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March 2015: New York Appellate Court Victory Holding That Entergy’s Indian Point Energy Center Is Exempt from Review Under New York’s Coastal Management Program

March 2015

The firm obtained an important victory for its client Entergy when, on December 11, 2014, a New York state appellate court unanimously held that the Indian Point Energy Center is exempted under the New York Coastal Management Program (“CMP”) from review for consistency with the CMP’s policies. The ruling removes a potential hurdle to Entergy’s ability to obtain a federal renewal license to operate Indian Point for another twenty years.

Indian Point, a power generating facility that was constructed at a cost of $2.45 billion and supplies a fifth of southeastern New York’s power, is located on the Hudson River, an area considered a coastal region by the federal Coastal Zone Management Act (“CZMA”). Under the CZMA, New York State potentially could force denial of the federal renewal license by objecting to Entergy’s certification that Indian Point complies with the policies in the New York CMP. Specifically, the CZMA provides that if a state has obtained federal approval for a CMP, a federal license applicant must certify that its proposed project complies with the policies in the CMP. The state has the ability to object to the applicant’s certification and if it does, the federal agency is precluded from granting the license, unless the federal Secretary of Commerce overrides the objection.

New York’s CMP also contains a grandfathering clause, which provides that the CMP will not be applied to any plant that has undergone an environmental review prior to a particular date, before New York’s CMP was enforceable. Entergy contended that, because Indian Point had undergone an environmental review prior to the relevant date, it should have been grandfathered and should not have to be reviewed for consistency with New York’s CMP. Represented by a different law firm, Entergy’s argument was rejected by the relevant New York agency (the New York State Department of State) and then by the New York Supreme Court, Albany County.

Quinn Emanuel was brought in to handle Entergy’s appeal to the Appellate Division, Third Department, one of New York’s intermediate appellate courts. The firm argued that the plain language of the grandfathering exemption dictated that Indian Point must be grandfathered from review for compliance with New York’s CMP and also assuaged any concerns that a finding of grandfathering would exempt Indian Point from other reviews related to the re-licensing process. That strategy succeeded. On December 11, 2014, the Third Department reversed the agency’s and Supreme Court’s determination and “agree[d] with [Entergy] that the [State’s] reading of the [grandfathering] exemption offends the plain meaning of its language, is irrational and cannot be sustained.” Entergy Nuclear Operations, Inc. v. New York State Dep’t of State, No. 518510, 2014 WL 6978224 (3d Dep’t Dec. 11, 2014). As a result of the firm’s winning argument, the court declared that Indian Point is exempt from review under New York’s CMP.

The decision is significant because it removes a substantial uncertainty from the renewal licensing process for Indian Point and allows the company to focus on other pending aspects of re-licensing. The continued operation of Indian Point is key to sustained and reliable provision of electrical power to New York City and the surrounding areas without significant emissions of greenhouse gases and without increased costs to consumers.