The state had argued that the legislative record used by Entergy in its lower court arguments was spotty and the company "cherry-picked" the most damning comments by lawmakers. And it said Entergy had gone along with the state's safety concerns in legally binding agreements.
The appeals court didn't buy it, calling the state's account of the legislative record "inadequate and misleading."
While the brunt of the decision went against Vermont, it rejected one complaint by Entergy. The company had argued that the state violated the U.S. Constitution by trying to require Entergy to sell Vermont Yankee power to the state's utilities at bargain rates as a condition for getting a renewed state permit.
The court said because no such deal was ever struck, the issue wasn't ripe. But it issued a stern warning to Vermont not to try it in the future.
While it rejected Entergy's complaint, "we do not suggest that any (deal) providing favorable pricing for Vermont residents would pass muster," it said.
If Entergy had prevailed on the claim of a violation of its constitutional rights, Vermont could have been required to pay its legal bills, estimated last year at more than $4.6 million and climbing.
Overall, Entergy officials said they were pleased with the decision.
"We have felt strongly for a long time now that the state of Vermont's acts ... were pre-empted by federal law," Terry Young, Entergy vice president for nuclear communications, said in an email.
Sandra Levine of the Conservation Law Foundation, one of several New England-based groups seeking the plant's closure, called the decision "a disappointing failure to allow Vermont a stronger say in regulating this tired old plant on the banks of the Connecticut River."