ENTERGY NUCLEAR VERMONT YANKEE, LLC, Entergy Nuclear Operations, Inc., Plaintiffs-Appellees-Cross-Appellants,
Peter SHUMLIN, in his official capacity as Governor of the State of Vermont, William Sorrell, in his official capacity as Attorney General of the State of Vermont, James Volz, in his official capacity as a member of the Vermont Public Service Board, John Burke, in his official capacity as a member of the Vermont Public Service Board, David Coen, in his official capacity as a member of the Vermont Public Service Board, Defendants-Appellants-Cross-Appellees.
Argued: Jan. 14, 2013.
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Kathleen M. Sullivan, Faith E. Gay, Robert C. Juman, Sanford I. Weisburst, William B. Adams, Ellyde Roko, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY; Marcus V. Brown, Wendy Hickok Robinson, Entergy Services, Inc., New Orleans, LA; Timothy A. Ngau, Entergy Services, Inc., Jackson, MS; Robert B. Hemley, Matthew B. Byrne, Gravel and Shea PC, Burlington, VT, for Plaintiffs-Appellees-Cross-Appellants Entergy Nuclear Vermont Yankee, LLC, and Entergy Nuclear Operations, Inc.
David C. Frederick, Scott H. Angstreich, William J. Rinner, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, D.C.; William H. Sorrell, Attorney General for the State of Vermont, Scot L. Kline, Bridget C. Asay, Kyle H.
Landis-Marinello, Assistant Attorneys General for the State of Vermont, Montpelier, VT, for Defendants-Appellants-Cross-Appellees Peter Shumlin, William H. Sorrell, James Volz, John Burke, and David Coen.
Martin S. Kaufman, Atlantic Legal Foundation, Larchmont, NY, for amici curiae William Anders, Jerome I. Friedman, Sheldon L. Glashow, Roy J. Glauber, Dudley R. Herschbach, Mujid S. Kazimi, Bahram Nassersharif, Neil E. Todreas, and Richard Wilson in support of Plaintiffs-Appellees-Cross-Appellants.
Patricia A. Millett, Ruthanne M. DeutschJames E. Tysse, Akin Gump Strauss Hauer & Feld LLP, Washington, DC; John B. Capehart, Akin Gump Strauss Hauer & Feld LLP, Dallas, TX; Robin S. Conrad, Rachel Brand, National Chamber Litigation Center, Inc., Washington, DC, for amicus curiae Chamber of Commerce of the United States of America in support of Plaintiffs-Appellees-Cross-Appellants.
Caroline S. Earle, Ellis Boxer & Blake, Montpelier, VT, for amicus curiae International Brotherhood of Electrical Workers, Local Union 300 in support of Plaintiffs-Appellees-Cross-Appellants.
Peter D. Keisler, Quin M. Sorenson, Joshua J. Fougere, Sidley Austin LLP, Washington, DC; Ellen C. Ginsberg, Nuclear Energy Institute, Inc., for amicus curiae Nuclear Energy Institute, Inc. in support of Plaintiffs-Appellees-Cross-Appellants.
Richard A. Samp, Cory L. Andrews, Washington Legal Foundation, Washington, DC, for amicus curiae Washington Legal Foundation in support of Plaintiffs-Appellees-Cross-Appellants.
Sandra Levine, Conservation Law Foundation, Montpelier, VT; Jared Margolis, New England Coalition, Brattleboro, VT; Jamey Fidel, Paul Brierre, Vermont Natural Resources Council, Montpelier, VT; James Dumont, Vermont Public Interest Research Group, Montpelier, VT, for amici curiae Conservation Law Foundation, New England Coalition, Vermont Natural Resources Council, and Vermont Public Interest Research Group in support of Defendants-Appellants-Cross-Appellees.
Steven F. Huefner, The Ohio State University, Moritz College of Law, for amicus curiae National Conference of State Legislatures in support of Defendants-Appellants-Cross-Appellees.
Eric T. Schneiderman, Attorney General of the State of New York, Barbara D. Underwood, Solicitor General, Monica Wagner, Deputy Bureau Chief, Environmental Protection Bureau, Denise A. Hartman and Andrew B. Ayers, Assistant Solicitors General of Counsel, Albany, NY, for amici curiae States of New York, Connecticut, Iowa, Maryland, Massachusetts, Mississippi, Missouri, New Hampshire, and Utah in support of Defendants-Appellants-Cross-Appellees.
