aesthetics to the obvious ones about financial 25

implication to such things as re liability of the electric grid .” During a subsequent exchange, the 26

current chairman of the Board instructed the committee on whether and in what circumstances it 27

could “talk about public health.” A member of the Department then recommended that “some 28

alter native language be placed into the bill” so as to avoid the issues referenced by the chairman 29

of the Board

. These are not merely isolated comments by a few legislators, but rather a part of a 30

consistent effort by those responsible for drafting and passing Act 160 to obfuscate the record 3137

through the use of misleading statements that they thought would pass muster under Pacific Gas

. 1

We conclude that the district court carefully, fairly, and properly analyzed the legislative intent 2

undergirding Act 160 and found that it demonstrated an impermissible primary purpose on the 3

part of the Vermont L egislature. 30 4

5

In concluding that the Vermont L egislature was improperly motivated by concerns 6

relating to radiological safety in enacting Act 160, we recognize that many legislators were likely 7

acting with some non

- preempted concerns in mind as well. “W hat motivates one legislator to 8

vote for a statut e is not necessarily what motivates scores of others to enact it.” Pacific Gas

, 461 9

U.S. at 216. We also acknowledge that the mere transfer of authority from a state administrative 10

board to the legislature does not require a finding of preemption

. We furth er recognize that the 11

extent to which a state legislature’s permissible concerns outweigh its impermissible motive in 12

passing a statute is not an issue that the Pacific Gas Court elucidated with great clarity. Compare 13

id. at 213 (“ A state prohibition on nu clear construction for safety reasons would also be in the 14

teeth of the Atomic Energy Act’s objective to insure that nuclear technology be safe enough for 15

widespread development and use

– and would be preempted for that reason .” (emphasis added)), 16

with id. (“[I]t is necessary to determine whether there is a non

- safety rationale for [the Warren

17

Alquist Act].” (emphasis added)). Nonetheless , our task is not “[t]o look for the sole purpose ” of 18

the Vermont L egislature ; that exercise would require us “ probably t o look for something that 19

does not exist.” Edwards v. Aguillard , 482 U.S. 578, 637 (1987) (Scalia, J. , dissenting). Our task 20

is to determine whether the Vermont L egislature’s decision to pass Act 160 was “grounded in 21

[radiological] safety concerns.” Pacifi c Gas , 461 U.S. at 213. A record as consistent and replete 22

30 We reach this conclusion without needing to consider the legislative history behind S.289, which

– had it passed

– would have permitted Vermont Yankee to operate for twenty years after March 21, 2012. We note that although S.289 arguably shares “a common heritage” with Act 160, it is “not before the Court, and indeed, . . . was not
passed.” S.289’s “provisions and [i ts] pedigree do not taint other parts of” Act 160. Pacific Gas , 461 U.S. at 215

- 16;
see also Pension Benefit Guar. Corp. v. LTV Corp. , 496 U.S. 633, 650 (1990) (“[S]ubsequent legislative history is a hazardous basis for inferring the intent of an earlier Congress.” (internal quotation marks omitted)). However, we
note that consideration of S.289’s legislative history would nonetheless confirm our analysis of Act 160, as its

re cord contains numerous references to radiological safety concerns. For instance, during a meeting of the Senate
Finance Committee debating the bill, a Department commissioner adverted to the recent tritium leak at the Vermont

Yankee site and suggested dela ying the vote on S.289 , commenting that determining “what sort of public health and
safety issues . . . we need to address is sort of priority one.” Various senators also reiterated concerns regarding the
potential safety risks to Vermont residents living near the plant during the hearings on S.289. Echoing an earlier
comment by the chair of the Senate Finance Committee during its debates regarding Act 160, one senator argued on the Senate floor that the other senators should consider “safety concerns, alth ough I’m not supposed to talk about
that so I won’t go into detail on that, but it’s certainly in everybody’s mind in this room, we all know it.”38

with references to radiological safety as that here meets any conceivable standard for the 1

allowable threshold level of impermissible concerns under Pacific Gas . As such, we affirm the 2

district court’s determination that Act 160 is preempted on its face by the Atomic Energy Act. 3

4

W e likewise affirm the district court’s grant of a permanent injunction enjoining the 5

defendants from enforcing Act 160. A plaintiff seeking a permanent injunction must 6

demonstrate: 7

8

(1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary 9

damages, are inadequate to compensate for that injury; (3) that, considering the balance of 10

hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the 11

public interest would not be disserved by a permanent injunction. 12

13

Monsanto Co. v. Geertson Seed Farms , 130 S. Ct. 2743, 2756 (2010) (quoting eBay, Inc. v. 14

MercExchange, L.L.C. , 547 U.S. 388, 391 (2006)). Ea ch of these four factors is clearly satisfied 15

here. First, Entergy would suffer an irreparable injury if the defendants were able to enforce Act 16

160 and shut down Vermont Yankee. See Tom Doherty Assocs., Inc. v. Saban Entm’t, Inc. , 60 17

F.3d 27, 37 (2d Cir. 1995) (finding irreparable harm in part because “the right to continue a 18

business ‘is not measurable entirely in monetary terms’” (quoting Semmes Motors, Inc. v. Ford 19

Motor Co. , 429 F.2d 1197, 1205 (2d Cir. 1970))). Second, Enterg y would be unable to recover 20

monetary damages from Vermont because of the Eleventh Amendment

. See United States v. 21

State of N.Y. , 708 F.2d 92, 93 (2d Cir. 1983) (per curiam). Third, the balance of hardships favors 22

Entergy because it would suffer irreparabl e losses from Vermont Yankee being shut down while 23

Act 160 would not meaningfully advance the rationales offered by Vermont. Lastly, the public 24

interest would not be disserved by a permanent injunction

, because Vermont would be able to 25

continue purchasing the power generated by Vermont Yankee while still diversifying its energy 26

base and purchasing power from more cost

- effective sources if it so chooses

. The district court 27

thus did not abuse its discretion in granting the permanent injunction enjoining the d efendants 28

from enforcing Act 160. 29

30

31

3239 A(5). Act 74 1

2

As with Act 160, our analysis of Act 74 begins with the text of the statute. Act 74 add s 3

three sections to title 10 of the Vermont statutes: sections 6521, 6522, and 6523. As discussed 4

above, section 6521 summarizes the stated legislative findings. Vt. Stat. Ann. tit. 10, § 6521. 5

Section 6522 requires that the Board make certain findings before issuing a CPG allowing an 6

expansion of the spent nuclear fuel storage facility beyond the capacity previously auth orized

, 7

and for any such expansion after the expiration of the CPG on March 21, 2012, the affirmative 8

approval of the Vermont L egislature is required

. Id. § 6522 (c)(2), (c)(4)

. Section 6523 9

establishe s a “Clean Energy Development Fund” into which, pursuant to the 2003 MOU entered 10

into between Entergy and the Department, Entergy would make payments for the purpose of 11

promoting “cost

- effective and environmentally sustainable” power for the “long

- term bene fit of 12

Vermont electric consumers.” Id. § 6523 (current version at Vt. Stat. Ann. tit. 30, § 8015). 13

