The D.C. Circuit Court of Appeals ruled that the 605 MW Vermont Yankee nuclear power plant could keep its operating license.

The state challenged the validity of the plant’s water permit in 2011, but the court ruled that the Vermont Department of Public Service had “failed to exhaust their administrative remedies before the (U.S. Nuclear Regulatory) Commission,” and waived the right to raise their objection on judicial review.

Plant operator Entergy (NYSE: ETR) is allowed to continue running the plant under a new 20-year license extension received in March 2011. However, the state continued to say it would shut down the reactor when the license was set to originally expire on March 21, 2012.

Entergy agreed to seek a certificate of public good from the Vermont Public Service Board if it sought to operate the plant beyond March 21, 2012 in accordance with a Memorandum of Understanding signed between Entergy and state officials when the utility bought the plant. In 2006, the state General Assembly passed a law that invalidated the need for the certificate, but the state allegedly repudiated the MOU. Entergy sued Vermont officials in April 2011 for breach of the agreement, saying the utility had made efforts to gain state approval before filing the lawsuit.

To read the court’s ruling, click here.

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