The Limitations of States Rights – Vermont Yankee Is Heavily Involved in Interstate Commerce
As a sworn defender of the Constitution of the United States, I believe in the importance of making decisions at the right level. Our Constitution does a wonderful job of assigning limited powers to the federal government while reserving the remaining powers to states and individuals. There is healthy tension there and room for debate and discussion on the boundaries.
One of the primary strengths of the Constitution and the union of states that it governs is the recognition that state boundaries are not absolute. The drafters recognized that taxation or other inhibitions of commerce among the various states would prevent achieving many of the benefits associated with being part of a larger, unified country. That is why Article 1, Section 8 gives the Congress of the federal government the right to regulate commerce among the various states and to ensure that “duties, imposts and excises” (i. e. taxes imposed by the federal government) are uniform among the states.
I question the constitutionality of the assertion by the Vermont state legislature that they have the right to determine whether or not Vermont Yankee should be issued a certificate of public good. Shouldn’t the people in other states that are affected by the decision be considered part of the public?
I recognize that there have been some legal cases that stretched the definition of regulating interstate commerce almost to the breaking point and I do not support stretched applications of the clause. I also recognize that electricity generation plant “public good” decisions have often been able to be made at a state level. That is logical for a generation plant in the middle of a large state or under a market construct where there is little interaction between utility systems of neighboring states.
However, Vermont Yankee does not fit the model of a state level decision. According to the Energy Information Agency, electrical power customers in Vermont purchased 5,741,000 megawatt hours of electricity in 2008 while Vermont Yankee produced 4,895,000 megawatt hours. (http://www.eia.doe.gov/cneaf/electricity/epa/epa_sprdshts.html) If the electricity produced at the plant never left the state, it would be supplying 85% of the customer demand in Vermont.
However, the contracted electricity supply arrangements are not limited to the actual location of the generator, so Vermont Yankee only supplies about 1/3 of the power sold by the state utility companies, an average of about 250 MWe out of its 620 MWe capacity. The rest of the power consumed in Vermont comes from Hydro-Quebec and a number of independent power producers who operate sources like wood chip burning steam plants, hydroelectric dams, natural gas fired combined cycle plants, and farm waste methane plants.
That means that Americans outside of Vermont have an economic interest in the continued operation of the plant. Not only does the plant sell 60% of its power outside the state, but about 2/3 of the current employees actually live outside of Vermont. They are not long distance commuters; Vermont Yankee is located on the Connecticut River, which is the border between Vermont and New Hampshire. It is also within a few miles of the Massachusetts state line.
Without demeaning the importance of the responsibility of state and local governments to make decisions that affect their citizens, I think it is important to remember why our founding fathers established a system that ensures that decisions that have a wider than state or local impact are made at a federal level where the interests among several states can be discussed and formally balanced.
It is a bit selfish of Vermont legislators and citizens to think of just their own interests in this matter. Not only is it selfish, but it is a violation of the Constitution for them to assert that right. Almost a year ago, I wrote that a major reason that the legislature passed the law was to attempt to establish a stronger negotiation position for the time after the initial Entergy supply contract expired; nothing has changed to make me change my mind about that underlying motivation.
I wonder how Vermont residents would feel if New Hampshire tried to alter its current sales tax laws so that the current tax free status only applied to New Hampshire citizens? It is good for states to be proud and protective of their prerogatives, but when their needs conflict with those of their neighbors, it is time to elevate the decision to a higher level.
Rod. Thanks for another great post on my favorite plant! Indeed, one of the things that aggravates me is that the anti-s overlook VY SUPPLYING to other states, but they are happy to talk about how other states can SUPPLY to Vermont if VY closes. For example, the VPIRG glossy pamphlet “Repowering Vermont” describes using renewables to substitute ONLY for Vermont’s part of VY’s output. The other states gonna have to take care of themselves.
But no! Actually, the other states gonna take care of us, too. In James Moore of VPIRG’s recent speeches and debates, he describes Vermont getting lots of wind power from Upstate New York. Also, Gundersen and Moore have stated that renewing the license is a twenty year solution to a 3 to 5 year problem According to them, we’ll close Yankee, and get power from the grid for 3 to 5 years while we get renewables going. They love the grid.