Before: CARNEY and DRONEY, Circuit Judges, and GARDEPHE, District Judge.[*]
DRONEY, Circuit Judge:
Entergy Nuclear Vermont Yankee, LLC, and Entergy Nuclear Operations, Inc., (collectively, " Entergy" )  own and operate
the Vermont Yankee Nuclear Power Station (" Vermont Yankee" ), a nuclear power plant in Vernon, Vermont. Entergy brought suit in the United States District Court for the District of Vermont against the Governor and Attorney General of the State of Vermont and the members of the Vermont Public Service Board in their official capacities (collectively, " Vermont" ), and asserted three claims. Count One alleged that three recently enacted Vermont statutes governing Vermont Yankee— Acts 74, 160, and 189— concerned issues of radiological safety and thus were preempted by the federal Atomic Energy Act. Count Two alleged that Vermont had attempted to condition its grant of permission to operate Vermont Yankee on the execution of a power purchase agreement that favored Vermont retail consumers, and that this attempt was preempted by the Federal Power Act. Count Three asserted that these same actions with respect to the power purchase agreement also violated the dormant Commerce Clause of the United States Constitution. Following a bench trial, the district court (Murtha, J.) found in favor of Entergy as to Count One with respect to Acts 74 and 160 and found the challenge to Act 189 to be moot. The district court also found in favor of Entergy as to Count Three. Lastly, the district court found Count Two to be premature. We affirm the district court as to Counts One and Two, and reverse the district court as to Count Three.
We summarize here those findings of fact relevant to this appeal that were made by the district court following the bench trial.
I. The History of Vermont Yankee
In 1972, Vermont Yankee opened and began operating under the ownership and management of the Vermont Yankee Nuclear Power Corporation (VYNPC), a joint venture of eight New England retail electric utilities. Among the eight members of the joint venture were two Vermont electric companies (Central Vermont Public Service and Green Mountain Power), which owned a collective fifty-five percent share of Vermont Yankee. Vermont Yankee had been granted a forty-year Facility Operating License by the Atomic Energy Commission, the federal agency that preceded the Nuclear Regulatory Commission (NRC). The forty-year license was to expire on March 21, 2012.
In 1999, VYNPC sought to sell Vermont Yankee. After an initial bid by one firm was rejected by the Vermont Public Service Board (the " Board" ), Entergy submitted a bid for Vermont Yankee in the summer of 2001 and sought a " certificate of public good" (CPG), a license from the Board to continue to operate Vermont Yankee under Vermont state law. As it was negotiating with the Board, Entergy entered into a memorandum of understanding
(MOU) (the " 2002 MOU" ) with the Vermont Department of Public Service (the " Department" ). The 2002 MOU incorporated a power purchase agreement (PPA) Entergy executed in 2001 (the " 2001 PPA" ) that promised Vermont retail electric utilities favorable pricing terms for the purchase of power from Vermont Yankee until 2012. Entergy maintains it agreed to the 2001 PPA because it feared that the Department would not otherwise recommend a CPG for Vermont Yankee. Entergy also agreed in the 2002 MOU to " waive any claim ... that federal law preempts the jurisdiction of the Board."
On June 13, 2002, the Board approved the sale of Vermont Yankee to Entergy and issued a new CPG. In its Decision and Final Order, the Board stated that the sale of Vermont Yankee to Entergy would " promote the general good" in part because, " under most reasonably foreseeable scenarios, the transactions are highly likely to produce an economic benefit for Vermont ratepayers." In re Vt. Yankee Nuclear Power Corp., Docket No. 6545, 2002 WL 1997942, at *1 (Vt.Pub.Serv.Bd. June 13, 2002). The Order specifically endorsed the 2001 PPA because it allowed Vermont retail utilities to purchase power from Vermont Yankee at prices that " are substantially below the ‘ currently committed’ operating costs of Vermont Yankee over the remaining term of its license." Id. The Order noted that the 2001 PPA also imposed a " cap on the charges for Vermont Yankee power." Id.
