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Vermont files motion to dismiss Entergy lawsuit

— Any lawsuit against an increased state electricity generation tax on the Vermont Yankee nuclear plant belongs in state court, not federal court, according to the state’s motion to dismiss the latest lawsuit filed by Entergy Nuclear.

“Challenges to state taxes do not belong in federal court,” was the first line in the state’s motion to dismiss the suit filed by Entergy Nuclear Vermont Yankee LLC and Entergy Nuclear Operations Inc. in U.S. District Court.

“As this court and the 2nd Circuit (Court of Appeals) have both repeatedly recognized, Vermont’s administrative and judicial processes are the appropriate forum to litigate disputes,” wrote Jonathan T. Rose, an assistant attorney general, and Danforth Cardozo, an assistant attorney general with the Vermont Department of Taxes. The state tax appeal system satisfies the federal tax law’s requirement for a “plain, speedy and efficient remedy,” Rose added.

Entergy Nuclear, shortly after filing the lawsuit earlier this month, also filed a motion for a preliminary injunction, seeking to “preserve the status quo.” A hearing on the lawsuit, which was filed Sept. 12, will be held Monday in U.S. District Court in Rutland.

Entergy, in its motion for a preliminary injunction, claimed it would “suffer irreparable harm ... by an illegal and burdensome new exaction.” Entergy Nuclear had paid the state $5 million under two memorandums of understanding, both of which expired on March 21. Under the new state law, passed by the 2012 Vermont Legislature and signed into law by Gov. Peter Shumlin, Entergy’s generation tax would jump to $12.8 million, money that is earmarked for the state’s clean energy fund.

The law applies only to “large generators” making more than 200 megawatts of electricity, of which there is only one such large generator in the state — Vermont Yankee. The state asserted in its response that the federal court lacked “subject matter jurisdiction,” and the suit should be dismissed because Entergy’s claims are barred by federal law.

“Plaintiffs clearly are entitled to raise their federal challenges to the electrical energy generating tax at the Vermont Department of Taxes and to seek review of any administrative ruling in the Vermont state courts,” the state wrote.

The new assessment calls for a quarter penny tax for every kilowatt hour of electricity generated.

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