We are part of the grid when it suits them to talk about replacing Vermont’s share of the power with grid power, and NOT part of the grid when they describe replacing VY’s power to any place except Vermont itself.
In theory VY is a valuable asset to the local community and the country. However, this assumes that it is a world class operation.
Looking back 15 years and it was a good bet VY would operate 40 years because it has a record of excellence. However, not many thought back then it would operate for 60 years because of econmics.
So on the positive side, ENTERY has made investments to extend the life 20 years. On the negative side, ENTERY has managed to make an enemy of the state legislator where their asset is located. World class companies do not do this.
Kit P – You may be right, but I think that the real offense that Entergy has committed in the eyes of Vermont political leaders is that they have determined that they no longer want to sell state customers electricity at an enormous discount to the market price. Ever since Entergy bought the plant, they have been selling a portion of the output at 4.1 cents per kilowatt hour because they signed a long term contract to do so. However, that contract expires in 2012, and the wholesale market price for electricity in Vermont is closer to 8 or 9 cents per kilowatt hour.
I may have this wrong, but the amount of electricity covered by the current fixed rate supply contract is about 250 MWe. Assuming a 90% CF, that means that the current revenue is about $82.6 million. If the electricity is sold for the market price, the revenue could increase to about $158 million.
Even if the company splits the difference with the state, $35 million or so per year seems like an awful lot of money to pay for political “friends” so they will let you continue to operate a valuable asset that already provides far better than average wages and pays a significant quantity of taxes.
Though the company did not do itself any favors with the way that it responded to concerns about tritium, I figure that the total amount discharged to the environment is significantly less than 0.5 curies. (2.5 x 10^-6 curies per liter is the highest concentration measured for the leaking fluid. The leak rate has been reported to be about 370 liters per day. Even if that leak had been happening for a whole year before being detected and stopped, the total amount released would be just 0.35 curies.)
Just for comparison’s sake, one Canadian plant – Pickering B has a Derived Release Limit of 490,000 Terabecquerels of tritium per year. (4.9 x 10^17 becquerels ~= 13 million curies) and generally feels pretty good about keeping their releases to 200 TBq – which is still about 15 curies of tritium per day.
I just remembered that I should have posted a link to back up my assertions about the tritium release limits in Canada.
http://www.cnsc-ccsn.gc.ca/eng/mediacentre/updates/tritium_drinking_water_aug_2009.cfm
Kit – I hope that you realize just how arrogant your “of course I am right” response sounds.
What in the world is a $50 biomass plant?
That is $50 million.
And Rod, the last thing in the world I am worried about is a Naval Academy graduate thinking I am arrogant. Clearly it is something you should be proud of. The problem I have with some of you guys is that you have the expectation that others are not equally proud and see it arrogant.
So let me correct your statement. I am almost always right. It is a matter of training. However, one thing a learned doing root cause is that you do not know what you do not know. You always must be open to the possibility of not being right because there is something you missed.
I am almost always right. It is a matter of training.
An excellent way to celebrate the times you are demonstrably right is to light up a cigarette and go for a deep, satisfying draw on it while you exult in your rightness.
Please note that the preceding paragraph is an ironic comment on Kit P’s risk assessment wisdom, given his previous comments to the effect that cigarette smoking is not positively corelated to cancer risk. I personally do not advocate smoking.
Electrical power is inherently an interstate commodity (outside of Texas, which has its own grid, for reasons unknown but to history). We have 3 grids in CONUS – the Eastern Interconnect, the Western Interconnect, and the Texas Interconnect.
Nowhere is this clearer than in the smaller states of New England. Our grid is highly interconnected.
Rates were traditionally set state by state, but with the coming of ISO-NE, that changed. Even before that, our electrical transmission system was constructed without regard for political boundaries; power plants in one state power other states; at least in Massachusetts, many municipal light departments and utilities own shares of power plants in other states, the same holds true for all the states of New England. We have a regional and a national market now. What goes on in one state affects many others. Rates will undoubtedly rise in the Connecticut River Valley (the Pioneer Valley) of Massachusetts (where I live) and probably as far away as New Hampshire and Connecticut. Therefore, what Vermont does to Vermont Yankee is a very regional concern.
