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, Washington Public Power Supply System, 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)

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ACCESSION NBR: 8308190017 DOC. DATE: 83/08/15 NOTARIZED:

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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 8308i90017 8308i 5 PDR ADOCK 05000397 A

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A SPECIAL MESSAGE SERVICE FOR EMPLOYEES OF THE WASHINGTONPUBLIC 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.

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A SPECIAL MESSAGE SERVICE EMPLOYEES OF THE WASHINGTO JBLIC POWER SUPPLY SYSTEM A publication of Public Affairand Information. Ifyou 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"