14

Act 74 also incorporates the 2005 MOU, which impose s on Entergy a variety of 15

requirements related to radiological safety . These requirements include rules regarding the 16

placement and configuration of dry

- fuel

- storage facilities that exceed the licensing standards 17

required by the NRC ; the spacing of casks ; temperature and radiation monitoring with 18

concomitant reporting requirements to the Department ; and the density of spent

- fuel pools. 2005 19

MOU at 1

- 2. The 2005 MOU also prohibits the storage of waste generated outside Vermont on 20

site, and require s Entergy to use its best efforts to move the spent nuclear fuel generated by 21

Vermont Yankee to a permanen t location outside the state as soon as possible. Id. at 2. 22

23

Lastly, m uch like Act 160, section 6522 allows the Vermont L egislature to terminate the 24

operation of Vermont Yankee after March 21, 2012, by refusing to act affirmatively. This 25

effectively codifi e s the Vermont Attorney General’s opinion that section 6505, which had 26

previously exempt ed Vermont Yankee from the provision requiring legislative approval of new 27

dry cask storage facilities codified at section 6501(a), did not apply to Entergy. As a result, the 28

decision regarding whether to permit Entergy to build additional spent nuclear fuel storage 29

facilities was vested in the Vermont Legislature. Unlike a decision of the Board, which would be 30

subject to review by the Vermont Supreme Court, the Ver mont Legislature ’s decision not to 3140

authorize the construction of new storage facilities

– even those already approved by the NRC , as 1

in this case

– would be unreviewable. 2

3

The reasons for the statute articulated in Act 74 ’s legislative findings section mirror many 4

of those offered in the preamble to Act 160. For instance, section 6521 expresses the State’s goal 5

of making its “future power supply . . . diverse, reliable, economically sound, and 6

environmentally sustainable.” Vt. Stat. Ann. tit. 10, § 6521(3). The statute also emphasizes the 7

State’s need “to make a smooth transition to the future,” which requires accelerating “Vermont’s 8

investment in electricity resources that are economically and environmentally sound and tha t can 9

be acquired in modest increments.” Id. § 6521(4). To make this “ transition, ” the statute states, 10

“there is a great value in investing in renewable energy sources, efficient, combined heat and 11

power facilities, and energy efficiency.” Id. § 6521(5). 12

13

These statements of legislative purpose reflect the two policy interests Vermont argues 14

are advanced by Act 160: (1) i ncreased use of a diverse array of renewable power sources; and 15

(2) p romotion of energy sources that are more cost

- effective. For the reas ons discussed above

, 16

we believe that neither of these interests is plausibly served by Act 74’s conferring unreviewable 17

power over the continued operation of Vermont Yankee past March 21, 2012, on the Vermont 18

L egislature

. In addition, the regulations relat ing to radiological safety incorporated into Act 74 19

from the 2005 MOU demonstrate that the Vermont Legislature’s primary motiv ation in enacting 20

Act 74 relates to neither diversifying the State’s power supply nor reducing costs. We therefore 21

turn to the legislative history behind Act 74 to determine the actual intent motivating its passage. 22

23

As with Act 160, we find that the district court’s comprehensive review of the legislative 24

history demonstrates convincingly that Act 74 wa s motivated by impermissible concerns about 25

the radiological safety of spent nuclear fuel storage . We note again the frequency with which 26

concerns about radiological safety appear in the legislative record in Senate committee meetings 27

and floor debates fro m legislators and regulators , notwithstanding obvious and frequent attempts 28

to avoid specific mention of safety concerns and of deference to Pacific Gas

. In hearings of the 29

House Natural Resources Committee considering the bill that would become Act 74, fo r 30

example, representatives asked numerous questions about the relative safety of spent nuclear fuel 3141

storage methods Entergy was considering and heard testimony questioning the competence of the 1

NRC to evaluate safety

. One witness described the legislative “problem that we’re dealing with 2

here [ i s] that a lot of the concerns that citizens have are concerns that you can’t address directly 3

the way they want them to be addressed.” Several representatives asked questions about the 4

dangers posed by an accidental release of radioactive waste. One member of the committee 5

admonished another for referring to radiological safety, stating, “ b ut we can’t say that, anything 6

about safety. It can only be about economics and aesthetics.” A member of the Department 7

expressed the same sentiment and advised a representative to frame his questions about the value 8

of maintaining Vermont Yankee as an “aesthetic issue,” rather than one concerned with safety. I n 9

a concluding committee meeting on the bill, one representative praised the committee’s work to 10

ensure that “the findings have been emasculated and sanitized

, ” noting that the bill no longer 11

makes any “mention of high

- level nuclear waste” or “the fact tha t [nuclear waste] lasts, it’s 12

dangerous for 100,000 years.” During the subsequent floor debate on Act 74, one senator stated 13

candidly, “ n one of us wants to have nuclear waste stored on the soil of Vermont. . . . The reality 14

is that [Vermont Yankee] will re quire some temporary storage . . . in order to [e] nsure safety for 15

our environment.” Other speeches adverted to the problem of storing radioactive nuclear waste in 16

Vermont while the federal government worked on developing a long

- term storage facility

, and to 17

the need to ensure that the method of waste storage employed by Vermont Yankee was safe. As 18

with our analysis of Act 160, the deficiencies in the record

- keeping of Vermont legislative 19

history, as well as the obvious coaching of Vermont legislators to avoid explicit statements about 20

nuclear safety, make our task in determining the principal purpose of Act 74 more difficult. 21

Nonetheless, this does not make our task less important, and the volume, frequency, and content 22

of the legislators’ comments sho w clearly that their actions were motivated by preempted safety 23

concerns. 24

25

The record also contains several statements by state legislators about the value of 26

assigning their concerns regarding radiological safety to the 2005 MOU , which required Entergy 27

t o take several actions specifically addressing radiological safety

. In re Entergy Nuclear Vt. 28

Yankee, LLC , 2006 WL 1418626, at *48. 31 During a meeting of the Senate Natural Resources 29

31 As previously discussed, sections 6522(b)(4) and 6523(a)(1)(A) sweep all MOUs executed before July 1, 2005,
into the ambit of Act 74, including the MOU executed on June 21, 2005.42

Committee, for example, the State’s legislative council remarked that an earlier draft of Act 74 1

contained a “laundry list of [nuclear

- waste] cask

- related issues . . . [that] are now covered by the 2

[2005] MOU.” A member of the Department testified that “the federal government takes 3

jurisdiction over any radiological saf ety and health. And so anything that touched on that, it’s 4

better to have in an agreed upon MOU than to have in the bill itself.” Other legislators echoed 5

this sentiment at several other junctures. On the Senate floor, one senator stated explicitly that a 6

favorable aspect of Act 74 was that it left regulations relating to radiological safety to the 2005 7

MOU entered into by Entergy and the Department, which, the senator believed, could save Act 8

74 from a preemption challenge. 32 Indeed, the 2005 MOU endorsed b y Act 74 include s a 9

provision under which Entergy “waived” any right to bring a preemption challenge to the 10

Board’s authority to regulate Vermont Yankee , which clearly demonstrates the concern of the 11

Vermont Legislature and the Board as to whether their actions would withstand scrutiny under 12

the Atomic Energy Act and Pacific Gas

. 33 13

14

These statements demonstrate the Vermont L egislature’s impermissible motive in passing 15