Thus, it makes sense that once the decision has been made to build a power plant, and the need, siting, and funding has been agreed upon, then the state regulators should butt out. This is especially the case with nuclear power plants, as construction, operation, and decommissioning have always been handled at the Federal level. Nuclear power is fundamentally a Federal affair; it is and always has been; it was “born Federal”; the regulation is at the Federal level; there are few private things more inherently Federal than a nuclear power plant. This is especially the case in a deregulated market, as regulators retain no say over generation rates, and the market determines public need. Serious questions of competence also exist, as to whether state legislators and state regulators have the depth of knowledge necessary to regulate nuclear power competently. I doubt those panicked over nanogram-scale tritium leaks can competently make these decisions.
As such, I would argue that the Congress’ intention to establish a single national regulatory regime over nuclear power and safety, as expressed in the AEA of 1954, pre-empts the State of Vermont from substantially regulating or closing VY.
Of course, local and state legislators do retain the right to take the plant, as a matter of the eminent domain, for its fair market value along with liquidated damages for interruption of tenure and interruption of peaceful and quiet enjoyment, totaling 125% – 150% of actual replacement value or fair market value, whichever is higher.
Entergy Nuclear Vermont Yankee produces only 2% of the electricity used by ISO New England. It’s a smaller, older reactor, with a design that was obsolete by the time it was built. It is not a major factor in the New England grid.
Please remember: this law was passed in 2006, by a very wide margin, and signed by the same pro-nuclear governor we still have. Entergy did not oppose the legislation in 2006, or it would not have passed so overwhelmingly, and the governor would have vetoed it, just as he has vetoed laws that would require ENVY to contribute to the decommissioning fund, which is 60% short of Entergy’s own estimates.
Entergy thought they would win the vote when it happened.
Then came a number of events that demonstrated negligence in preventive maintenance and inspection, and prevarication in testimony about offsite radiation dose, underground pipes, etc.
The future contract Entergy Nuclear offered VT utilities is for about half the amount of electricity with a (roughly) 40% price increase, compared to the existing contracts. And the new contract would be with Entergy’s overly leveraged spinoff company, still unapproved by Public Utility Boards in NY and VT.
VY is a major factor in the ISO-NE grid in the Massachusetts WCMA loadzone, as well as in Southern and Central Vermont, to a certain extent, New Hampshire, to a certain extent, and Northern Connecticut, to a certain extent. If you look at where the transmission lines are in the Connecticut River Valley, they run up the Connecticut River. Removing VY will cause overloads in the regions of Deerfield, Greenfield, Brattleboro, perhaps even Northampton and Amherst (but that old coal plant – the Northeast Utilities Mount Tom facility on the Connecticut in Easthampton, they’ll be rocking and rolling, as well as the MMWEC facility over in Ludlow…natural gas rates might surge…)
A lot of precision machining is done in the Valley, because of the legacy of the old Springfield Arsenal – not to mention Electric Boat down in Groton, and a lot of these companies – which produce highly unique products:
Tooling;
Taps and Dies;
Bearings of all sorts;
Custom machining bits;
Small, very precise metal and composite parts;
Industrial and capital equipment parts;
Nuclear power grade components;
Defense industries; there are defense contractors of all sorts in the Valley and in Connecticut, like periscopes and electro-optics masts (Kollmorgen over in Northampton) – firearms (Smith and Wesson down in Springfield) – even Sikorsky, which I think is in Connecticut – these are are likely greatly affected by electric rates. Aside from higher education (UMass/Five Colleges), and insurance (MassMutual), both of which are not very vulnerable to price hikes, the Valley’s regional economy runs on precision machining and manufacturing.
I suppose that many of these companies have been suffering with the commodity inflation that we’ve been experiencing, but they’ve held their heads high, kept their terms, and have thus far stayed afloat. An increase in electric rates will raise their cost of doing business even more. Who knows which will stay open and which will shut?
You could have a cascading collapse, not of the electric grid, but of the regional economy. Send us all back to dairy farming for Ben and Jerry’s. Moo.
