The plant is on the Connecticut River, upstream of the Vernon, Vermont Hydroelectric Dam and used the reservoir pool for its cooling water.

Entergy requested a new state certificate of public good (CPG),[1] but the Vermont legislature voted in February 2010 against renewed permission to operate.

In January 2012, Entergy won a court case, invalidating the state's veto power on continued operations.

In August 2013, Entergy announced that due to economic factors Vermont Yankee would cease operations in the fourth quarter of 2014.

The plant's initial operating license from the Nuclear Regulatory Commission was the subject of a lawsuit that produced the U.S. Supreme Court's 1978 decision Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., in which the Supreme Court set forth a significant doctrine in American administrative law.

[7] In 1978, the Vermont Yankee reactor was the subject of Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., an important United States Supreme Court administrative law case which ruled that courts cannot impose procedures upon the NRC as this exceeds their power of judicial review.

[citation needed] Entergy Vermont Yankee applied to the Nuclear Regulatory Commission for a license extension of 20 years on January 27, 2006.

[13] On March 21, 2011, the Nuclear Regulatory Commission issued their renewal of the operating license for the Vermont Yankee plant for an additional 20 years.

[15][16] On August 14, 2013, the United States Court of Appeals for the Second Circuit ruled, upholding a lower court's decision that allowed the Vermont Yankee plant to keep running despite a seven-year effort by the Vermont Legislature to close it, finding that states are "pre-empted" from regulating safety by the Atomic Energy Act of 1946, which made safety a federal responsibility.

[22] On September 28, 2016, Entergy began auctioning off more than 1,000 lots of goods in Brattleboro, Vt.[23] Two cooling towers were demolished in July 2019.

The NRC stated that the remaining cooling tower had enough capacity to allow the plant to operate at full output, however, until September 16, 2007, the reactor was kept at 50% power.

"What this report suggests to me is there is not a cause or reason to seek the closure of the plant because of operational or safety concerns," said Public Service Commissioner, David O'Brien.

"[28] In May 2009, the vice-president of operations at Vermont Yankee told the PSB during the reliability review that he did not believe there was any radioactively contaminated underground piping at the plant, but that he would check and respond to the panel.

[29] In October 2009, Arnold Gundersen, a member of a special oversight panel convened by the Vermont General Assembly, confirmed that radioactive contamination had been detected in underground pipes.

"[29] On June 4, 2010, VPR reported that, because they had provided misleading information, Entergy Nuclear would be liable for legal expenses incurred by certain parties.

[30] In January 2010, the Vermont Department of Health reported that tritium, a radioactive isotope of hydrogen, had been discovered in a sample of ground water taken from a monitoring well the previous November.

[33] On February 4, 2010, Vermont Yankee reported that ground water samples from a newly dug monitoring well at the reactor site were found to contain about 775,000 pCi of tritium per liter (more than 37 times the federal limit).

[31] Samples taken from the river and other drinking water sources by the Vermont Department of Health showed no detectable levels of tritium.

)[37] On May 20, 2010, the NRC released a report on Vermont Yankee: Based on the results of this inspection, the NRC determined that Entergy-Vermont Yankee (ENVY) appropriately evaluated the contaminated ground water with respect to off-site effluent release limits and the resulting radiological impact to public health and safety; and that ENVY complied with all applicable regulatory requirements and standards pertaining to radiological effluent monitoring, dose assessment, and radiological evaluation.

The judge also held that the state cannot force the plant's owner, Entergy, to sell electricity from the reactor to in-state utilities at reduced rates as a condition of continued operation.

Among the reasons cited for the closure were ongoing low energy prices resulting from increased shale gas production, and the high operating costs of the plant.

[44] In 1971, Esther Poneck led the New England Coalition on Nuclear Pollution in opposing construction of Vermont Yankee.

[53] In March 2011, 600 people gathered for a weekend protest outside the Vermont Yankee plant, in the wake of the Fukushima I nuclear accidents.

[60] The 2010 U.S. population within 10 miles (16 km) of Vermont Yankee was 35,284, an increase of 1.4 percent in a decade, according to an analysis of U.S. Census data.

[61] From April 2016, due to the continuing decommissioning process, the emergency planning zone was reduced to the site boundaries.