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Who has final say over the fate of Vermont Yankee nuclear power plant?

If a state wants to shutter a nuclear power plant, but the feds have relicensed it, does the state have legal grounds for closure? That question is being wrestled with in federal court.

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The company must now decide whether to order a new load of nuclear fuel – which could cost up to $65 million – and risk losing it if the plant has to shut down by the state's March 2012 deadline. The alternative: shutting the plant down early.

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Although admitting the company was "disappointed in the outcome,” Vermont Yankee spokesman Larry Smith said in a statement that “our request for a preliminary injunction was about keeping the plant’s workers employed, the plant running safely, and the electric grid reliable until this case is resolved. In the upcoming days, we will be evaluating Judge Murtha’s opinion and assessing the company’s near-term options."

State politicians note that Vermont Yankee and Fukushima have the same design, and earlier this year they denounced the NRC's decision to extend the license for the plant. Their anger flared again after Monday’s ruling.

"Vermont has acted and will continue to act responsibly regarding our energy future, and we will continue to work hard to ensure that our laws are enforced and respected," Gov. Peter Shumlin said in a statement. "I believe strongly in the state's authority, and I believe that Entergy has not been an honest, fair, and responsible player for Vermont."

Experts say the legal decision Monday appears to fall under the precedent set by a 1983 Supreme Court case, in which California blocked Pacific Gas & Electric (PG&E) from building any more nuclear plants in the state, due to its lack of nuclear-waste storage. But the case also established "federal preemption" and federal supremacy and oversight over nuclear licensing and safety matters.

"If the court rules in the company's favor, it would signal that the federal government has complete supremacy over nuclear issues – overturning the PG&E decision," said Boris Mamlyuk, an assistant professor at Ohio Northern University College of Law, who has studied the case, in an April interview. "States would be powerless to block licensure of new permits, operating permits, relicensings, and other measures."

Others agree with him.

"A victory for the state of Vermont would pretty much preserve the status quo of states’ power," says Michael Dworkin, former chairman of the Vermont Public Service Board. "A victory for Entergy would radically alter 100 years of law in which states controlled the land use issues involving energy plants within the state."

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