Act 74

– namely, to shut down Vermont Yankee based on concerns of radiologi cal safety while 16

attempting to avoid a preemption challenge under Pacific Gas

. Vermont legislators and 17

regulators attempted to achieve this objective by shifting provisions regarding radiological safety 18

into the 2005 MOU and by creating an unreviewable mechanism by which the construction of 19

new spent nuclear fuel storage facilities based on safety concerns would not be authorized. This 20

is a legislative approach that Pacific Gas does not permit. We therefore also affirm th e district 21

court’s judgment that sections 6522(c)(2) and 6522(c)(4) of title 10 of the Vermont Statutes, as 22

enacted by Act 74

, are preempted on their face by the Atomic Energy Act. For the reasons 23

discussed above regarding Act 160, we also affirm the distr ict court’s grant of a permanent 24

32 Our concerns regarding the intent behind Act 74 are consistent with a recent opinion of the Federal Circuit, which
examined the provision in the 2005 MOU requiring that Entergy perfor m an analysis of the stability of the river bank near a proposed spent nuclear storage facility “due to the perceived inadequacies of a previously performed

NRC

- required flood analysis.” Vt. Yankee Nuclear Power Corp. v. Entergy Nuclear Vt. Yankee, LLC , 68 3 F.3d 1330, 1349 (Fed. Cir. 2012). The Federal Circuit noted that “because the requirement to perform an additional
analysis was directly motivated by safety concerns, it is clear that the flood analysis requirement was likely
preempted under Pacific Gas

. ” Id.

33 We cite this provision of the 2005 MOU not for the purpose of ruling on whether a party may validly waive the
right to bring a preemption challenge, but only to demonstrate the impermissible intent on the part of the Vermont
Legislature. But see Ol

ympic Pipe Line Co. v. City of Seattle , 437 F.3d 872, 883 (9th Cir. 2006) (“Preemption is a power of the federal government, not an individual right of a third party that the party can ‘waive.’ [The plaintiff]
could not, therefore, waive a right that it di d not possess.”).43

injunction enjoining the defendants from enforcing sections 6522(c)(2) or 6522(c)(4) of the 1

Vermont Statutes. 2

3

* * * 4

5

In conducting th is analysis of Acts 74 and 160 and their adoption , we are mindful of the 6

traditional “presumption against preemption with respect to areas where states have historically 7

exercised their police powers

. ” N.Y. SMSA Ltd. P’ship , 612 F.3d at 104

. Vermont would have us 8

conclude that Acts 74 and 160 are merely “process statutes” that simply reall ocate the 9

responsibility for approving the continued operation of Vermont Yankee from an administrative 10

agency to the state legislature. Indeed, Justice Brandeis once observed that the “franchise to 11

operate a public utility . . . is a special privilege whi ch . . . may be granted or withheld at the 12

pleasure of the s tate.” Frost v. Corp. Comm’n , 278 U.S. 515, 534 (1929) (Brandeis, J.

, 13

dissenting). Vermont further contends that it enacted Acts 74 and 160 on several bases , such as 14

diversifying the state’s power supply and controlling economic costs, that, if true , would surely 15

be permissible reasons to deny the construction of a nuclear power plant. See Pacific Gas , 461 16

U.S. at 211. However, the Supreme Court has instructed us that the regulation of nuclear power 17

is different from the “areas where states have historically exercised their police powers.” N.Y. 18

SMSA Ltd. P’ship , 612 F.3d at 104. “The federal government has occupied the e ntire field of 19

nuclear safety concerns, except the limited powers expressly ceded to the states.” Silkwood , 464 20

U.S. at 249 (internal quotation marks and alteration omitted). We have conducted a review that 21

reflects the Supreme Court’s specific directive t hat a “state judgment that nuclear power is not 22

safe enough to be further developed would conflict directly with the countervailing judgment of 23

the NRC . . . and would be preempted for that reason.” Pacific Gas , 461 U.S. at 212. We 24

conclude that Vermont le gislators and regulators have undertaken a sustained effort to shut down 25

Vermont Yankee based on this impermissible reason. 26

27

We have considered the legislative history behind Acts 74 and 160

– undertaken in large 28

part through the district court’s exhaustive examination of audio tape recordings

– and found that 29

it contains innumerable expressions of concern for radiological safety from Vermont legislators 3044

and regulators. 34 We have taken note of the fact that the Vermont Legislature began considering 1

t he bill that would become Act 160

– requiring Entergy to seek legislative approval to operate 2

Vermont Yankee past 2012

– only one week after Entergy applied to the NRC for an extension 3

of its operating license. We have observed that w itnesses at committee meetings, legislators, 4

executive officials, and regulators were obviously coached to avoid making references to 5

radiological safety to navigate the shoals of Pacific Gas

. We have sought to reconcile the 6

rationales proffered by the Vermont Legislature for A cts 74 and 160 with th os e Acts’ operative 7

effect s and found them to be untethered from Vermont Yankee’s status as a merchant generator 8

and from the oversight already provided by the NRC. We have note d Vermont’s efforts to evade 9

court review by shunting req uirements that concern radiological safety to MOUs, which in turn 10

contain provisions requiring Entergy to “waive” its right to bring a preemption challenge in 11

court

. We have concluded that Vermont shifted decision

- making responsibility for approving the 12

continued operation of Vermont Yankee from the Board, whose decisions were subject to review 13

by the Vermont Supreme Court, to the Vermont Legislature, where no judicial review of its 14

action

– or inaction

– w ould be available. Providing an inadequate and misleading legislative 15

record, failing to provide plausible legislative rationales, and imposing impermissible safety

16

related obligations through non

- statutory memoranda of understanding, do not and cannot shi eld 17

Acts 74 and 160 from this Court’s review. 18

19

34 We have limited our analysis to Acts 74 and 160 in light of the district court’s determination that Entergy’s
challenge to Act 189 is moot, a ruling that neither party challenges. Moreover, we recognize that the legislative
history of A ct 189, which was passed after Act 160, is an imperfect indicator of the legislative intent behind Acts 74

and 160. See Pension Benefit Guar. Corp. , 496 U.S. at 650. However, we nonetheless note that Act 189 directly
regulate s on the basis of radiological safety by requiring assessments of Vermont Yankee’s electrical, emergency,
primary containment, and heat removal systems, with periodic audits to be conducted by a public oversight panel.
Act 189, §§ 3, 6. Furthermore, the legislative history behind Act 18 9 demonstrates that the purpose of the Act was to allow Vermont regulators to conduct an “independent safety inspection” o f Vermont Yankee, in large part because
Vermont legislators doubted the competence of the NRC. Several Vermont legislators also expres sed concern that a nuclear accident could tarnish Vermont’s “environmentally friendly” image. In addition, the testimony of
Department commissioners and Vermont legislators contains familiar examples of coaching to avoid explicit
references to radiological safety. Indeed, the committee chairperson drafting Act 189 specifically described the bill as a “reliability assessment because safety is not within our purview.” Moreover, during a hearing of the House
Natural Resources Committee, a member of the Departm ent distributed a handout entitled, “Everything You Wanted
to Ask About Preemption But Shouldn’t,” and provided testimony advising Vermont legislators on how to discuss
Act 189 in a manner that disguised their concerns about radiological safety. Testimony presented to the Committee
explicitly referenced Pacific Gas and recommended that Vermont legislators discuss closing Vermont Yankee

because it caused non

- radiological environmental problems or was “unreliable

, ” so as to avoid a preemption
challenge. Durin g later hearings, legislators openly admonished each other for using the word “safety” and similar
terms and expressed concerns o ver the prospect of preemption.45