In 2002, Entergy obtained from the Federal Energy Regulatory Commission (FERC) authorization to sell power into the interstate market under a market-based tariff, which remains in effect. The authorization permits Entergy to sell power wholesale through ISO-New England (" ISO-NE" ), a nonprofit independent system operator under FERC regulation that administers New England's energy markets. ISO-NE's stated responsibilities are to maintain " reliable power system operations," ensure " efficient and competitive markets," and to " administer [the] regional transmission tariff, including comprehensive regional system planning."
II. The Recent Vermont Legislation Concerning Vermont Yankee
A. Act 74: The Vermont Legislation Concerning Increased Nuclear Waste Storage by Vermont Yankee
In 2003, Entergy petitioned the Board to obtain a twenty-percent " uprate," which would allow an increase in Vermont Yankee's power output and also result in a concomitant increase in nuclear waste. See Entergy Nuclear Vt. Yankee, LLC v. United States, 95 Fed.Cl. 160, 173 (2010), aff'd in part, rev'd in part sub nom., Vt. Yankee Nuclear Power Corp. v. Entergy Nuclear Vt. Yankee, LLC, 683 F.3d 1330 (Fed.Cir.2012). Under a statute enacted in 1977— five years after Vermont Yankee first began operating— the construction of new nuclear waste storage facilities in Vermont was prohibited unless the Vermont Legislature passed a bill or joint resolution finding that the facilities promoted the " general good of the state." Vt. Stat. Ann. tit. 10, § 6501(a). However, two years later, in 1979, the Vermont Legislature
enacted an " exemption" provision stating that the requirements imposed by § 6501 do " not apply to any temporary storage by Vermont Yankee Nuclear Power Corporation of spent nuclear fuel elements or other radioactive waste at its present site." Id. § 6505.
At the same time that Entergy sought the uprate, it also entered into a new MOU (the " 2003 MOU" ) with the Department under which Entergy would pay $6 million into new " State Benefits Funds," namely the " Environmental Benefit Fund," the " Low Income Benefit Fund," and the " Entergy Fund for Economic Benefit." See Entergy Nuclear, 95 Fed.Cl. at 173-74; In re Entergy Nuclear Vt. Yankee, LLC, 232 P.U.R.4th 219, 223 (Vt.Pub.Serv.Bd. Mar. 15, 2004). The Board then issued a CPG approving the uprate on March 24, 2004. Entergy Nuclear, 95 Fed.Cl. at 188. However, Entergy also needed to obtain approval to construct the new dry cask spent nuclear fuel storage facility, even though it had recently received approval for it from the NRC. Entergy then petitioned the Board, requesting permission to expand its spent fuel storage facility. Entergy maintained that the exemption provision of section 6505 applied to the Vermont Yankee site in general, as opposed to a particular owner of the plant. The Board sought guidance from the Vermont Senate, which, in turn, obtained a letter from the Office of the Vermont Attorney General opining that section 6505 was owner-specific. See Letter from Michael McShane, Asst. Att'y Gen., to Sen. Peter Welch, Pres. Pro Tempore of the Vt. Senate, 2004 WL 1737093, at *1-2 (Apr. 30, 2004). Since Vermont Yankee had changed ownership from VYNPC to Entergy, the letter provided that Entergy would need the approval of the Vermont Legislature to add spent fuel storage capacity. Id. at *4.
In response, Entergy presented proposed legislation clarifying that section 6505 was site-specific, rather than owner-specific. This proposal failed to obtain support from the Vermont Legislature, however. The Vermont Legislature then began hearings on the bill that would eventually become Act 74.
Act 74, which was enacted on June 21, 2005, had two principal effects. First, Entergy would only need to seek a CPG from the Board before constructing storage facilities for new spent nuclear fuel, rather than the Vermont Legislature as had been required by section 6501(a). However, this CPG would remain in effect only until March 21, 2012. The second effect of Act 74 was that after March 21, 2012, the storage of any new spent nuclear fuel in Vermont would require an affirmative vote by the Vermont Legislature. If no such affirmative vote occurred, storage of nuclear waste generated from operations after March 21, 2012, would not be permitted. Thus, Vermont Yankee would have to shut down.
