In re VT Yankee Nuclear Power Station

In re Proposed Sale of VT Yankee Nuclear Power Station (2002-368); 175 Vt. 368;
829 A.2d 1284

2003 VT 53

[Filed 25-Jul-2003]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                 2003 VT 53

                                No. 2002-368

  In re Proposed Sale of Vermont Yankee	         Supreme Court
  Nuclear Power Station, et al. (New
  England Coalition, Appellant)	                 On Appeal from
                                                 Public Service Board

                                                 March Term, 2003

  Michael H. Dworkin, Chair

  James A. Dumont of Law Office of James A. Dumont, P.C., Middlebury,
    for Appellant.

  James Volz, Montpelier, for Appellee Vermont Department of Public
    Service.

  Victoria J. Brown and Peter F. Young of Eggleston & Cramer, Ltd.,
    Burlington, for Appellees Entergy Nuclear Vermont Yankee, PLLC and 
    Entergy Nuclear Operations, Inc.

  John H. Marshall, Nancy S. Malmquist and Robert A. Miller, Jr. of Downs
    Rachlin Martin PLLC,  St. Johnsbury, for Appellee Vermont Yankee 
    Nuclear Power Corporation.

  Kenneth C. Picton, Rutland, and Morris L. Silver, Benson, for Appellee
    Central Vermont Public Service Corporation.

  Peter H. Zamore of Sheehey Furlong & Behm P.C., Burlington, for
    Appellee Green Mountain Power Corporation.


  PRESENT:  Amestoy, C.J., Dooley, Skoglund, JJ., and Teachout, Supr. J., and
            Allen, C.J. (Ret.), Specially Assigned

        
       ¶  1.  AMESTOY, C.J.  The New England Coalition (NEC) appeals from
  an order of the Vermont Public Service Board approving the sale of the
  Vermont Yankee Nuclear Power Station to Entergy Nuclear Vermont Yankee,
  L.L.C. (ENVY).  NEC claims error in the Board's conclusions that ENVY and
  its operating affiliate, Entergy Nuclear Operating Company (ENO), do not
  need a certificate of public good (CPG) under 30 V.S.A. § 248, and that
  ENVY is eligible for a CPG under 30 V.S.A. § 231.  We affirm.

       ¶  2.  Vermont Yankee Nuclear Power Station began operating in 1972
  after receiving a CPG from the Public Service Board (PSB) in 1966 under 30
  V.S.A. § 102.  Vermont Yankee is the State's largest electric generation
  station, and has provided nearly one-third of Vermont's electricity since
  it began operating.  The plant is owned by Vermont Yankee Nuclear Power
  Corporation (VYNPC).  Vermont's two largest electric utilities, Central
  Vermont Public Service Corporation (CVPS) and Green Mountain Power
  Corporation (GMP) together own fifty-five percent of VYNPC.  CVPS and GMP,
  as well as the facility's other utility owners, have a contract with
  Vermont Yankee under which each utility purchases a share of Vermont
  Yankee's capacity and energy equal to their ownership interest.  Thus,
  together CVPS and GMP purchase fifty-five percent of the nuclear plant's
  capacity and energy.

       ¶  3.  On September 4, 2001, the PSB opened an investigation into the
  proposed sale of Vermont Yankee to ENVY.  Under the proposal, ENVY agreed
  to purchase the station for a cash payment of $180 million, and VYNPC
  agreed to purchase all of the station's output through the term of Vermont
  Yankee's current license, which expires in March 2012.  As a result of that
  agreement, GMP and CVPS will continue to receive power from Vermont Yankee
  until 2012.  
   
       ¶  4.  In the PSB proceeding, ENVY and ENO sought certificates of
  public good under 30 V.S.A. § 231 for ENVY to own, and for ENO to operate,
  Vermont Yankee.  See 30 V.S.A. § 231(a) (authorizing PSB to grant a
  certificate of public good to own or operate an electric company if doing
  so "will promote the general good of the state").  The PSB permitted NEC
  and a number of other intervenors to participate in the proceeding.  NEC
  moved to dismiss the case, arguing, among other things, that the
  transaction required review and approval under 30 V.S.A. § 248 because ENVY
  and ENO intended to sell most of Vermont Yankee's power outside Vermont. 
  By order dated December 14, 2001, the PSB denied NEC's motion.  The PSB
  concluded that § 248 was inapplicable because the circumstances under which
  the statute applies - new construction, certain purchases of out-of-state
  power, or investment in out-of-state generation facilities - were not
  present in the proposed transaction.  After holding public and technical
  evidentiary hearings on the proposed sale, the PSB concluded that the sale
  to ENVY, and operation of the plant by ENO, would promote the general good
  and issued the companies CPGs under § 231 accordingly.  This appeal
  followed.

