Federal Court Dismisses Vermont Yankee Generation Tax Challenge

Oct 26, 2012

A federal judge has dismissed a lawsuit filed by the owner of the Vermont Yankee Nuclear Power Plant against the state of Vermont.

Vermont Yankee owner Entergy Corp. challenged the state over legislation that raises generation taxes.  Entergy filed suit in federal court seeking to stop its implementation, which  increases the reactor's annual state tax from about $5 million to nearly $12.8 million.  The state argued for dismissal of the case saying the federal court did not have jurisdiction under the Tax Injunction Act regarding the collection of state taxes.  Entergy contended that the amount being charged was not a tax, and if it was, could not be remedied before a state entity. On Thursday U.S. District Court Judge Christina Reiss granted the state's motion to dismiss.  Vermont Assistant Attorney General Jonathan Rose says they are obviously pleased with the judge’s ruling.

Jonathan Rose notes that the tax is effective and is being collected by the state of Vermont.

Vermont Law School Professor Cheryl Hanna says the judge essentially said Entergy brought the case to the wrong court.

Cheryl Hanna expects Entergy to appeal to the 2nd Circuit Court and argue that the tax is actually a penalty.  Hanna says that would provide for federal jurisdiction.

Representatives from Entergy/Vermont Yankee were not available for an interview, but issued this

Vermont Yankee
Credit Courtesy NRC and Entergy Corp.

e-mail statement: “We are obviously disappointed and will be reviewing the decision.”