The post-March 21, 2012, shift of responsibility for approving the storage of spent nuclear fuel generated by Vermont Yankee from the Board to the Vermont Legislature had important ramifications. Decisions of the Board may be appealed to
the Vermont Supreme Court. Vt. Stat. Ann. tit. 30, § 12. No such review mechanism would exist for the Vermont Legislature's decision not to approve additional spent nuclear fuel storage space.
Act 74 added three new sections to title 10 of the Vermont Statutes: sections 6521, 6522, and 6523. Section 6521 outlines the Vermont Legislature's findings, including recognition of the need to develop renewable and environmentally sustainable energy sources in Vermont. Vt. Stat. Ann. tit. 10, § 6521. To support this objective, section 6521 references the state's creation of an " energy efficiency fund ... to support cost-effective investments in end-use energy efficiency resources," and a statewide energy purchasing pool with a " related program to accelerate investments in new renewable and combined-heat and power projects." Id.
Section 6522 restates the requirement that the owners of Vermont Yankee cannot construct new spent fuel storage facilities for the period up to March 21, 2012, unless they obtain a CPG from the Board. Id. § 6522(a). Section 6522 also mandates that the Board find that the owners of Vermont Yankee have adequate resources to manage spent fuel and decommission the plant, if necessary, and a plan " to remove all spent fuel from Vermont to a federally certified long-term storage facility in a timely manner," and that the owners comply with any existing MOUs with the state. Id. § 6522(b). Lastly, section 6522 states that any CPG issued by the Board pursuant to Act 74 will apply to spent nuclear fuel generated by Vermont Yankee only until March 21, 2012, which is the " end of the current operating license." Id. § 6522(c)(2). This provision states that the owners have no " expectation or entitlement to continued operation of Vermont Yankee following the expiration of its current operating license on March 21, 2012." Id. § 6522(c)(5). Section 6522(c)(4) provides that Vermont Yankee cannot store spent nuclear fuel generated after March 21, 2012, on site, unless the Vermont Legislature enacts legislation granting such permission. In the absence of any other storage options, this would effectively shut down Vermont Yankee.
Section 6523 established a " Clean Energy Development Fund" (the " Fund" ), which Entergy agreed to when it received permission for its uprate. See Vt. Stat. Ann. tit. 10, § 6523(a). Under section 6523(a), the money Entergy had promised to pay into the State Benefits Funds under the 2003 MOU would instead be paid into the Fund. The Fund's purpose is to " promote the development and deployment of cost-effective and environmentally sustainable electric power and thermal energy or geothermal resources for the long-term benefit of Vermont consumers." Id. § 6523(c). Section 6523(d) outlines various types of renewable energy investments that the Fund can undertake, such as energy projects on farms, biofuel production, and thermal energy facility development. Id. § 6523(d). Entergy estimated that its total obligation under section 6523 to the Fund would be $2.5 million per year, or about $15 million over the period from 2005 to 2012. 
Act 74 also explicitly incorporates the MOUs, including the 2002 and 2003 MOUs, as well as a new MOU executed on June 21, 2005 (the " 2005 MOU" ). Vt. Stat. Ann. tit. 10, § 6522(b)(4). The 2005 MOU mandated, inter alia, that Entergy locate the spent nuclear fuel storage pad at least one hundred feet from a floodplain, space the storage casks to permit access to individual casks " to the greatest extent possible," configure the spent-fuel pool so that high-decay heat assemblies are surrounded by low-decay heat assemblies, perform temperature monitoring and monthly manual radiation surveillance of the storage casks and report the results to the Department, not store waste generated outside Vermont on site, remove " high level" spent nuclear fuel from Vermont " as quickly as possible," and conduct a study addressing the stability of the proposed new spent nuclear fuel storage facility based upon a stated concern that an adjacent river bank might erode and collapse. See 2005 MOU at 1-2; see also Entergy Nuclear Vt. Yankee, 95 Fed.Cl. at 179; In re Entergy Nuclear Vt. Yankee, LLC, 249 P.U.R.4th 1, 2006 WL 1418626, at *48 (Vt.Pub.Serv.Bd. Apr. 26, 2006). This " flood analysis" was more extensive than that required by the NRC's licensing process for the same spent nuclear fuel storage facility and, although Entergy believed that the Board's concerns regarding the probability of a collapse were " not credible," Entergy agreed to undertake the study. In re Entergy Nuclear Vt. Yankee, LLC, 2006 WL 1418626, at *28, *51. As with the earlier MOUs, Entergy agreed to waive any federal preemption claim concerning the 2005 MOU. 2005 MOU at 3.