       ¶  5.  NEC limits its appeal to two questions of law.  First, the
  organization challenges the PSB's conclusion that because the transaction
  did not involve construction of new facilities, ENVY and ENO did not have
  to obtain a CPG under 30 V.S.A. § 248.  Second, NEC claims the PSB erred by
  granting ENVY a CPG under § 231.  We review NEC's claims under a
  deferential standard.  In re Quechee Serv. Co., 166 Vt. 50, 52, 690 A.2d 354, 358 (1996).  PSB orders "enjoy a strong presumption of validity."  In
  re Green Mountain Corp., 162 Vt. 378, 380, 648 A.2d 374, 376 (1994).  When
  reviewing the PSB's interpretation of a statute within its particular
  expertise, we look for a compelling indication of error, and in its
  absence, we will uphold the PSB's decision.  In re Verizon New England
  Inc., 173 Vt. 327, 334-35, 795 A.2d 1196, 1202 (2002).
   
       ¶  6.  NEC claims that after the sale, ENVY will sell Vermont Yankee's
  output primarily to customers outside Vermont, thus changing the basis upon
  which the Board originally granted the plant's CPG over thirty years ago. 
  Analogizing to principles in zoning and land use law, NEC argues that the
  alleged change in use of Vermont Yankee triggers review under § 248.  In
  particular,  NEC asserts that § 248(b) requires the PSB to weigh the costs
  and benefits to Vermont of hosting a nuclear power plant that sells most of
  its power to entities outside Vermont.  NEC's claim must fail because its
  factual premise, that the proposed sale means a change in use of the
  facility, has no support in the PSB's fact findings, which NEC does not
  challenge on appeal.  See Bevins v. King, 147 Vt. 203, 206, 514 A.2d 1044,
  1046 (1986) (unchallenged findings are binding in the Supreme Court).

       ¶  7.  The PSB found that under the terms of the transaction and the
  associated power purchase agreement, VYNPC will purchase all of the
  station's output until March 2012, and CVPS and GMP will continue to
  receive fifty-five percent of that output after the sale just as they did
  before the sale.  Thus, until Vermont Yankee's license expires in March
  2012, the majority of the facility's output is dedicated to serve Vermont
  and not other states.  The PSB's findings show that EVNY and ENO will not
  change the use of Vermont Yankee from the use its prior owners made of the
  plant before the sale.  Therefore, even if we agreed with NEC that § 248
  applied to a change in use of an existing power plant certificated before
  the effective date of § 248, it does not apply to ENVY's purchase of
  Vermont Yankee because no change in use of the facility will occur after
  the sale according to the PSB's unchallenged findings.
   
       ¶  8.  NEC claims, however, that the plant's new owners can withdraw
  from the power purchase agreement with VYNPC at any time, and could
  continue to operate the plant for the benefit of people outside Vermont
  beyond the expiration of Vermont Yankee's current license.  NEC's argument
  is predicated on two assumptions, each of which is entirely speculative. 
  First, NEC assumes that the plant's new owners will withdraw from the power
  purchase agreement and would operate the plant after the expiration of the
  current license solely for the benefit of out-of-state customers.  NEC's
  claim is, at this point, only hypothetical, and has no support in the PSB's
  findings.  We will not render an opinion on a speculative claim that has no
  basis in the findings of the tribunal below.  Second, even if future events
  demonstrate that NEC's speculative concerns are well founded, NEC's
  assumption that no remedy exists is not.  See infra, at  11.

       ¶  9.  NEC's § 248 argument is also unavailing because the statute's
  plain language does not require PSB review if an existing generation plant
  undergoes a change in use or ownership.  The PSB concluded that its review
  under § 248(a)(2) is triggered when an entity subject to PSB jurisdiction
  seeks to construct new electric generation facilities, an event not
  proposed as part of the transaction.  Section 248(a) requires energy
  utilities seeking to construct new facilities, purchase electric capacity
  or energy from a source outside Vermont, or invest in out-of-state electric
  generation or transmission facilities to obtain a CPG from the Public
  Service Board.   30 V.S.A. § 248(a).  Subsection (a)(2) (FN1) of the statute
  provides:

         (2) Except for the replacement of existing facilities with
    equivalent facilities in the usual course of business, and except
    for electric generation facilities that are operated solely for
    on?site electricity consumption by the owner of those facilities:  

         (A) no company, as defined in section 201 of this title, and
    no person, as defined in 10 V.S.A. § 6001(14), may begin site
    preparation for or construction of an electric generation facility
    or electric transmission facility within the state which is
    designed for immediate or eventual operation at any voltage, and  

         (B) no such company may exercise the right of eminent domain
    in connection with site preparation for or construction of any
    such transmission or generation facility, unless the public
    service board first finds that the same will promote the general
    good of the state and issues a certificate to that effect.  
         
  30 V.S.A. § 248(a)(2) (emphasis added).  In unambiguous terms, § 248(a)(2)
  enumerates just two events that trigger the statute's application: (1)
  "site preparation for" or (2) "construction of" an electric transmission or
  generation facility.  If the facility already exists, as in Vermont
  Yankee's case, § 248(a)(2) applies only if the site preparation or
  construction is outside the usual course of business and involves new
  facilities that are neither replacement facilities nor equivalent to those
  that currently exist.  See id. ("Except for the replacement of existing
  facilities with equivalent facilities in the usual course of business" no
  utility may commence site preparation for or construction of an electric
  transmission facility without a § 248 certificate).  The statute's
  triggering conditions are not present under the facts of the transaction
  here because the purchase and sale agreement does not call for any
  construction. 
   