W e do not question the legitimacy or sincerity of those Vermont residents and officials 1

who have safety

- related concerns about Vermont Yankee, but Vermont has other avenues 2

available to air its concerns . For example, the Atomic Energy Act mandates that the NRC hold 3

hearings

– if requested by “any person whose interest may be affected”

– when taking certain 4

actions relating to the licensing of a nuclear power plant. See Brodsky v. U.S. Nuclear Regulatory 5

Comm’n , 578 F.3d 175, 177

- 78 (2d Cir. 2009) (quoting 42 U.S.C. § 2239(a)(1)(A)). The NRC 6

has also promulgated regulations requiring a public notice

- and

- comment period before amending 7

any aspect of a nuclear power plant’s operating license. See 10 C.F.R. § 50.91. Lastly, “the 8

federal courts of appeals have exclusive jurisdiction to adjudicate appeals from ‘all final orders 9

of the [NRC] made reviewable by section 2239 of title 42.’” Riverkeeper, Inc. v. Collins , 359 10

F.3d 156, 164 (2d Cir. 2004) (quoting 28 U.S.C. § 2342(4)). Such reviewable final orders include 11

“all final orders in licensing proceedings whether or not a hearing before the [NRC] occurred or 12

could have occurred.” Id. (quoting Fla. Power & Light Co. v. Lorion , 470 U.S. 729, 737 (1985)). 13

Vermont and its residents are free to pursue any of these routes to express their concerns 14

regarding the potential public safety hazards posed by Vermont Yankee. The legislation passed 15

here, however, was not the way to resolve those concerns

. 16

17

As the Supreme Court has h eld, t he one avenue Vermont may not pursue is to pass a 18

“state moratorium” on nuclear energy “grounded in safety concerns.” Pacific Gas , 461 U.S. at 19

21 3 . For this reason, we hold that sections 6522(c)(2) and 6522(c)(4) of title 10 of the Vermont 20

Statutes a nd Act 160 in its entirety are preempted on their face by the Atomic Energy Act. 35 We 21

affirm the district court’s grant of a permanent injunction enjoining the defendants from 22

enforcing Act 160 or section 6522(c)(4) of title 10 of the Vermont Statutes, as e nacted by Act 74. 23

Entergy Nuclear , 838 F. Supp. 2d at 243. We also affirm the district court’s subsequent order of 24

March 19, 2012, enjoining the defendants from enforcing section 6522(c)(2) of title 10 of the 25

Vermont Statutes. 26

27

28

35 We agree with the district court’s determination that Entergy’s initial challenge to Act 189 is moot, as Entergy has already completed the studies of Vermont Yankee’s safety systems required by the statute, and the results have been
reported to the Vermont Legislature. In addition, because we hold that Act 160 is preempted by the Atomic Energy

Act , the Board will no longer be able to consider the studies mandated by Act 189. See Entergy Nuclear , 838 F.
Supp. 2d at 233.46

B. Dormant Commerce Clause Claim 1

2

Entergy argues that Vermont’s efforts to condition the approval of a new CPG for 3

Vermont Yankee on the execution of a new PPA (to replace the 2001 PPA) represent s a demand 4

“that Entergy provide more favorable rates to in

- state than out

- of

- state ret ail utilities” in 5

contravention of the dormant Commerce Clause. The district court agreed

, after examining 6

materials submitted by the Department to the Board

, statements by state legislators and 7

regulators during committee meetings

, and floor debates in the Vermont Legislature advocating 8

for a new favorable PPA. Entergy Nuclear , 838 F. Supp. 2d at 236

- 39. T he district court found 9

“ evidence of intent to condition continued operation [of Vermont Yankee] on the demonstration 10

of some mar ked ‘ economic benefit, ’ or ‘ incremental value, ’ beyond that reflected in market rates 11

for long

- term contracts, in the form of below

- wholesale

- market long

- term power purchase 12

agreements for Vermont utilities

. ” I d. at 236 . The district court held that this c onduct violate d the 13

dormant Commerce Clause. Vermont argues , however, that the district court erred in issuing an 14

injuncti on on the basis of its finding mere intent on the part of the defendants to seek a favorable 15

PPA, and that the issue was therefore not ripe for judicial review. We agree. 16

17

The “basic rationale” of the ripeness doctrine is to “prevent the courts, through avoidance 18

of premature adjudication, from entangling themselves in abstract disagreements over 19

administrative policies, and also to prot ect the agencies from judicial interference until an 20

administrative decision has been formalized and its effects felt in a concrete way by the 21

challenging parties.” Abbott Labs. v. Gardner , 387 U.S. 136, 148

- 49 (1967), overruled on other 22

grounds by Califan o v. Sanders , 430 U.S. 99 (1977). R ipeness encompasses two overlapping 23

doctrine s concerning the exercise of federal court jurisdiction. See Reno v. Catholic Soc. Servs., 24

Inc. , 509 U.S. 43, 57 n.18 (1993). The first of these is drawn from “Article III limit ations on 25

judicial power,” id. , and “hence goes, in a fundamental way, to the existence of jurisdiction.” 26

Simmonds v. INS , 326 F.3d 351, 357 (2d Cir. 2003). “The second is a more flexible doctrine of 27

judicial prudence, and constitutes an important exceptio n to the usual rule that where jurisdiction 28

exists a federal court must exercise it.” Id. In either case, “the question of ripeness may be 29

considered on a court’s own motion.” Nat’l Park Hospitality Ass’n v. Dep’t of Interior , 538 U.S. 30

803, 808 (2003). 3147

1

“Constitutional ripeness is a doctrine that, like standing, is a limitation on the power of 2

the judiciary. It prevents courts from declaring the meaning of the law in a vacuum and from 3

constructing generalized legal rules unless the resolution of an actual dispute requires it.” N.Y. 4

Civil Liberties Union v. Grandeau , 528 F.3d 122, 131 (2d Cir. 2008) (internal quotation marks 5

omitted). T he district court held that Vermont’s efforts to secure favorable pricing for its in

- state 6

retail utilities violated the pr ohibition discussed in New England Power Co. v. New Hampshire

, 7

455 U.S. 331, 335

- 36 (1982), against providing “residents an ‘economic benefit’ not available to 8

customers in other states.” Entergy Nuclear

, 838 F. Supp. 2d at 239. However, we believe that 9

th e district court erred in applying this “generalized legal rule” in the absence of a fully

- formed 10

PPA. 11

12

The dormant Commerce Clause, a doctrine inferred from the Commerce Clause of the 13

United States Constitution, see U.S. Const

. art. I, § 8 cl. 3 , is a “restriction on permissible state 14

regulation.” Hughes v. Oklahoma , 441 U.S. 322, 326 (1979). The dormant Commerce Clause 15

stands for the “principle that one state in its dealings with another may not place itself in a 16

position of economic isolation.” H.P. Hood & Sons, Inc. v. DuMond , 336 U.S. 525, 538 (1949) 17