On June 22, 2005, the day after Act 74 went into effect, Entergy filed a petition with the Board seeking to construct a dry fuel storage facility at Vermont Yankee, which, as mentioned, the NRC had already pre-licensed. In re Entergy Nuclear Vt. Yankee, LLC, 2006 WL 1418626, at *6. In the subsequent eight months, the Board held a series of public meetings and conducted technical hearings to evaluate the petition. Id. at *6-7. The Board also received public comments, of which the " vast majority ... highlighted public concerns about the public uprate that [the Board has] previously approved, and the desire for an independent safety assessment, general nuclear safety concerns, and Vermont Yankee as a terrorist target." Id. at *9. In addition, most of those who attended the Board's public meetings " opposed the proposed dry fuel storage facility" for reasons relating to the facility's " vulnerability to natural or manmade disasters," the adequacy of dry fuel storage technology, and the potential for environmental harm. Id. at *9-10. On April 26, 2006, the Board issued an Order granting the petition until 2012, and issuing a new CPG for the construction of the storage facility. Id. at *1. The Board stated that the " most significant factor" in its decision was the " economic benefit of the facility." Id. at *5. Noting that Vermont Yankee " now provides approximately one-third of the power consumed by the state of Vermont,"  an early shutdown of the plant
due to the absence of spent nuclear fuel storage facilities would " impose substantial costs on Vermont ratepayers." Id. " Without the favorably-priced power from Vermont Yankee, Vermont utilities would need to purchase replacement power from sources that are presently expected to be more expensive over this period. Approval of the dry fuel storage facility provides a direct economic benefit to the state by preserving the power." Id. The Board estimated the likely savings to Vermont ratepayers arising from the 2001 PPA, under which Vermont Yankee power " has been sold to Vermont utilities at prices consistently below the spot-market price of energy in New England," at " approximately $61 million over the period from 2008 to 2012." Id. at *21.
B. Act 160: The Vermont Legislation Requiring State Legislative Approval To Operate Vermont Yankee After 2012
On January 25, 2006, Entergy applied to the NRC for a renewal license to operate Vermont Yankee through March 21, 2032. One week later, on February 1, 2006, the Vermont Legislature began considering the bill that would eventually become Act 160. Act 160 was passed on May 18, 2006, and provides that " a nuclear energy generating plant may be operated in Vermont only with the explicit approval of the General Assembly." Act 160, § 1(a).
Act 160 provides that, in deciding whether to approve operation of a nuclear power plant, the Vermont Legislature should consider " the state's need for power, the economics and environmental impacts of long-term storage of nuclear waste, and choice of power sources among various alternatives." Id. The preamble states that Act 160's general purpose is to provide the Vermont Legislature with the authority to determine whether to issue a new CPG for Vermont Yankee after March 21, 2012. Id. § 1(c). Act 160 would also help foster a " larger societal discussion of broader economic and environmental issues relating to the operation of a nuclear facility in the state, including an assessment of the potential need for the operation of the facility and its economic benefits, risks, and costs," and of alternative methods of power generation as well. Id. § 1(d). Act 160 also includes a stated purpose of ensuring that the evaluation of new CPGs be conducted under new cost-benefit assumptions and analyses, rather than those that supported the previous CPG. Id. § 1(e).
