MONTPELIER, Vt. — Vermont’s only nuclear power plant will shut down by the end of next year, ending a nasty legal battle over the future of the 4-decade-old plant, Entergy Corp. announced Tuesday.

The Vermont Yankee Nuclear Power Station is expected to cease power production after its current fuel cycle and will begin being decommissioned in the fourth quarter of 2014, the company said. The station will remain under the oversight of the Nuclear Regulatory Commission throughout the decommissioning process.

Additional Photos

The Vermont Yankee Nuclear Power Station sits on the bank of the Connecticut River in Vernon, Vt. AP

Workers man the control room at the Vermont Yankee nuclear power plant in Vernon, Vt., in this 2009 photo. AP

The New Orleans-based company has been battling with the state since 2010, when the Vermont Senate voted against a measure that would have authorized granting Vermont Yankee a permit to operate for an additional 20 years. Lawmakers were concerned about the plant’s safety, age and misstatements by plant management about components at the reactor.

“This was an agonizing decision and an extremely tough call for us,” Leo Denault, Entergy’s chairman and chief executive officer, said in a statement. “Vermont Yankee has an immensely talented, dedicated and loyal workforce, and a solid base of support among many in the community. We recognize that closing the plant on this schedule was not the outcome they had hoped for, but we have reluctantly concluded that it is the appropriate action for us to take under the circumstances.”

Denault said that when it closes, the plant will be placed in “safe-store,” in which federal regulations allow it to be mothballed for up to 60 years while its radioactive components cool down before removal.

Reaction from state leaders was swift and nearly unanimous: The closure is overdue and welcomed.

“This is the right decision for Vermont and it’s the right decision for Vermont’s clean energy future,” said Gov. Peter Shumlin, who has been critical of the plant.

Others said the company’s plan to close the plant over several decades is unacceptable.

Vermont’s U.S. senators, independent Bernie Sanders and Democrat Patrick Leahy, both said they would push the Nuclear Regulatory Commission to reject Entergy’s plan, speed up decommissioning and ensure that Entergy pays for the full cost.

The NRC said in a statement it would “continue its rigorous oversight of the plant through the rest of its operations and into and through decommissioning. We have a decommissioning process that the details steps that would have to be taken by Entergy going forward.”

The decision to close Vermont Yankee was based on a number of financial factors, including low wholesale energy prices, high costs and what the company called a flawed market design that artificially deflates energy prices.

Nuclear plants have been under significant price competition due to the recent natural gas boom in the United States. Vermont Yankee, among the oldest and smallest plants in the country and located in a state with one of the nation’s strongest anti-nuclear movements, had long been considered among the most likely to be shuttered.

State Rep. Tony Klein, chairman of the House Natural Resources and Energy Committee, said he wasn’t surprised Entergy decided to shutter the plant, given the economic issues at hand.

“I commend Entergy for giving the state and the workers a year and a half notice … so there’s as minimal economic impact as possible,” he said.

Rich Sedano, director of U.S. programs for the Regulatory Assistance Project, said the nuclear plant’s small slice of New England’s power supply — about 2 percent — means the closure will have little effect on consumers. It will require more reliance on natural gas and may push the region toward more solar and wind production, especially as states try to meet mandated standards of energy from renewables.

An industry group was not so positive.

“This closure will be a great loss to the state of Vermont, the regional economy and consumers, and the environment,” said Marvin Fertel, president and chief executive officer of the Nuclear Energy Institute.

Vermont Yankee opened in 1972 in Vernon. In the past it has provided as much as a third of the state’s electrical supply but today nearly all of its power is shipped to electric companies in neighboring states.

After being granted the federal license it also needed for continued operation, Entergy sued the state and won a first round in federal court in Brattleboro.

The state appealed but largely lost earlier this month although Attorney General Bill Sorrell said the court overruled a part of the lower-court decision saying the state had violated the U.S. Constitution by trying to demand cut-rate power from Vermont Yankee if it were allowed to continue operating.

The company employs about 630 people, a staffing level that will gradually be reduced as the plant moves through the stages of decommissioning.

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