       ¶  10.  Other sections of § 248 are consistent with that
  interpretation of the statute's applicability.  Indeed, by its own terms,
  the analysis § 248(b) requires must be done when the PSB considers any
  "purchase, investment or construction" covered by the statute.  Id. §
  248(b) (emphasis added); see also id. § 248(b)(6) (before issuing a CPG
  under § 248, PSB must find that company's purchase, investment or
  construction is consistent with company's approved least cost integrated
  plan) (emphasis added).  Subsection (a)(4)(A) requires the PSB to hold a
  nontechnical public hearing "in at least one county in which any portion of
  the construction of the facility is proposed to be located."  Id. §
  248(a)(4)(A) (emphasis added).  Under subsection (k)(1), the PSB may waive
  "the prohibitions upon site preparation for or construction of an electric
  transmission facility contained in [§ 248]" pending full review under the
  statute.  Id. § 248(k)(1) (emphasis added).  The emphasized language
  highlights the Legislature's intent to bring within the statute's purview
  proposed construction, i.e., a facility that has not yet been built.  The
  language the Legislature employed in § 248(a)(2) evinces no intent to
  require the owner or operator of an existing electric generation plant to
  seek § 248 review before changing its sales portfolio or selling its
  ownership interest.
         
       ¶  11.  We emphasize that our holding is limited to the present facts. 
  If Vermont Yankee had received a § 248 CPG before its construction, and the
  station's owners thereafter changed the use that formed the basis for its §
  248 CPG, our analysis of the issue would likely be different.  We note,
  however, that the PSB has authority under 30 V.S.A.§ 102 and § 231 to amend
  or revoke a CPG for good cause.  See 30 V.S.A. § 102(c) ("For good cause,
  after an opportunity for hearing, the board may amend or revoke any
  certificate awarded under the provisions of this section."); id. § 231
  (same).  Good cause to amend or revoke ENVY and ENO's CPGs might be found
  if the companies materially alter the circumstances they presented to the
  PSB as grounds for it to find that the sale and associated power purchase
  agreement promote the general good of Vermont.  In sum, we conclude that
  the PSB correctly rejected NEC's claim that ENVY and ENO must obtain a §
  248 CPG for their purchase and operation of Vermont Yankee.
   
       ¶  12.  NEC next claims that the PSB erred by granting ENVY a CPG
  under § 231, but does not challenge the CPG issued to ENO.  NEC first
  claims that ENVY defined no Vermont service territory in its request, and
  therefore the PSB issued the § 231 CPG erroneously.  NEC also claims that
  any CPG granted under § 231 requires the recipient to sell its electricity
  wholly within Vermont, something that ENVY did not intend to do.  We find
  no merit to these arguments.  NEC's service territory claim fails because
  the PSB defined the service territory served by Vermont Yankee as the
  entire State of Vermont.  Further, § 231 applies to any corporation that
  seeks to own a business over which the PSB has jurisdiction.  30 V.S.A. §
  231(a).  Under 30 V.S.A. § 203(1), the PSB has jurisdiction over any
  company that manufactures, transmits, distributes or sells electricity "to
  be used ultimately by the public."  Id. § 203(1).  As the PSB found, the
  electricity manufactured by Vermont Yankee will ultimately be used by
  ratepayers of GMP and CVPS under the power purchase agreement the PSB
  approved as part of the sale to ENVY.  ENVY was thus required to obtain a
  CPG under § 231 before it could lawfully own VYNPC, and the PSB was correct
  in so concluding.

       ¶  13.  NEC also claims that ENVY should have sought a CPG under 30
  V.S.A. § 102 rather than § 231 because the latter section does not apply to
  an electric generation facility that is not a public service company.  We
  decline to address this claim because it was neither raised nor decided
  below.  Contentions not raised or fairly presented below are not preserved
  for appeal.  Bull v. Pinkham Eng'g Assocs., 170 Vt. 450, 459, 752 A.2d 26,
  33 (2000).  The issue must be presented with sufficient specificity and
  clarity to give the tribunal below a fair opportunity to rule on it.  Id. 
  That did not happen here, and we agree with ENVY, ENO and the Department of
  Public Service that NEC has waived this claim on appeal. 

       Affirmed.

   
                                       FOR THE COURT:


                                       _______________________________________
                                       Chief Justice


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                                  Footnotes

FN1.  The PSB and the parties focused their analysis on § 248(a)(2) and not
  subsection (a)(1), which addresses certain power contracts for electricity
  generated outside Vermont and investments in out-of-state electric
  generation facilities.  Therefore, our analysis focuses on § 248(a)(2) as
  well.