(internal quotation marks omitted). A state law may burden interstate commerce when it “has the 18

practical effect of requiring out

- of

- state commerce to be conducted at the regulating state’s 19

direct ion.” Am. Booksellers Found. v. Dean , 342 F.3d 96, 102 (2d Cir. 2003) (internal quotation 20

marks omitted). When a statute “directly controls commerce occurring wholly outside the 21

boundaries of a State,” it is invalid under the dormant Commerce Clause becaus e it “exceeds the 22

inherent limits of the enacting State’s authority.” Healy v. Beer Inst. , 491 U.S. 324, 336 (1989). 23

“The transmission of electric current from one state to another . . . is interstate commerce” 24

subject to the Commerce Clause. Pub. Utils. C omm’n of R.I. v. Attleboro Steam & Elec. Co. , 273 25

U.S. 83, 86 (1927)

, abrogated on other grounds by Quill Corp

. v. North Dakota ex rel. 26

Heitkamp , 504 U.S. 298 (1992)

. 27

28

The district court largely based its conclusion on the Supreme Court’s decision in New 29

England Power

, which considered a n order of a New Hampshire regulatory commission 30

prohibit ing a n in

- state power plant from exporting some of its output to out

- of

- state retail utilities 3148

in an effort to reduce prices for in

- state consumers. 455 U.S. at 335

- 36 . The Supreme Court 1

stated that the Commerce Clause “precludes a state from mandating that its residents be given a 2

preferred right of access, over out

- of

- state consumers, to natural resources located within its 3

borders or to the products derived the refrom.” Id. at 338. On this basis, the Court held that New 4

Hampshire’s “exportation ban” constituted “precisely the sort of protectionist regulation that the 5

Commerce Clause declares off

- limits to the states

, ” because it was “designed to gain an 6

economic advantage for New Hampshire citizens at the expense of [the power plant’s] customers 7

in neighboring states.” Id. at 339. 8

9

The order at issue in New England Power did not violate the dormant Commerce Clause 10

simply because it conferred an economic benefit o n New Hampshire residents, however. Rather, 11

by preventing a power plant from exporting its output to other states, the effect of the order was 12

to “overtly block[] the flow of interstate commerce at a State’s borders.” City of Phila. v. New 13

Jersey , 437 U.S. 617, 624 (1978). Such laws have “the undeniable effect of controlling 14

commercial activity occurring wholly outside the boundary of the State.” Healy , 491 U.S. at 337. 15

“While a State may seek lower prices for its consumers, it may not insist that producers or 16

consumers in other States surrender whatever competitive advantages they may possess.” Brown

17

Forman Distillers Corp. v. N.Y. State Liquor Auth. , 476 U.S. 573, 580 (1986). Although the 18

record shows that Vermont was interested in obtaining favorable pricing for the power produced 19

by Vermont Yankee for Vermont retail utilities, it does not show that Vermont was also seeking 20

to prevent retail utilities in other states from negotiating favorable rates wi th Entergy as well. Cf. 21

SPGGC, LLC v. Blumenthal , 505 F.3d 183, 194 (2d Cir. 2007) (holding that a statute prohibiting 22

the in

- state sale of certain types of “gift certificate s ” did not violate the dormant Commerce 23

Clause because it did “not, by its terms o r its effects, directly regulate sales of gift cards in other 24

states . . .

. [or] prevent other states from regulating gift card sales differently within their own 25

territories”). The record also does not demonstrate that Vermont sought to impose a 26

“prohibi tion[] on out

- of

- state access to in

- state resources,” Camps Newfound/Owatonna, Inc. v. 27

Town of Harrison, Me. , 520 U.S. 564, 57 8 (1997), by limiting the extent to which Vermont 28

Yankee could sell power to other states, as was the case in New England Power

. 29

3049

At present, in the absence of a completed PPA and without evidence regarding its effect 1

on out

- of

- state power consumers, we cannot determine whether the PPA Vermont has sought 2

will have a direct impact on commerce in other states. We also do not have a fa ctual record 3

concerning incidental effects of such an agreement on interstate commerce and the 4

commensurate benefits of the agreement within Vermont. Entergy’s claim cannot be 5

characterized as “purely legal” in that it “may be decided without further factu al development.” 6

Gary D. Peake Excavating Inc. v. Town Bd. of Town of Hancock , 93 F.3d 68, 72 (2d Cir. 1996). 7

This case therefore does not present a “concrete dispute affecting cognizable current concerns of 8

the parties within the meaning of Article III,” and is therefore not “ripe within the constitutional 9

sense.” Ehrenfeld v. Mahfouz , 489 F.3d 542, 546 (2d Cir. 2007) (internal quotation marks 10

omitted)

. 11

12

Of course, we do not suggest that any PPA providing favorable pricing for Vermont 13

residents would pass muster under the dormant Commerce Clause. A regulation that “evinces” 14

discriminatory purpose against interstate commerce , “or unambiguously discriminates in its 15

effect . . . almost always is ‘invalid per se

. ’” Brown & Williamson Tobacco Corp. v. Pataki , 320 16

F.3d 200, 209 (2d Cir. 2003) (quoting Nat’l Elec. Mfrs. Ass’n v. Sorrell , 272 F.3d 104, 108 (2d 17

Cir. 2001) )

. For example , an agreement requiring Entergy “to seek regulatory approval in 18

[Vermont] before undertaking a transaction in another” state woul d likely be per se invalid under 19

the dormant Commerce Clause. Brown

- Forman , 476 U.S. at 582; see also Baldwin v. G.A.F. 20

Seelig, Inc. , 294 U.S. 511, 521 (1935) (holding that one state “has no power to project its 21

legislation into [another state] by regulati ng the price to be paid in that state for [products] 22

acquired there”). It is also likely that Vermont could not require Entergy to “affirm that [its] 23

prices are no higher than the prices being charged in [other] states.” Healy , 491 U.S. at 335. A n 24

agreement requiring Vermont Yankee to allot a certain percentage of it output to satisfy local 25

demand would also likely violate the dormant Commerce Clause. See New Eng. Power , 455 U.S. 26

at 338

- 39. 36 Finally

, we note that a facially

- neutral statute that im pose s an incidental “burden on 27

interstate commerce incommensurate with the local benefits secured,” Nat’l Elec. Mfrs. Ass’n

, 28

36 Agreements of this nature would be “scrutinized strictly, i.e. , ‘the burden falls on the State to justify [the

discrimination] bo th in terms of the local benefits flowing from the statute and the unavailability of nondiscriminatory alternatives adequate to preserve the local interests at stake.’” Brown & Williamson , 320 F.3d at
209 (quoting Hunt v. Wash. State Apple Advertising Comm’n , 432 U.S. 333, 353 (1977)).50

272 F.3d at 108, would fail the balancing test articulated by the Supreme Court in Pike v. Bruce 1

Church, Inc. , 397 U.S. 137 , 142 (1970). 37 2

3

However, no agreement is before us. Accordingly, the analysis required under the 4

dormant Commerce Clause may not be performed, and so Entergy’s claim is unripe at this time

