Trial begins for Entergy's suit against Vermont for refusing to grant its Vermont Yankee nuclear power plant 20-year permit needed to operate past March 2012; federal regulators already extended plant license

BRATTLEBORO, Vermont , September 12, 2011 () – Nuclear plant owner and state of Vermont square off at trial over its future

An executive at the company that owns Vermont's only nuclear power plant told a federal judge Monday that he felt heavy pressure from state officials to sell power at a price favorable to Vermont utilities if his company wanted the state to allow the plant to continue operating.

The testimony by Marc Potkin, a vice president at Entergy Corp., came on the first day of a trial in which Entergy is suing the state for refusing to grant the Vermont Yankee nuclear plant the 20-year permit it needs to operate past next March.

Entergy says its federal license extension, granted by the Nuclear Regulatory Commission in March, pre-empts the state's decision.

On Monday, Potkin said Vermont utility executives told him they needed bargain rates to buy nuclear power from Vermont Yankee or they would not expect the state to allow the plant to continue running.

Legislators and executive-branch officials had said previously that a favorable agreement over power would be a condition of the state renewing the operating permit, but Potkin's testimony provided the first public glimpse of how that demand played out in the secret talks, which never produced an agreement.

Entergy has come into widespread disfavor in Vermont, especially since it was revealed last year that radioactive tritium was leaking from underground pipes at the plant -- pipes of a sort that Vermont Yankee officials had said the plant didn't have.

A month after that revelation, the state Senate voted against allowing the state to grant the plant a new state license. Vermont is the only state with a law calling on the Legislature to weigh in on whether such a permit should be issued.

The plant's flagging political fortunes influenced the talks on the power-purchase agreement, Potkin said. He was eventually told the electric companies wouldn't sign a deal to buy power from the plant unless Entergy sold it. Entergy put it on the market last year, but got no takers.

In her opening statement Monday, Entergy lawyer Kathleen Sullivan said Vermont was trying to close the plant because of concerns about the safety of the reactor. But, she said, the state is pre-empted from doing that because under federal law, nuclear safety is in the sole jurisdiction of the NRC. She said the state would offer other reasons -- concern about the plant's reliability and economic impacts, for instance -- but that those were "pretexts for nuclear safety."

Entergy is also arguing that since it will be selling power from Vermont Yankee into the wholesale power market and not to Vermont utilities, the state should have little or no role in regulating it.

Assistant Attorney General Scot Kline, arguing for the state, said New Orleans-based Entergy signed an agreement saying it would agree to state oversight when it bought the plant from a group of New England utilities in 2002.

"This case is really about honoring commitments," he said.

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