A federal judge on Monday threw out Entergy Corp.’s bid for a preliminary injunction to stop the state of Vermont from shutting down the Vermont Yankee nuclear plant in March 2012, when its original 40-year license expires. The ruling will force the company to decide whether it will buy $65 million of nuclear fuel to keep the plant running until a trial begins this September, or to shut down the plant.

Entergy in April asked the federal court to stop the state from closing the plant next year after the Nuclear Regulatory Commission extended the plant’s operating license by 20 years. Entergy still requires a state permit from Vermont—the only state that requires approval from both houses of Legislature before the state can extend a nuclear operating license.

But on Monday, U.S. District Judge J. Garvan Murtha ruled that the company had not shown that it would suffer irreparable harm to delay the state’s bid to close the plant. “The Court notes, however, that Entergy has raised serious questions regarding its Atomic Energy Act preemption claim, warranting further briefing and a prompt full-dress trial on the merits,” the judge wrote.

In 1972, Vermont Yankee began to operate after the Vermont Legislature voted to allow a nuclear plant to be built and operate under a 40-year license, until 2012. In 2006, the state’s General Assembly passed a law that outlined the requirements for continued operation of a nuclear power plant in the state. Last year, the state Senate voted 26-4 to block the plant from operating past March 2012, when its state permit expires.

Entergy, which bought the plant from a group of New England utilities in 2002, said the 2006 law violated a key provision of a Memorandum of Understanding (MOU) signed by Vermont officials and other parties at the time of the plant’s purchase.

“The Court must carefully consider this claim and whether the statutes are preempted on their face, as applied, or whether they were enacted for a preempted purpose, as well as whether a permanent injunction is warranted, its precise scope, what State actions, if any, would be enjoined, and, if any injunction is issued, how to tailor relief to remedy alleged harms,” the judge wrote.

“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," Alex Schott, a company spokesman, said in an e-mail to Bloomberg. "In the upcoming days, we will be evaluating Judge Murtha’s opinion and assessing the company’s near-term options."

Vermont Gov. Peter Shumlin hailed the decision, saying the state had acted “responsibly” regarding its energy future and would continue to work hard to ensure that its laws were enforced and respected. “Entergy’s lawsuit is an attack on state authority, attempting to deny us a voice regarding whether Vermont Yankee will run past March 2012—even though Entergy has known since 2002 that it could not operate the plant past that date without state approval. I believe strongly in the state’s authority, and I believe that Entergy has not been an honest, fair and responsible player for Vermont."

The case is Entergy Corp. v. Shumlin, 11-00099, U.S. District Court, District of Vermont (Brattleboro).

Sources: POWERnews, U.S. District Court, District of Vermont, Entergy, Bloomberg