. 5

Cf. Middle S. Energy, Inc. v. City of New Orleans , 800 F.2d 488, 491 (5 th Cir. 1986) (“ When and 6

how the Council exercises its option, if it ever does, are the critical determinants of the propriety 7

of federal court jurisdiction over this matter. Until the City Council actually votes to exercise the 8

purchase option, we must be careful to ‘ avoid imposition under [our] jurisdiction through 9

obtaining futile or premature interventions, especially in the field of public law. ’ ” (quoting Pub. 10

Serv. Comm’n of Utah v. Wycoff Co. , 344 U.S. 237, 243 (1952))). We therefore vacate the 11

distr ict court’s grant of a permanent injunction enjoining the defendants from conditioning a new 12

CPG for Vermont Yankee on the execution of a favorable PPA. 38 13

14

C. Federal Power Act Claim 15

16

Under the Federal Power Act, FERC has jurisdiction over “the transmission of electric 17

energy in interstate commerce and . . . the sale of electric energy at wholesale in interstate 18

commerce.” 16 U.S.C. § 824(b)(1). FERC’s authority includes “exclusive juri sdiction over the 19

rates to be charged [a utility’s] interstate wholesale customers.” Nantahala Power & Light Co. v. 20

Thornburg , 476 U.S. 953, 966 (1986). This authority is exclusive, “without regard to the source 21

of production.” New Eng

. Power , 455 U.S. at 340. After a rate has been approved by FERC, “a 22

State may not conclude in setting retail rates that the FERC

- approved wholesale rates are 23

unreasonable. A State must rather give effect to Congress’ desire to give FERC plenary authority 24

37 A statute or regulation would discriminate against commerce itself when the statute

(i) shifts the costs of regulation onto other states, permitting in

- state lawmakers to avoid the costs
of their political decisions, ( ii) has the practical effect of requiring out

- of

- state commerce to be
conducted at the regulating state's direction, or (iii) alters the interstate flow of the goods in
question, as distinct from the impact on companies trading in those goods.

Am. Booksellers Found. v. Dean , 342 F.3d 96, 102 (2d Cir. 2003) (internal quotation marks omitted).

38 Because we vacate the district court’s grant of an injunction regarding Entergy’s dormant Commerce Clause
claim, we need not address the question of whether E ntergy’s suit sought to enjoin the proper officials under Ex

Parte Young , 209 U.S. 123 (1908), and Verizon Maryland Inc. v. Public Service Commission of Maryland , 535 U.S.

635 (2002).51

over interstate whole sale rates, and to ensure that the States do not interfere with this authority.” 1

Nantahala , 476 U.S. at 966. Under the filed

- rate doctrine, “the right to a reasonable rate is the 2

right to the rate which [FERC] files or fixes, and that, except for review of [FERC’s] orders, the 3

court s can assume no right to a different one on the ground that, in its opinion, it is the only or 4

the more reasonable one.” Mont.

- Dakota Utils. Co. v. Nw. Pub. Serv. Co. , 341 U.S. 246, 251

- 52 5

(1951). The filed

- rate doctrine applies with equal force to federal and state courts. See Ark. La. 6

Gas Co. v. Hall , 453 U.S. 571, 581

- 82 (1981). The filed

- rate doctrine also applies to efforts by 7

state regulators to modify the terms of a FERC

- mandated rate determination or cost allocation. 8

See E

ntergy La., Inc. v. La. Pub. Serv. Comm’n , 539 U.S. 39, 47

- 49 (2003). 9

10

In recent years, FERC has “encouraged transmission providers to establish ‘Regional 11

Transmission Organizations’

– entities to which transmission providers would transfer 12

operational co ntrol of their facilities for the purpose of efficient coordination.” Morgan Stanley 13

Cap ital Grp. , 554 U.S. at 536. Regional transmission organizations (RTOs), in turn, are managed 14

by “independent system operators” (ISOs), which are nonprofit entities that coordinate the 15

transmission of power and auctions for energy across regional markets. Id. at 536

- 37 (citing 16

M idwest ISO Transmission Owners , 373 F.3d at 136 4 ). To accommodate the development of 17

regional power markets, FERC “has begun to permit sellers of wholesale electricity to file 18

‘market

- based’ tariffs,” which, “instead of setting forth rate schedules or rate

- fixing contracts, 19

simply state that the seller will enter into freely negotiated contracts with purchasers.” Id. at 537. 20

In Simon v. KeySpan Corp.

, we held that there was “no need for us to decide whether the filed 21

rate doctrine always applies to market

- based auction rates.” 694 F.3d 196, 204

- 05 (2d Ci r. 2012). 22

However, when the doctrine does apply, as when the auction process for establishing market

23

based rates is adequately safeguarded by FERC, a plaintiff’s claim that the rates for energy are 24

unreasonable is barred by the filed

- rate doctrine. Id. at 207

- 08. 25

26

Entergy argues that Vermont’s efforts to obtain a favorable PPA violate the market

- based 27

tariff approved by FERC for the New England regional wholesale market. According to Entergy, 28

c apping the prices it can charge Vermont residents would interfe re with the rates FERC has 29

approved for the market, and so the PPA is “preempted” under the filed

- rate doctrine. However, 30

the market

- based tariff approved by FERC for Vermont Yankee states only that Entergy “may 3152

sell electric energy and capacity from time to time at rates, terms and conditions established by 1

agreement with the purchaser . . . . All such transactions shall be voluntary.” The market

- based 2

tariff’s only other guidance on rates is that “[a]ll sales shall be made at rates established by 3

agreemen t between the purchaser and E ntergy Nuclear VY.” 4

5

We agree with the district court’s determination that this claim is not ripe. In addition to 6

the fact that a new favorable PPA has not yet been executed, Entergy has not sought a 7

determination from FERC ab out whether the terms of such a PPA would violate the market

8

based tariff. 39 Because FERC has the exclusive jurisdiction to “determine just and reasonable 9

wholesale rates or to insure that agreements affecting wholesale rates are reasonable,” Entergy’s 10

recourse should be first to FERC to determine whether the PPA

– if and when exe cuted

– 11

complies with this standard. See Miss. Power & Light Co. v. Miss. ex rel. Moore , 487 U.S. 354, 12

374 (1988); see also In re Permian Basin Area Rate Cases , 390 U.S. 747, 767 (1968) (“[C]ourts 13

are without authority to set aside any rate selected by the Commission which is within a ‘zone of 14

reasonableness.’” (quoting Fed. Power Comm’n v. Natural Gas Pipeline Co. of Am. , 315 U.S. 15

575, 585 (1942)) (emphasis added)) ; Pub. Util. Dist. No. 1 of Snohomish Cnty. v. Dynergy Power 16

Mktg., Inc. , 384 F.3d 756, 761

- 6 2 (9th Cir. 2004) (holding that a utility may not seek injunctive 17

relief alleging manipulation of FERC

- approved market based tariffs because doing so would 18

“encroach[] upon the substantive provisions of the tariff, an area reserved exclusively to FERC, 19

bot h to enforce and to seek remedy” (internal quotation marks omitted)) ; Cal. Pub. Utils. 20

Comm’n , 132 FERC ¶ 61,047, at *17 (“The Commission’s authority under the [Federal Power 21

Act] includes the exclusive jurisdiction to regulate the rates, terms and conditions of sales for 22

resale of electric energy in interstate commerce by public utilities.” (emphasis added)), clarified 23

on reh’g , 133 FERC ¶ 61,059 (2010)

