ML20093C818: Difference between revisions

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| number = ML20093C818
| number = ML20093C818
| issue date = 04/25/1973
| issue date = 04/25/1973
| title = Responds to 730403 Request for Info Re Antitrust Review Responding to Item 9 of App L to 10CFR50,requesting Info on Nonaffiliated Util Sys W/Smaller Peak Loads.Most 10CFR50, App L Items Not Applicable.Doj 730412 Ltr Encl
| title = Responds to 730403 Request for Info Re Antitrust Review Responding to Item 9 of App L to 10CFR50,requesting Info on Nonaffiliated Util Sys W/Smaller Peak Loads.Most 10CFR50, App L Items Not Applicable.Doj Encl
| author name = Stein J
| author name = Stein J
| author affiliation = WASHINGTON PUBLIC POWER SUPPLY SYSTEM
| author affiliation = WASHINGTON PUBLIC POWER SUPPLY SYSTEM

Latest revision as of 00:47, 25 September 2022

Responds to 730403 Request for Info Re Antitrust Review Responding to Item 9 of App L to 10CFR50,requesting Info on Nonaffiliated Util Sys W/Smaller Peak Loads.Most 10CFR50, App L Items Not Applicable.Doj Encl
ML20093C818
Person / Time
Site: 05000000
Issue date: 04/25/1973
From: Stein J
WASHINGTON PUBLIC POWER SUPPLY SYSTEM
To: Braitman A
US ATOMIC ENERGY COMMISSION (AEC)
Shared Package
ML20093C821 List: ... further results
References
CON-WPPSS-112, FOIA-84-603 NUDOCS 8407120528
Download: ML20093C818 (20)
v • d • e


Text

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Waslaington Public Power Supply System l

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A JOINT OPERATING AGENCY ATTACHMEtiT 3 b P. O. 00X tt4 301 FIFTH AVE. RICHL AND.WASHINGTO N M352 T ELE PHON C (57DTib$t41 April 25, 1973 Hr. Abraham Braitaan, Chief Office of Antitrust and Indemnity Directorate of Licensing U. S. Atomic Energy Comission Washington, D. C. 20545

~

Subject:

WASHI!!GTON PUBLIC POWER SUPPLY SYSTEM WPPSS !!UCLEAR PROJECT !!0.1 A?(TITRUST REVIEW FOR LWP-1 1.cference : Letter, Directorate of Licensing to J. J. Stein, April 3,1973.-

Dear Mr. Braitman; *

'The reference letter requested infomatien for antitrust review in response to Item 9 of Appendix L to 10 CFR 50. Item 9 requests Oformation on "ncn-affiliated" electric utility systems witn peak loads smaller than applicant's which serve either at wholesale or retail adjacent to areas served by the applicant.

In view of the special circumstances of the Washington Public Power Supply System (WPPSS) and WPPSS Nuclear Project flo.1 in particular, as well as the unique nature of Pacific Northwest Power planning in general, most of the twenty Items (including tio. 9) in 10 CFR 50 Appendix L would not appear to be directly applicable, nor would en nttempted literal response appear to meet the needs of the anti-trust review.

1:?PSS is a nunicipal corporation of the State of Washington which is engaged in the generttien of electric energy. WPPSS does not engage in distribution or retail operations. The proposed WPPSS 1:ucicar Project No.1 is plant number 6 of the Hydro-Thermal program, a coordinated planning effort by four Northwest investor owned utilities,104 public and consumer osned agencies, and the Bonneville Power Administration, all acting as the Joint Power Planning Council.

.Hr. I!rattman page 2 April 25,1973 WPPSS th clear Project flo.1 will be owned by the UPPSS, comprised of

. 21 public and consumer owned agencies of the State of Washington. The project's capability was offered to all utiln.ies in the Northwest which participate in the Joint Pcwer Planning Council and is being purchased by'104 public and consumer owned agencies through " net .illing" agreerrants and by 5 investor owned corpanies hrough " exchange" og sements.

With this background, lir. Joseph B. Knotts, Jr., counsel for the Supply System, contacted your office and, in turn, the Department of Justice, for clarification and guidance as to appropriate responses.

The Justice Department's reply, uhich is attached (attachment A), suggests that our response to Item 9 be limited, pending further notice, to a map shoaing all non-affiliated systems. In accordance with that suggestion, which we ur.derstand is agreeable to your office, we are submitting the following information to facilitate the antitrust myiew:

Letter Subject Description Atta ch r.cnt A Justice Department . Suggested approach for Letter to lir. Knotts, submitting informatien 4/12/73 -

requested by 10 CFP,50 Appendix L D Tabulatica of lien- A tabulation of Affiliated Utilities utilities in the Pacific florthwest not participa-ting in th.e Project and their power source C Service Area liap -

  • Service area map of Ilon- Af fil iated Northwest utilities Utilities not participating in the Project D Official Statment - 1) Descript' ion of UPPS!

