Entergy sees Vermont Yankee fate up to Supreme Court

* Vermont wants plant shut in 2012

* Entergy wants plant to run for another 20 years

* Case likely to return to Vermont Public Service Board

By Scott DiSavino

Nov 8 (Reuters) - The chief executive of U.S. power company Entergy Corp said the fate of the Vermont Yankee nuclear power plant, which the state wants to close next year, will probably be determined by the U.S. Supreme Court.

Vermont Governor Peter Shumlin wants the 620-megawatt plant to shut by March 21, 2012, when its original 40-year operating license was to expire.

Entergy, the nation's second-biggest nuclear power operator, wants the 39-year old plant to continue running for another 20 years under a new federal license and has sued in federal court to block the state from shutting the facility.

"These are the kind of issues that the Supreme Court likes. It's a federal preemption case; it's a landmark case," J Wayne Leonard, Chairman and CEO of Entergy, said at the Edison Electric Institute's conference in Orlando, Florida on Tuesday.

The district court trial took place Sept. 12 to 14 before U.S. District Judge J. Garvan Murtha of the District Court for Vermont and a decision is expected any day. However, appeals could take the case to the U.S. Supreme Court.

"It might be a year from now where whoever the losing party, or the harmed party is, will be able to file a writ at the Supreme Court to be heard. When it gets to the Supreme Court, we certainly like our position in a federal preemption case," Leonard said.

He said there were various potential rulings the district court judge could make with the most discussed being that the judge kicks the case back to the state Public Service Board to decide whether the plant is in the public good.

New Orleans-based Entergy bought Vermont Yankee from several New England utilities in 2002 for $180 million. The company agreed to seek a certificate of public good from the Vermont Public Service Board if it decided to run the plant beyond March 2012 when its original operating license was to expire.

Entergy filed with the U.S. Nuclear Regulatory Commission (NRC) for a new 20-year license for Vermont Yankee in 2006.

STATE BLOCKS CERTIFICATE, ENTERGY SUES

But in January 2010, Entergy identified a radioactive tritium leak at the plant and company officials made some contradictory statements about underground pipes related to that leak.

The next month, the state Senate, then headed by now Governor Shumlin, voted to block the Vermont Public Service Board from issuing the certificate that would allow the plant to run beyond 2012.

Entergy continued to work with state officials in an attempt to convince the officials to allow the plant to continue operating beyond March 2012 before finally suing in April 2011 to block the state from shutting the plant. That was about a month after the NRC extended the operating license for another 20 years until 2032.

Leonard said if the district court judge sends the case back to the state's Public Service Board, he said the company's chances were good.

"Of course, we believe the plant is in the public interest. The ISO believes it's essential for reliability," Leonard said referring ISO New England, which operates New England's power grid and has repeatedly found Vermont Yankee was necessary to keep the electric system reliable.