. We therefore agree with the district court that Entergy’s 24

clai m under Count Two is unripe at the present time

. Entergy Nuclear , 838 F. Supp. 2d at 234

- 25

35. 26

27

28

39 Entergy also has not offer ed an explanation for why it did not seek re view of the 2001 PPA before FERC, and the record does not reveal any prior attempts to do so. Nonetheless, FERC’s “passive permission for a rate to go into effect does not constitute a finding that the rate is just and reasonable,” as required by the Feder al Power Act
pursuant to 16 U.S.C. § 824d(a). See Morgan Stanley Capital Grp. , 554 U.S. at 546.53 CONCLUSION 1

2

For the reasons stated above, we AFFIRM the district court’s grant of a declaratory 3

judgment that Act 74 and Act 160 are facially preempted by the Atomic Energy Act. We 4

REVERSE the district court’s determination that Vermont’s efforts to condition a new 5

Certificate of Public Good for Vermont Yankee on the execution of a favorable p ower purchase 6

agreement violate the dormant Commerce Clause. We AFFIRM the district court’s determination 7

that Entergy’s challenge under the Federal Power Act is unripe. W e AFFIRM the district court’s 8

grant of a permanent injunction enjoining the defendants from enforcing sections 6522(c)(2) or 9

6522(c)(4) in title 10 of the Vermont Statutes, as enacted by Act 74

, or sections 248(e)(2), 10

248(m), or 254 in title 30 of the Vermont Statutes, as enacted by Act 160 . Finally, we VACATE 11

the district court’s permanent injunction enjoining the defendants from conditioning the issuance 12

o f a Certificate of Public Good on the execution of a below

- wholesale

- market power purchase 13

agreement between Entergy and Vermont utilities or otherwise requiring Vermont Yankee to sell 14

power to Vermont utilities at preferential rates. 15S USAN L. C ARNEY

, Circuit Judge , concurring:

I concur

, reluctantly, in the m ajority’s detailed and carefully reasoned

opinion striking down Vermont Acts 74 and 160

. My reluctance stems not from any

flaw in the m ajority’s analysis , but rather from my concern that Congress, in

enacting the Atomic Energy Act (“AEA”)

, d id not intend the result we reach

.

Rather, w e are led to our conclusion principally by an expansive gloss on the

preemptive scope of the AEA first set forth in Pacific Gas & Electric Co. v. State

Energy Resources Conservation & Development Commission , 461 U.S. 190 (1983)

(“ Pacific Gas ”) . There, the Supreme Court instructed that “[a] state mor atorium on

nuclear construction grounded in safety concerns falls squar ely within the

prohibited field ” and would therefore be preempted

. I d. at 213 (emphasis added).

As Judge Droney persuasively demonstrates, the S tate legislative record

before us is “replete with references to radiological safety

. ” Maj. Op. at 37

. N o

reader of th is record can fairly claim that the statutes at issue were not “grounded

in safety concerns.” Pacific Gas , 461 U.S. at 213. Acts 74 and 160 t herefore run

afoul of the dictate of Pacific Gas

.

And yet, in Pacific Gas , the Court uph e ld a S tate moratorium on the

construction of nuclear power plants, declin ing to look too closely at the S tate’s

motivation. Cognizant of that setting, we might feel free to discount the “grounded

in safety concerns” phrase as merely a stray comment

. But it undeniably captures

the full thrust of the Court’s opinion : in Pacific Gas

, the Court stresse d that “[a]

state prohibition on nuclear construction for safety reasons would

. . . be in the teeth2

of the Atomic Energy Act’s objective to insure that nuclear technology be safe

enough for widespread development and use

— and would be preempted for that

reason.” Id. at 213 (emphasis added)

. And t he Pacific Gas majority pointedly

declined to accept the more tailored view of the preempted field offered by Justice

Blackmun in concurrence

, when he suggested instead that “Congress has occupied

not the broad field of ‘nuclear safety concerns,’ but only the narrower area of how a

nuclear plant should be constructed and operated to protect against radiation

hazards.” I d. at 224. Furthermore, n ot long after

, in both Silkwood v. Kerr

- McGee

Corp. , 464 U.S. 238 (1984)

, and English v. General Electric Co. , 496 U.S. 72 (1990),

the Court reiterated its allegiance to the preemption contours it drew in Pacific Gas

.

I write separately to emphasize that it is principally the judicial phrase

“grounded in safety concerns

, ” and not the Court’s holding s or the text of the Atomic

Energy Act

, that compels us to strike down Vermont’s statutes. Particularly in the

co ntext of a Congressional enactment that contains protection for State and local

interests, 42 U.S.C. § 2018, and indeed invites State

- Federal c ooperation

, id. § 2021,

it seems anomalous to conclude that nothing more than the Vermont legislature’s

expression of concern about nuclear safety is needed to invalidat e these largely

procedural statutes

.

As the Court recently observed , “Federalism, central to the constitutional

design, adopts the principle that both the National and State Governments have

elements of sovereignty the other is bound to respect.” Arizona v. United States

,

132 S.Ct. 2492, 2500 (2012)

. The “[n] eed for new power facilities, their economic3

feasibility, and rates and services, are areas that have been characteristically

governed by the States.” Pacific Gas , 461 U.S. 205; see also Frost v. Corp

. Comm’n

,

278 U.S. 515, 534 (1929) (“[A] franchise to oper ate a public utility is not like the

general right to engage in a lawful business. . . [but] is of the essence of a special

privilege that . . . may be granted or withheld at the pleasure of the state . . . .”)

(Brandeis, J. , dissenting). Repeatedly, we h ave held that w e will not find a federal

statute to supersede a State’s exercise of its the historic police powers “unless it was

‘the clear and manifest purpose of Congress’ to do so.” N.Y. SMSA Ltd. P’shi p v.

Town of Clarkstown , 612 F.3d 97, 104 (2d Cir. 2010) (per curiam) (quoting Wyeth v.

Levine , 555 U.S. 555, 565 (2009))

. But t he outcome we reach today does not, to my

mind, reflect a “clear and manifest purpose of Congress.” B ased primarily on

Vermont’s general concern for safety and public healt h rather than on any finding

that its statutes actually intru de on the field of radiological safety

, our decision

seems to me to invite a reconsideration

— one that our Court is not free to

undertake

— of the preemptive boundaries set in Pacific Gas

.

In thinking about preemption in the AEA context

, it is important to

distinguish between two categories of S tate laws. The first consists of S tate laws

that impose concrete sa fety requirements other than those imposed by the Nuclear

Reg ulatory Commission (“N RC”). A S tate requirement that nuclear power plants

use a particular type of backup generator or a particular method of protecting

against leaks fall s within this category . The second category consists of S tate laws

that do not in their language or opera tion intrude upon the field of radiological4

safety. A legislative decision to permit plant construction or to deny continued

operation of a plant at the expiration of a license period, for example, would fall into

this category.