$25,000,000 in Revenue 2) Description of Proj(

Ilotes for WPPSS !!ucicar participants Project flo. 1 3) Ibp of Service Area!

of Project Participants

4) Copics of major contracts asscciati with the Project
5) Financial and Icad-resource data for project participan
6) P.cgional (West Grou load-res curces forecast

_.- Hr. Braitman

. page 3 April 25, :1973 If further information is needed, please let'us know.

Very truly yours, blE -

J. J. TElli Hanaging Director JJS:DLR:mdm

, Attachment 5

p 9 e o

b 9

e Q

STATE OF HASillflGT0!(

) ss COUt(TY OF BEllT0!! h)

On this day personally appeared before me J. J. STElit to me known to be the ind.ividual described in and who executed the with'in and foregoing instweent, and acknowledged that he signed the same as his free and voluntary act and deed, for the usds and purposes therein mentioned.

Given under ray hand and official seal this 25th day of April, 1973.

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IlotaryPub1Icinandfor the State of Washington, County of Benton e

y AnAtlinti:T A Hl' M .l. V C / J

$, UNIT STATES DEPARTMENT vi ,,USTICE

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.a n.r.,i.e.:.:.u.a . G TEK:JJS 60-415-0 April 12, 1973 Joseph Knot s, Esquire Suite 1050 1747 Pennsylvania Avenue, N. W.

Washington, D. C. 20006

Dear Mr. Knotts:

As attorney for Usshington Public Pouer Stipply System you have inquired uhether. the System, in cot.ncetien with a forthcoming application to the Atomic Energj Cor:aission, must furnish the data specified in cach of the tuency items of Infor=ctica Requested by the Attorney General for Anti-tutust Revicw. The System is reportedly a municipal coroo-ration . nd joint o conposed of appro::perating imr.tcly 18 agency publicofutility the State of Washington, districts and the citics of Richland and Scattic. The power to be pro-duced by the proposed nuclear unit will reportedly be made available to the foregoing entitics and to nu:scrous other public utilitics in the Pacific Northwest.

Because of the broad ownership of the prop'osed nucicar unit and the even broader access to power from the proposed unit, you question uhether there is need in this instance fou. all of the information which is customr.rily required for antitrust revicu of AEC applications. s'ou also note that, under the usual information requirem..nts, cach of l the entitics composing the Syste:n vill be required to sub-mit a cortain amount of information, and inquire uhother this is decacd necessary.

We have revicued this matter in the light of the points you have raised, the circumstances attending the System's ouncrship and operations, and our previous co:perience in connection with the application submitted by the System with respect to the llanford No. 2 liuclear Unit.

r ATTACIW.EliT A Our conclusion is that the System should sub: it the informa-tion specified subject in the 20modificat' to the following items pertainingions. to antitrust review, Item 8 - Submission of this data may be deferred, pending notice from the Department that it is nooded.

Item 9 I cap showing all non-affiliated systems may be submitted ir lieu of the list.

Submission of other data cry be deferred, pending further notico.

Items 11 and 12 - Data relative to the System only need be furnished. ' Submission of data on the entitics comorising the System may be deferred, pending further notice.

Item 15 - Submissic of this data may'be deferred, per. ding furthc. notice.

Item 20 - Sdbmission .of this data may be deferred, pending further notice.

We trust the foregoing modidic~ations will en..bic the System to expedito preparacion of its application.

Sincerely yours, TIl0 MAS'E. KAUPER -

Assistant Attorney General Antitrust Division B!: Jose icf,.!f{ h b.4 swdhn aunders Chief, Pub $icCounseland Legislative Section

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t ATTAtllMEllT B Tabulation of lion-Affiliated Utilities The folloutng list includes those investor-owned utilitics that are not participants in the Project:

(1) California Pacific Utilities cc.pany (2) Idaho Power Company (3) Utah Power and Light Company The list on the following pages shows the other utilitics that are riot Donneville Power Administration Utility custcmers and are not participants in the Project. The list also indicates the utility from which each of the non-participant utilities receive either all

.or a portien of their bulk povdr supply. As may be seen in the tabic, only three utilitics, the cities of Dubois, Soda Springs, and the City of !!ciser, Idaho, buy their power from non-participants in the Project.

l.

c __ __ ___._____ _ _ _ ___________ ____________ _ _______________ _____ ______

Utility Utility Source of Power

1. City of Dubois, Idaho Utah Power and Light Company k

Z, Village of Plummer, Idaho Washington Water Power Company l.

k City of Soda Springs, Idaho Utah Power and Light Company 3.

