ML17277A746

Forwards Util 830725 Memo Declaring Default on Obligations to Complete Projects 4 & 5 & Telegram from Bonneville Power Administration Confirming Intent & Authority to Fund Completion of Unit 2

ML17277A746
Person / Time
Site:	Columbia, Satsop
Issue date:	08/15/1983
From:	Sorensen G WASHINGTON PUBLIC POWER SUPPLY SYSTEM
To:	Schwencer A Office of Nuclear Reactor Regulation
References
GO1-83-0395, GO1-83-395, NUDOCS 8308190017
Download: ML17277A746 (6)

Text

S r~ REGULATORY <FORMATION DISTRIBUTION S EM (RIDS)

ACCESSION NBR: 8308190017 DOC. DATE: 83/08/15 NOTARIZED: NO DOCKET; 0 FACILs50-397 WPPSS Nuclear ProjectE Unit 2~ Washington 'Public Powe 05000397 STN-50-.509 WPPSS Nuclear Project< Unit 5r liashington Public 05000509

,50-5i3 wPPss Nuclear Projectg Unit ui washington Public Powe 05000513 AUTHBNAME AUTHOR AFFILIATION SORENSENgG ~ 'CD Washington, public Power "Supply System AECIPBNAME AECIPIENT AFFILIATION SCHKENCERqA ~ Licenssng Branch 2

SUBJECT:

Forwards util 830725 memo declaring default on obl'igations to complete ProJects 4 8,5 II 'telegram fiom Bonneville power Administration Confirming'intent 8 authority to fund completion of Uni,t 2.

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Washington Public Power Supply System 3000 George Washington Way P.O. Box 968 Richland, Washington 99352-0968 (509)372-5000 August 15, 1983 G01-83-0395 Director of Nuclear Reactor Regulation Attention: Mr. A. Schwencer, Chief Licensing Branch No. 2 Division of Licensing U.S. Nuclear Regulatory Commission Washington, DC 20555

Dear Mr. Schwencer:

As we discussed via telephone on August 4, 1983, the Supply System was declared in default on its obligations of Projects 4 and 5 on July 22, 1983. A copy of an internal Supply System memorandum on this topic is attached.

Also attached is a copy of a'elegram from the Bonneville Power Administration, confirming their intent and authority to fund completion of WNP-2 from Bonneville revenues.

We will keep you advised should the situation change.

Very truly yours, G. C. Sorensen, Manager (Acting)

Nuclear Safety and Regulatory Programs cc: R. Auluck, NRC M. Thadani, NRC A. Vietti, NRC NS Reynolds, D8L WS Chin, BPA A. Toth, NRC WNP-2 parol

'i 8308i 5 8308i90017 05000397 ',

PDR ADOCK A PDR x3

A SPECIAL MESSAGE SERVICE FOR EMPLOYEES OF THE WASHINGTON PUBLIC POWER SUPPLY SYSTEM A publication of Public Affairs and Information. If you have any questions, contact Kathie Knight, 372-6326, mail drop 325.

July 25, 1983 "EVENT OF DEFAULT" DECLARED ON PROJECTS 4 AND 5 On July 22, Deputy Managing Director Al Squire was served with a legal document (an interrogatory) by Chemical Bank. The interrogatory asked if the Supply System was unable to pay its debts incurred in the ownership and operation of the projects (MNP-4/5) as they become due. An "Event of Default" was triggered when the answer was "yes."

This morning, $ 25,565,088.49 in cash and securities (the remaining Project 4/5 funds) were transferred to Chemical Bank upon their demand under the Bond Resolution. According to the bond resolution, during an "Event of Default" revenues received by the bond fund trustee (Chemical Bank) shall be first used to pay the expenses and liabilities paid or incurred by the bond fund trustee. The trustee is obligated second to pay the cost of operation and maintenance, repair and replacement of the projects and third, to pay the principal of and interest on the bonds.

I CS I Pii)!'NCZ CSV 5t:) ".2Si) 51 v) 1 1'DRV PC;RTLAND OR 1 2e (')8 -t) 2 () 2"'8P ES T PNS DGV ~iAZUR WASHINGTGN PUP LIC POWER SUPPLY SYSTEM RPT L')LY N('8 f)LR BY 5P i~i ~ DLR 2'c) 88 GEOR GE WASH I iV G1'N WAY RI CHLAND WA DEAR i%R ii)AZUR~ ON iMARCH 25 1 983 WF ADVISED THE SUPPLY SYSTEM THAT WE W('ULD PAY r" CR THE CGST TO CGi~)PLETE CGiNSTRUCTI ON Or 'WNP P 2 FROi~) e PA RFVFNUES ~ TODAY'HE'ENERAL ACCCUNTIN6 OFi ICE CONF I RYiED FGNNE)J I f LE' AUTH CRI TY TG CCl)PLETE THE P RO JECT.

WE IN F,.EiViViEVI LLE HAt/E APPRECI ATED THE CGNT'liVU.".D CCFi>! I TNENT OF THE SUr'PLY SYSTE,R TC PROJECT 0 2 AND THE SOUVD VRGiGRESS Trl AT r! AS e EEN 'lADE IN R.". C NT WiEEKS AV D ~) OiV THS T'rl E DE[) I CAT I GN Or TH(!Sr Ei)PLOY EES Al'HE S I f ""

HAS I-'F,.EN CC")NF. ADDABLE I Ni THF. LI (rH1 Gi'" THE Af)'JE RSE RE) ORTS RE(iARDI N G OUR A.";~I LI TY TO 5FF TH IS P R('F.CT THROU(!H TO I TS CC'PLF,1 I GN ~

WE W I SH TC C Cl~l~) FND AiVi D 1'NAIVE YOU ALL F CR'H IS C Civil') I 1 )i ENT AND OVDICATIGV.

1HF. SUCCESSr UL CCRPLFTI GN AND Ol ERATI OiV OF 02 ARE GX THE PRO) ER TRACK AVfi t)E CAN PR()CEED t.'I TH C(;V. I DEVCE ~ SINCERELY PETER T J(,HVS GiV AD~il V I > TRATOR

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A SPECIAL MESSAGE SERVICE EMPLOYEES OF THE WASH INGTO JBLIC POWER SUPPLY SYSTEM A publication of Public Affair and Information. If you have any questions, contact Kathie Knight, 312%326, mail drop 325.

August 2, 1983 GENERAL ACCOUNTING OFFICE SAYS BPA HAS AUTHORITY TO COMPLETE PLANT 2 r

The following letter was sent today to Managing Director Don Mazur from Bonneville Power Administrator Peter Johnson.

Dear Mr. Mazur:

"On March 25, 1983, we advised the Supply System that we would pay for the cost to complete construction of WNP-2 from BPA revenues. Today, the General Accounting Office confirmed Bonneville's authority to complete the project.

"We in Bonneville have appreciated the c'ontinued commitment of the Supply System to Project 2 and the sound progress that has been made in recent weeks and months. The dedication of those employees at the site has,been commendable in the light of the adverse reports regarding our ability to see th'is project through to its completion. We wish to commend and thank you for this commitment and dedication.

"The successful completion and operation of 82 are on the proper track and we can proceed with confidence.

"Sincerely, "Peter T. Johnson, Administrator Bonneville Power Administration"