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Washington Public Power

October 25, 1987

The Los Angeles Times carried a story concerning the financial plight of Public Service Co. of New Hampshire (Part I, Oct. 14) and possible bankruptcy. Two examples of bankruptcy were mentioned, a small private utility and the Washington Public Power Supply System.

The Supply System has not and has no intention of declaring bankruptcy. A formal executive board resolution to that effect has been adopted.

This misconception about the Supply System is undoubtedly due to the highly controversial 1983 Washington State Supreme Court decision declaring the power purchase agreements for our nuclear units Nos. 4 and 5 invalid, thereby eliminating the revenue stream for those projects.

The ensuing publicity has tended to focus on the $2.25-billion bond default and massive ongoing litigation.

Challenges to the underlying power purchase agreements for our other nuclear units--Nos. 1, 2 and 3--have been decisively defeated at all levels of the judicial system, culminating in the refusal of the United States Supreme Court in 1986 to review favorable lower court decisions.

The Supply System views agreements with its member utilities and bondholders as contracts to be upheld and will continue to honor such contracts unless ordered otherwise by a court of competent jurisdiction.

There are, unfortunately, many bondholders in the Los Angeles area who were injured as a result of the 1983 decision.

However, there also are, I am certain, many others who are holders of units 1, 2 and 3 bonds and continue to receive tax-exempt interest on their bonds for which we have never missed an interest payment.

LOUIS H. WINNARD

Chairman

Audit, Legal & Finance Committee

of the Executive Board

Washington Public Power Supply System

Richland, Wash.

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