Pacific Gas and Electric Co. v. State Energy Resources Conservation and Development Commission

Background

The issue of nuclear waste: The radioactive waste fuel in a nuclear reactor must be periodically removed. Because nuclear power plant operators originally assumed that the fuel would be reprocessed, storage pools made to hold it were relatively limited in capacity and design. Over time, however, it became clear that the fuel would not be reprocessed. This resulted in large stores of radioactive waste. As a result, as Justice White noted, that "problems of how and whereto store nuclear wastes [have] engendered considerable scientific, political, and public debate."

California statute: Responding to these concerns, California in 1974 enacted the Warren-Alquist State Energy Resources Conservation and Development Act, Cal. Pub. Res. Code §§ 25000 et seq. Under the act, which was amended in 1976 to add new regulations, operators of nuclear and certain other power plants had to apply for certification by the new State Energy Resources Conservation and Development Commission, or "Energy Commission" for short. Two sections in particular became the subject of dispute:

Section 25524.1(b) provided that the Energy Commission had the authority to determine, prior to the building of a new nuclear power plant, that there would be adequate storage space for the spent fuel rods "at the time such nuclear facility requires such storage."

Section 25524.2 addressed long-term concerns arising from nuclear wastes by placing a moratorium, or stoppage, on the certification of new plants until the Energy Commission "finds that there has been developed and that the United States through its authorized agency has approved and there exists a demonstrated technology or means for the disposal of high-level nuclear waste."

Dispute: Two California public utilities, Pacific Gas and Electric and San Diego Gas & Electric Companies, filed an action in federal district court seeking a declaratory judgment that these two provisions of the Warren-Alquist act (as well as various others) were invalid under the Supremacy Clause of the United States Constitution because they were preempted by (conflicted with) the Atomic Energy Act. The federal district court agreed.

Appeal: The Ninth Circuit held:

Petitioners had standing to challenge the statute (upholding the district court),

25524.1(b), regarding spent fuel storage, was not ripe for review (overturning the district court). The reason given for this was that "we cannot know whether the Energy Commission will ever find a nuclear plant's storage capacity to be inadequate."

25524.2, creating the moratorium, was not preempted (overturning the district court), because sections 271 and 274(k) of the Atomic Energy Act authorized the states to regulate nuclear power plants "for purposes other than protection against radiation hazards," and that is what this section did: it dealt with economic aspects of the nuclear fuel cycle, and was not designed to provide protection against radiation hazards.

Explanation of case's title: The Supreme Court granted certiorari to this case. The Court of Appeals for the Ninth Circuit had also consolidated another federal district court case, Pacific Legal Foundation v. State Energy Resources Conservation and Development Commission, which challenged other portions of the California statute into the Pacific Gas case. Although this second district court case gave the appellate court decision its name, the Supreme Court denied certiorari on that case's portion of the appellate decision.

Decision

The Court affirmed in a unanimous decision.

Ripeness

First, Justice White affirmed the appellate court's reasoning that Section 25524.1(b) (California's provision regarding spent fuel storage) was not ripe for review, while Section 25524.2 was ripe.

Regarding Section 25524.1(b), White wrote that "a court should not stretch to reach an early, and perhaps a premature, decision regarding [it]." Section 25524.2 was ripe, for if power plants went ahead with their operations without knowing whether the moratorium imposed by the statute was valid, this "would impose a palpable and considerable hardship on the utilities, and may ultimately work harm on the citizens of California."

Preemption

The court briefly set out the legal framework for preemption.

The court then concluded that 25524.2 was not preempted by the Atomic Energy Act. The court responded to each of petitioner's three arguments.

Response to first argument. From the time the federal act was passed in 1954 until the present, White explained, Congress had maintained a system of dual regulation over nuclear plants: the federal government held control over safety issues, whereas the states exercised "their traditional authority over economic questions such as the need for additional generating capacity, the type of generating facilities to be licensed, land use, and ratemaking." The Court held that 25524.2 was directed toward economics, rather than safety, in its purpose and thus was fully within California's authority.

Response to second argument.

Nor did 25524.2 in any way conflict with national policy, even with a decision by the Nuclear Regulatory Commission (NRC) to allow continued licensing of reactors despite concerns regarding waste disposal. Again, the NRC's authority, as that of a federal nuclear regulatory agency, was in the realm of safety, leaving states to make economic determinations regarding nuclear power. White wrote, :And as there is no attempt on California's part to enter the field of developing and licensing nuclear waste disposal technology, a field occupied by the Federal Government, 25524.2 is not preempted any more by the NRC's obligations in the waste disposal field than by its licensing power over the plants themselves. Furthermore, the Nuclear Waste Policy Act, enacted into law by Congress in 1982, did not appear to have been passed with the intention of superseding states' decision-making power with regard to waste disposal and the opening of new plants.

Response to third argument Finally, section 25524.2 did not in any way operate at cross-purposes to the aim embodied in the Atomic Energy Act of developing commercial uses for nuclear power. As the court of appeals had observed, Justice White wrote, "Promotion of nuclear power is not to be accomplished `at all costs.'" Instead, Congress had given the states authority to decide whether to build a nuclear plant or one using traditional fuel sources. "California's decision to exercise that authority does not, in itself, constitute a basis for preemption."

Concurrence in part

Justice Blackmun concurred in part and in the judgment. He took issue, however, with the idea implicit in the Court's argument that a state motivated solely by safety concerns, rather than economic ones, lacked the authority to prohibit the construction of nuclear plants. He then addressed the three reasons why the Court held that a safety-motivated decision to prohibit construction would be preempted:

1. "the Federal Government has occupied the entire field of nuclear safety"; 2. a state judgment on safety would place a state in conflict with the NRC; 3. a state moratorium on further plant construction would obstruct the Atomic Energy Act's objective "to insure that nuclear technology be safe enough for widespread development and use."

Subsequent Developments

In 1972 the Supreme Court affirmed a decision of the Court of Appeals for the Eighth Circuit, Northern States Power Co. v. Minnesota, which held that attempts by states to regulate radiation hazards were preempted by the Atomic Energy Act. However, this affirmation was by a memorandum without a written opinion. As such, Pacific Gas is often cited for holding that states are preempted from regulating the safety aspects and radiological hazards of nuclear power plants.

Later, more consequential Supreme Court cases related to the politics of nuclear power include Metropolitan Edison Co. v. People Against Nuclear Energy (1983), decided the same year, and Silkwood v. Kerr-McGee Corp. (1984).

Critical response

The majority opinion did not question California's assertion that the moratorium was justified because the lack of a permanent disposal method for high level waste made nuclear generation uneconomic. It has been noted that existing plants and plants constructed after the Supreme Court decision have continued to economically operate by expanding current waste storage facilities. In addition, by simply citing examples of the costs of cancelled nuclear construction projects such as WNP-3 and WNP-5 or Marble Hill, or of cost over-runs at plants such as Braidwood, a state could justify a statutory moratorium on all new nuclear generating plants on the basis that these plants are inherently uneconomic.

In the case of Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984), which was decided the same year as Pacific Gas, the Supreme Court ruled that the Atomic Energy Act did not preempt the award of punitive damages for state tort claims involving radioactive contamination. One criticism is that Silkwood is inconsistent with Pacific Gas as the purpose of the punitive damages awarded was to punish and to alter conduct involving the safety of radiological controls, giving the state regulation over these activities through tort law.