I have no doubt tha t Congress intended to preempt S tate laws that fall

within the first category. See Pacific Gas , 461 U.S. at 211

- 12. But I am less

convinced that Congress intended to foreclose S tates from enacting laws that fall

within the second category. After all, the AEA

— w hile expressing a federal intent to

support the introduction of nuclear power

— does not require any S tate to host

nuclear power plants

. Id. at 205 (“Even a brief perusal of the [AEA] reveals that,

despite its comprehensiveness, it does not at any poin t expressly require the States

to construct or authorize nuclear powerplants or prohibit the States from deciding,

as an absolute or conditional matter, not to permit the construction of any further

reactors.”)

. I ndeed , in Pacific Gas the Court seem ed to recognize the possibility

that , consistent with the A EA

, a S tate that once agreed to the construction of a

nuclear plant within its borders might

, at an appropriate inflection point

, change

cour se. Id. at 223 ( “ [T] he legal reality remains that Congress has left sufficient

authority in the S tates to allow the development of nuclear power to be slowed or

even stopped for economic reasons.” )

.

Acts 74 and 160 fall within the second category of S tate laws

. They alter t he

State’s decision

- making process with respect to the plant. To be sure, in requiring

that Vermont Yankee obtain S tate legislative approval before it may continue

operations, they place the S tate legislature in a position to foil judicial review of its5

decision

. Maj. Op. at 44. They may thereby enable the State to reject the plant’s

bid for a new operating license based on an amalgam of concerns, including general

safety concerns

, or general safety concerns alone

. T hey do not , however, impose any

safe ty requirements at all on the plant

. To the extent Act 74 incorporates a

memorandum of understanding that imposes safety

- related requirements on

Vermont Yankee relating to cask storage , it is clearly preempted. The presence of

these few requirements , how ever, serves to highlight the limited scope of the

remaining provisions of the Acts.

The AEA does not commit every decision related to the generation of nuclear

power to the federal government; rather, it provides for “the dual regulation of

nuclear

- powered electricity.” Pacific Gas , 461 U.S . at 211

- 212. Under the A EA’s

approach , the federal government “maintains complete control of the safety and

‘nuclear’ aspects o f energy generation” while the S tates “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.” Id. at 212 (emphasis

added). Indeed, the AEA expressly provides that “[n]othing in this chapter shall be

construed to affect the authority or regulations of any Federal, State or local agency

with respect to the generation, sale, or transmission of electric power produced

through the use of nuclear facilities licensed by the [NRC].” 42 U.S.C. § 2018; see

also 42 U.S.C. § 2021(k) (“Nothing in this section shall be construed to affect the

authority of any State or local agency to regulate activities for purposes other than

protection against ra diation hazards.”). This text strongly su ggests Congress ’s6

intent that the S tates retain authority to determine whether nuclear power, or

energy from alternative sources , should be generated within their borders.

This conclusion is buttressed by what Congress omitted from the AEA. As

mentioned, t he AEA does not, either in its text or as the Supreme Court has

construed it, force a S tate to approve the construction of a nuclear power plant.

Pacific Gas , 461 U.S. at 205. Nor does the AEA, either in its text or as construed,

force a S tat e to permit the continued operation of a nuclear power plant whose

S tate

- issued operating license has expired. Id. This is so even where the NRC has

renewed the plant’s federally

- issued operating license. See, e.g. , Nuclear

Regulatory Commission Report Regarding Vermo nt Yankee Nuclear Power Station,

NUREG

- 1437, Supp. 30, Vol. 1 at § 1.4 (Aug. 2007) (“Once an OL [Operating

License] is renewed [by the NRC], State regulatory agencies and the owners of the

plant will ultimately decide whether the plant will continue to operate based on

factors such as the need for power or other matters within the State’s jurisdiction or

the purview of the owners. . . . [T]he NRC does not have a role in the energy

planning decisions of State regulators and utility officials a s to whether a particular

nuclear power plant should continue to operate.”).

The parties have not directed our attention to any case in which the Supreme

Court has struck down a S tate statute or tort judgment on AEA preemption. In

Pacific Gas , 461 U.S. a t 222

- 23, the Court upheld California’s moratorium on

nuclear construction , accepting, in the face of competing explanations, California’s

avowed financial concerns as the rationale for the legislation . In Silkwood v. Kerr

-7

McGee Corp. , 464 U.S. 238, 249 ( 1984), the Court found that a “state

- authorized

award of punitive damages” against the operator of a nuclear power plant for

contamination

- related injuries did not “fall[ ] within the prohibited field.” And in

English v. General Electric Co. , 496 U.S. 72, 86 (1990), the Court concluded that the

AEA did not preempt a s tate

- law claim for intentional infliction of emotional

distress brought against the operator of a nuclear power plant and arising out of

perceived violations of nuclear

- safety st andards

.

Further, as a practical matter

, it seems impossible to divorce safety concerns

from a ny S tate legislature’s consideration of whether to allow, or continue to allow,

the generation of nuclear power within its borders

. Even l egislation that is

o stensibly oriented solely to economic concerns

— and therefore within the AEA’s

savings clause as interpreted in Pacific Gas

— can be expected to have some bearing

on plant safety

. But this should not doom the statute. A s Justice Blackmun wrote

in his Pacific Gas concurrence , “There is no evidence that Congress had a ‘clear and

manifest purpose’ to force States to be blind to whatever special dangers are posed

by nuclear plants.” 461 U.S. at 225 (citation omitted). To conclu de that S tate

legislative history reflecting concern

— even a primary concern, Maj. Op. at 35

—

about nuclear safety is enough to invalidate a statute , even absent an actual conflict

with fed eral regulatory requirements or meaningful intrusion into the field

, could

effectiv ely disable the S tate s f rom ena cting legislation in the real m of nuclear

energy production . I am aware of no basis for concluding that Congress made such

a choice.8

P lacing decisive empha sis on motivation to the exclusion of impact

, as we do

here

, also creates an irresistible incentive for States to do their best to mask their

concerns about safety

. Further, t he prominence of safety c oncerns in the record

before us regrettably overshadows the legislature ’ s attempt to address economic

issues, ones that the AEA’s savings clause protects . The original rationale

supporting the savings clause ’s protection for State economic legislation

, see Pacific

Gas , 461 U.S. at 207, may have been undermined by the advent of the “merchant

generator

, ” see Maj. Op. at 25

- 26. But, while Vermont Yankee provides energy

across S tate lines, only the citizens of Vermont are faced with the fiscal

consequences of the adequacy or inadequacy of Entergy’s provisions to address

potential financial dissolution

. To rul e that co ncern for safety is fatal to a S tate’s

legislative initiatives is to disable the States from legislating within their borders to

respond to the legitimate economic c oncerns of their citizens

.

Thus, l ike the construction moratorium upheld in Pacific Gas , the statutes

before us “do[ ] not seek to regulate the construction or operation of a nuclear power

plant. ” 461 U.S. at 212. Unfortunately for Vermont, our analysis cannot end there.

As discussed above, u nder Pacific Gas , “[a] state morator ium on nuclear

construction grounded in safety concerns falls squarely within the prohibited field.”

Id. at 213. Were I writing on a blank slate, I would be inclined to conclude that a

S tate’s c oncerns for safety do not preempt its efforts to change its decision

- making

process or its ultimate decision, at a natural inflection point in the life of a nuclear

power plan t, that it no longer wishes the plan t to operate within its borders.9

But there is no avoiding the Supreme Court’s teachings in Pacific Gas

. Th e

statute s before us are preempted , and I therefore must concur

.