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Federal Appeals Court Upholds Dismissal of Entergy’s Challenge to Energy Tax

CONTACT: William H. Sorrell, Attorney General, (802) 828-3173

December 10, 2013

On Tuesday, an appeals court in New York turned away Entergy’s effort to challenge Vermont’s generating tax in federal court. The generating tax imposes an assessment of $0.0025 per kWh of electricity generated by large capacity power plants, and could raise as much as $12 million in revenue annually until the Vermont Yankee nuclear power plant closes. Last year, the federal district court in Burlington dismissed Entergy’s lawsuit challenging the generating tax. Entergy appealed, and in the decision issued Tuesday, the Second Circuit Court of Appeals held that Entergy must pursue any challenge to the tax in a state forum. The court rejected Entergy’s argument that Vermont does not provide an adequate method for challenging the tax in a state forum. Attorney General Sorrell praised the decision, saying “the Second Circuit decision affirms that if Entergy wants to challenge the generating tax, it must go through the state tax appeal process, as we contended all along.” “The Court found that Vermont provides a full and fair process for Entergy’s challenge,” he added.

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