This morning, Entergy filed suit to keep the Vermont Yankee plant open by requiring Vermont to honor its signed contracts. The State of Vermont signed a Memorandum of Understanding with Entergy in 2002. The State has attempted to amend that contract on a one-sided basis. Entergy’s lawsuit was described in a Burlington Free Press article this morning. You can also download the filed lawsuit here.
- There’s the Parol Evidence Rule for ordinary contracts. The written contract is the ruling document.
- But this is a state, right? According to the Supreme Court, even states can’t break contracts. This goes back to the Fletcher v Peck case of 1810, where a state attempted to pass a law invalidated a contract it had signed. The Supreme Court in 1820 said the state could not do that. The precedent stands. (Last year, I noted this precedent in my blog post The Day After.)
- Finally, there’s the U.S. Constitution. According to Article 1, Section 10, no state shall pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts.
- Atomic Energy Act Preemption. Under the Supremacy Clause of the U.S Constitution, the U.S. Supreme Court held in 1983 in a case involving Pacific Gas & Electric that a state has no authority over (1) nuclear power plant licensing and operations or (2) the radiological safety of a nuclear power plant. In violation of these legal principles, Vermont has asserted that it can shut down a federally licensed and operating nuclear power plant, and that it can regulate the plant based upon Vermont’s safety concerns.
- Federal Power Act Preemption and the Commerce Clause of the U.S. Constitution. Vermont is prohibited from conditioning post-March 2012 operation of the Vermont Yankee Station on the plant’s agreement to provide power to Vermont utilities at preferential wholesale rates. The Federal Power Act preempts any state interference with the Federal Energy Regulatory Commission’s exclusive regulation of rates in the wholesale power market. The Commerce Clause of the U.S. Constitution bars a state from discriminatory regulation of private markets that favors in-state over out-of-state residents.