Your argument is likely wrong.
The legislature is well within its rights to shutter the plant. Just as the legislature can pass any other stupid (or good) law that affects Vermont.
The plant is in Vermont, not another state. The state makes all the rules on how the plant works, what environmental regulations and tests it must satisfy, how its workers are compensated and treated, and so on.
Where the state would be constitutionally limited is passing laws about who can own the plant. Or who it employs or purchases goods from. In other words, areas directly affecting its commercial interests with the broader United States.
There is no constitutional amendment prohibiting legislative stupidity, even if it affects others in a different jurisdiction.
Here’s a question – would Vermont be within its rights to allow a company to build a 1970s-era Soviet RBMK within its borders without NRC permission?
No, it wouldn’t be.
How, then, can Vermont be within its rights to shut down a perfectly safe LWR operating within its borders without NRC permission?
I would argue that if the answer to the first question is no, then the answer to the second question should be no, as well.
I would love to have a voice in the operation of ENVY. I live downstream from the reactor in MA. All the reps and senators from this region have stated in public that they oppose the relicense of ENVY for another 20 yrs.
So, come on down across the state lines and we would welcome a voice in this old, dangerous, dirty, out of state corporation that either is too dumb or too smart for its own good.
Lying through your teeth under oath is not cool in any one’s book.
Claire – who lied? What did they lie about?
Just curious – how far away from Middletown do you live?
I didn’t know there was a Middletown, Massachusetts. Must have been a new incorporation. (Haven’t had one of those in something like a hundred years.)
Oh, Google Analytics is a wonderful thing, ain’t it?
Dave – Sorry for the confusion. I meant Middletown, CT, which is just 97 miles from Vernon, VT, the town that hosts Vermont Yankee. The nice visitor from MA complained about living just down stream from ENVY. I was just asking how far she was from the natural gas fired plant that is being built partially because of the market opportunity seen by some financially savvy backers who believe that ENVY will not be allowed to continue to operate.
That under construction plant in Middletown, CT is the one where “safe, clean natural gas” exploded in a blast that killed at least 6 workers put several others into the hospital, shook the local area enough to crack foundations in homes near the plant and caused a boom that was heard at least 15 miles away. Those effects seem more important to me than spilling less than a curie of tritium carried by otherwise quite pure H2O into the ground under an industrial plant that produces 620 MWe of emission free electricity.
Rod Adams wrote:
It is a bit selfish of Vermont legislators and citizens to think of just their own interests in this matter. Not only is it selfish, but it is a violation of the Constitution for them to assert that right.
The problem is that although those legislators may indeed be thinking of their political self-interest, the are really not thinking of the best interest of the people they represent. All the alternatives for VY are worse, even if politically more fashionable. It is like Winston Churchill’s comment on democracy, which he stated to be the worse form of government except for all the others.
Perhaps there is another solution. Maybe the Vermont state legislature can cede the land on which VY stands to another state that wants it ;-). Then it becomes another state’s “problem”.
ed stated:
Entergy Nuclear Vermont Yankee produces only 2% of the electricity used by ISO New England. It’s a smaller, older reactor, with a design that was obsolete by the time it was built. It is not a major factor in the New England grid.
While VY may be “small” compared to a number of other nuclear power plants, 620 MW is a big chunk of power. There is a lot of CO2 that is not going into the air because of it. Also, one never wants one plant to be too large a portion of the total generation in case it needs to shut down due to (say) a mechanical problem. There need to be enough reserves available to make up for its loss.
As far as being “obsolete”, if that is a valid argument to shut down power plants, we would find ourselves with precious little power being generated in this country.
This is, yet again, why it it time to end this charade. The Congress already decided on behalf of the people of Vermont whether the public good would be served by nuclear energy; it gave that authority to an Independent Commission known as the Nuclear Regulatory Commission.
I suppose part of the reason that the Congress gave that authority to the NRC was because the Congress knew that the US is a republic, not a democracy, and the majority does not rule all the time. Undoubtedly, every state has the right to regulate the goings on within its own borders for the public health, the public safety, and the public morality; this is the police power, and its exercise is the exercise of the vital powers of the state. But the majority within a state may not act as a tyranny, and use the police power in the matter of the strong using force and fraud to oppress the weak and unpopular.