Act 160 adds three new sections to title 30 of the Vermont Statutes: sections 248(e)(2), 248(m), and 254. Section 248(e)(2) requires that the Vermont Legislature approve an extension of the Vermont Yankee operating lease before the Board issues a new CPG. See Vt. Stat. Ann. tit. 30, § 248(e)(2). Legislative approval for continued operation of Vermont Yankee is no longer limited to issues concerning spent fuel storage, as under section 6522(c)(4) of Act 74; rather, Act 160 requires that the Vermont Legislature approve all aspects of the continued operation of Vermont Yankee. Section 248(m) requires that the Board " evaluate the application [for a new CPG] under current assumptions and analyses" and not apply " an extension of the cost benefit assumptions and analyses forming the basis of the previous certificate of public good for the operation of the facility." Id. § 248(m). Lastly, section 254 requires that the owners
of Vermont Yankee apply for a new CPG at least four years prior to the expiration of the current CPG, and that the Board inform the Vermont Legislature of the receipt of any new CPG application. Id. § 254(a)(1)-(2). When any new CPG application is submitted, the Department is directed to engage in fact-finding with three stated objectives in mind:
(A) to facilitate public discussion of long-term economic and environmental issues relating to the operation of any nuclear facility in the state;
(B) to identify and assess the potential need for the operation of the facility and its long-term economic and environmental benefits, risks, and costs; and
(C) to assess all practical alternatives to those set forth in the applicant's petition that may be more cost-effective or that otherwise may better promote the general welfare.
Id. § 254(b)(1).
Section 254 also requires that the Department collect information relating to Entergy's " funding plans for guardianship of nuclear waste after licensure but before removal of nuclear waste from the site," plant closure procedures, and funding for emergency management systems. One subsection of section 254 requires the Department to " identify, collect information on, and provide analysis of long-term environmental, economic, and public health issues, including issues relating to dry cask storage of nuclear waste and decommissioning options." Id. § 254(b)(2)(B). The Department is further directed to report its findings to the Board and to the Vermont Legislature. Id. § 254(a)(2)-(3). The Board, in turn, is directed to consider the findings of the Department in assessing an application for a new CPG. Id. § 254(c).
C. Act 189: The Vermont Legislation Requiring State Inspections of Vermont Yankee
On June 5, 2008, then-Vermont Governor Jim Douglas signed into law Act 189, entitled " An Act Relating to a Comprehensive Vertical Audit and Reliability Assessment of the Vermont Yankee Nuclear Facility." The purpose of Act 189 was to assist the Vermont Legislature in making its determination as to whether Vermont Yankee should be permitted to operate past 2012, and to reconfirm the " obligation and authority of the general assembly to examine the reliability of the nuclear power station of Entergy Nuclear Vermont Yankee." Act 189, § 1(a). Act 189 further provides that, because Entergy was applying to extend the life of Vermont Yankee beyond its original forty-year design, the Vermont Legislature needed to assess any " reliability issues associated with operating [Entergy] for an additional 20 years after its scheduled closure in 2012." Id. § 1(b). Act 189's text also addresses concerns relating to the operating reliability of Vermont Yankee and issues relating to its performance that might arise from expanding the plant. Id. § 2.
Act 189 calls for Department inspections of Vermont Yankee's operations, such as its electrical, emergency, and mechanical systems. Id. §§ 3(a), 5(a). The Act also sets out documentation requirements and inquiries that must be undertaken by the Department relating to the installation, maintenance, and inspection of safety systems in Vermont Yankee. Id. § 4. To
maximize the public visibility of these inspections of Vermont Yankee, Act 189 creates an oversight panel consisting of experts in nuclear power appointed by the governor and the Vermont Legislature. Id. § 6. The panel's findings and evaluation of Vermont Yankee were to be reported to the Vermont Legislature, which would use this information to determine whether to extend the operating license for the plant beyond March 21, 2012. Id. § 6(d).
D. S.289: The Vermont Senate Bill That Would Have Permitted the Continued Operation of Vermont Yankee Beyond 2012, as Required by Act 160
On January 7, 2010, Entergy disclosed a leak of tritium, a decay product of nuclear energy, emanating from Vermont Yankee. Entergy stopped the leak and remediated its impact on the surrounding soil, and after a subsequent investigation, the NRC concluded that the " public's health and safety and the off-site environment were not adversely affected." A report by an independent consulting group retained by the State of Vermont concluded, on April 30, 2010, that the leak did not affect the reliability of Vermont Yankee.
At the time of the leak, the Vermont Senate was considering S.289, which was originally titled, " An Act Relating to Approval for Continued Operation of the Vermont Yankee Nuclear Power Station." S.289, if passed, would have authorized the operation of Vermont Yankee for an additional twenty years past March 21, 2012, as required by Act 160. Although the NRC granted a twenty-year renewal for the operation of Vermont Yankee on March 21, 2011, S.289 failed to pass in the Vermont ...