Federal judge throws out Entergy tax challenge

RUTLAND, Vt. -- A federal judge on Thursday dismissed a lawsuit filed by the Vermont Yankee nuclear power plant against the state challenging taxes on the plant that were passed earlier this year by the legislature.

U.S. District Court Judge Christina Reiss rejected the argument made by New Orleans-based plant owner Entergy Corp. that the payment is not a tax and said federal court lacked jurisdiction over the case.

Reiss granted the state's motion to dismiss the case saying, Entergy's challenge "could be brought directly in Vermont's state courts."

Entergy had challenged the taxes that it said increased the reactor's annual state tax from about $5 million to about $12.8 million.

Supporters of the new taxes said they were designed to replace money the plant paid the state under agreements in 2003 and 2005 that saw the state drop its opposition to the plant boosting its power output by 20 percent and to the plant's plan for storage of more highly radioactive nuclear waste on its grounds. Those agreements lasted until March 21, when the plant's 40-year operating license expired. The Nuclear Regulatory Commission approved a 20-year license extension last year.

Vermont Yankee, in the lawsuit, argued that it had fulfilled its obligations under the power boost and waste storage agreements and should be free to operate without paying more to the state.