Washington Public Power Supply System

Fourteen public utilities across Washington state voted Monday to approve a $226-million settlement that would let them out of the giant Washington Public Power Supply System securities fraud trial. "It's a (settlement) we can certainly live with and handle, and it won't have great diverse . . . impact on our state," said Tacoma attorney Albert Malanca, who engineered the complex agreement involving utilities, the State of Washington and the federal Bonneville Power Administration.

Washington's Supreme Court on Thursday ordered a trial on some aspects of bondholder suits against the Washington Public Power Supply System, its professional advisers and others involved in the system's $2.5-billion bond default on two defunct nuclear power plants. The 6-3 opinion overturned the complete dismissal by the King County Superior Court of both individual and institutional bondholder suits.

Whoops. It's back. WPPSS--the Washington Public Power Supply System, biggest municipal bond defaulter in history--plans to return to the bond market for the first time since it failed to make good on $2.25 billion in bonds in 1983. Next week it expects to sell $450 million in bonds that will replace high-interest bonds used to fund construction of two incomplete nuclear power plants.

Not long ago, about two dozen well-tailored attorneys piled into a pair of federal marshal's vans outside the U.S. District Court here for a most unusual tour of this desert city. Here were some of the nation's best securities lawyers in search of a courtroom--specifically, one big enough to accommodate the mammoth securities litigation surrounding the ill-fated Washington Public Power Supply System. Accompanied by trial Judge William D.

Lee Oxsen still winces at the nickname that was affixed to his utility back when it was synonymous with wild cost overruns in nuclear power construction. Oxsen much prefers "Supply System." His preference is understandable. In 1983, when the Washington Public Power Supply System defaulted on $2.25 billion in bonds in the biggest municipal bond failure ever, nothing summed up its problems better than the acronym WHOOPS. Now, the nickname seems dated.

State officials today announced a proposed $226-million out-of-court settlement that could end the $2.25-billion securities fraud trial over the default on bonds to finance two Pacific Northwest nuclear plants, Washington Public Power Supply System plants Nos. 4 and 5. The settlements, if approved by the remaining defendants and the federal judge presiding over the trial in Tucson, Ariz.

Executives of two unfinished nuclear power plants that have been mothballed for a decade voted Friday to study whether they should be closed for good or converted to fossil fuel electrical production. The executive board of Washington Public Power Supply System said it hopes to decide this year on the future of the plants and how to repay bonds issued to build them.

The Bonneville Power Administration and the region's four private utilities announced the framework for a settlement of a $2-billion breach-of-contract suit over the mothballing of a nuclear power project. Under the preliminary agreement, the private utilities will receive power from BPA equal to their investment to date in the Washington Public Power Supply System No. 3 nuclear project.

The Bush Administration last month approved the sale of nuclear power plant equipment to China that would have allowed backers of a canceled U.S. plant to recoup $500 million, but later rescinded the license after protests from the Nuclear Regulatory Commission. Two weeks after issuing an export license for the sale, the Commerce Department rescinded it after complaints from the NRC and Sen. John Glenn (D-Ohio), chairman of the Senate Committee on Governmental Affairs, who said the deal violated a 1985 congressional resolution on nuclear non-proliferation, officials said Monday.