The majority cannot legalize slavery, or violate the freedom of speech, or make torture the public policy of the state. The majority within a state, cannot, for example, decree witchcraft to be a crime, and some old woman to be a witch and burn her at the stake because an affliction came upon their cattle and she was known to be the weird one in town. When the majority enacts laws that are entirely arbitrary and lack any rational basis whatsoever – and those laws cause harm to a discernible class of individuals – then the majority is acting beyond its competence, and is acting beyond what we know as “due process of law”.
A majority cannot declare that Pi is equal to 3 and all circles must be redrawn with this new Biblical value because the local preacher deemed the Biblical value of Pi to be 3 at a local tent-meeting and revival. A majority cannot declare that the theory of evolution – which has centuries of undisputed evidence on its side – should be ignored in favor of some religious claptrap masquerading as science called “intelligent design” – and that the public schools should teach this religious claptrap in the place of evolution. Nor can a majority institute witch trials to prosecute the goings on of the unseen world…without some sort of bona-fide evidence of witchery and witches being present in the state.
Without some sort of rational basis, without some sort of actual, bona-fide taint, an actual, bona-fide, clear and present danger posed by an activity – and, no, a picogram of tritium does not rise to that level, the majority within a state cannot declare that a perfectly safe reactor of any sort that has already been declared safe by a Federal commission is now worthy of being shut down because they “do not like the way that it looks”.
Majorities do not have unlimited power. If they act out of unreason and they do harm to others, they act outside of the scope of authority that the people, in their discretion, have deigned to grant to them. Any bill to close Vermont Yankee, for any but clear and unmistakable harms of a manifest and continuing nature, (and a picogram of tritium don’t cut it, sorry), would fail this test of reason.
Thus, the time comes to end this charade and initiate legal action.
Heh … Be careful what you claim.
It was less than 120 years ago that the state house of Indiana tried to legislate the value of pi. (Story here) Fortunately, a mathematics professor from Purdue happened to be in town on other business and quickly put an end to this nonsense.
Never underestimate the stupidity of a politician. Me thinks that some of the legislators of Vermont are in the same league as Indiana.
This is a goofy argument, that somehow states cannot regulate industrial activities within their borders that produce goods sold out-of-state. Of course states may determine the conditions under which facilities are sited, constructed and operated — based on the policies the government sets regarding economic development, environmental conservation, labor protections and the like. And of course this applies to nuclear reactors, just like other power plants. The laws of the State of Washington should not apply to Boeing because purchasers of its planes are outside that state? Really?
It is true that the NRC has jursidiction over nuclear reactor design and safety. But states decide their own power policies and control the mix of energy options, if and where to site plants and the economics of the profits and costs of plant construction and operation. Suggesting that some federalbureaucracy should have the power to trump all of that is nuts. The US Supreme Court ruled on just this issue, affirming California’s right to determine policies other than safety concerning the Diablo Canyon reactor. (PACIFIC GAS & ELEC. v. ENERGY RESOURCES COMM’N, 461 U.S. 190 (1983)), quoting that decision: “the Federal Government maintains complete control of the safety and ‘nuclear’ aspects of energy generation, whereas the States exercise their traditional authority over economic questions such as the need for additional generating capacity, the type of generating facilities to be licensed, land use, and ratemaking.”
So please, enough of this specious pre-emption talk. Proponents of nuclear power should be trying to persuade state officials like those in Vermont to adopt your views, not in suggesting that they lack the legal rights clearly accorded them.
I will not comment on the political situation, however as a distant but interested observer, it seems to me that a good part of the blame needs to be laid at the feet of the company. As reactor operators go, they don’t seem to be among the best of them, and they did not handle the PR side of things very well ether. this is not to say the protesters are justified, but it does look from this distance that Vermont Yankee lost control of the situation in the media, and in the community.
In the hands of some other company, this situation might not have gotten this far out of control.
However, that’s just what I’m seeing from up here, I’m willing to accept I may be dead wrong.