4. City of Weiser, Idaho Idaho Power Company
5. City of Woricy, Idaho Washington Water Power Company City of Ashland, Oregon Pacific Power & Light Company 6.

/

7.' Nehalem Basin Pegoles . -West Oregon Electric Cooperative, Inc'.

Utility District

8. Alder Mutual Light Company City 6f Tacoma, Washington
9. Cashmere Water, Sewer Chelan County PUD, Washington arid Light Company 10 Cit,f of Chewelah, Washington Washington Water Power Company II. Entonville Fower and Light City of Tacoma, Wachington Comphny 12 Elmhurst Mutual Power City of Tacoma, Washington and Light Company ,

13 Town of Fircrest . City of Tacoma, Washington

14. Lakeview Light and Power City of Tacoma, Washing.on Company 1 15 Town of Milton, Wa.shington City of Tacoma, Washington
16. Modern Electric Water Washington Water Power Company Company
17. Ohop Mutual Light Company City of Tacoma, Washington i
18. Parkland Light and Water City of Tacoma, Washington Company
19. Peninsula Light Company, Inc. City of Tacoma, Washington 1

Utility Utility'- tource of Power

20. Preston Elc3tric Utility City of Tacoma, Washington
21. Town of Steilacoom, Washington City of Tacoma, Washington

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22. Town of W . S,1- . Washington Douglas County PUD,, Washington
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- Kaiser's cornmm stock closed yes. an y, ,- method of developing

, .s a .pure . . cult $.e Rf such bacteria. m . m.v Paten,ts. [36.]

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M _- , duce the cost gap between Japanese l J

and American automobiles, Detroit

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', is scrambHng 2 aummtHts feto ries, increase quality and improve i

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more efficient plants an y part 3

Anod, er.O,,uh,. ear P"roj[ect

. . -* + s 2,of hthe answer to the c enjoy frt m an undervalued yen and y  !' ..-

tax forgiveness on dxported prM.

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Immediately after tee announce- acts. ,

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.- The cost gap was put at $1,000 to l i

{}I SEAT 11E May 27-The Yashing. l - ment that the No.3 plant would be

' $1,M a car by a Federal Gove~rn-

ton Public Power Supply System will mothballed for three years traders ment studyin 1980. Subsequent Gov.

l IQ off nearty 1,400 craftsmtn nad , dropped the price eey werMung 2 ernment studies have put the gap at i

begin to , demobilize and .

pay for the power system's bonds by pres & ' .7.,pne to two points. $1,2 Light trading 2 $2,000 on a oc. ical subcom. ff

{mday Muse of a lackanother of its m= clear p;c acts on Emrred at the lower level and then , pact car. This cost dvantage,. -*

1 mm htn any oGer factor etimleaves on! one nuclearplants hcof M"The street did not panic five ;.; adingquicklycametoastarwistiU~ ecatase b ,

cast an ominnus cloud over, has the thsy wpe y aware of the Amrb aum industry, mee cor,.

Hon program ~ . . _Its,124.. bil., C, . hs "one tradersaid. ; ' prob- sidered the most productive in the
'Ibe power system's effecutive = H . , .

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y g by 'world.' .-

board took the action today-m the 74 % whoops ahtheby - Philip;Caldwell, chairman of the in ad J ,ers sai and si on w y "U ing the J Iim in could not float 3963 mil. fUnit3. .

- 9 .,

landed cost advantage number of

,nemary to-menplete w Bonds on Unit No' 3 'ar'e#70 ,' $2,000, as we see it, the yen is about

.l the project. Board membert shid the '". backed by the Bonneville Pow Ad- SE, the tax burden is about 3600 @

power system's looming default Tues- eml*tration a Federal tha and the balance of it is
  • i day on $2.25 billion in bonds. sold to % markets 50 percent of the electricityelse.
  • So if you callit one- E one.

construct two now-terminated nuclear ponsumed in the Northwest. Four of third, one-third, then I would say h H'- 2'-the region's largest investor owned tw> thirds .of the ~ problem 1s

  • SNtl a ci - p nutilities own 30 percent of the project. wrapped up in areas which only Financing 1s Seeght y . governants can do sornething [

-Over the next 30 days, the" power =, " the tends on anothballed Unit I andBmneville abet. . .. ;is backing 100 per F system will continue to seek Jinanc. .!~31soof the 98 percent completed Unit 2': Mr. Caldwell's contentions, if not ing Ifitisnot forthenraing,ifpilltake Jor.which fuel will be delivered next .his exactbmekdown of the amounts o]g the final step to preserve the plant for * .?tet By comparison, 88 Northwest - , involvedt are supported by other \

three years and lay off ano'h'er 540 -uullties have packed bonds on the

. . auto industry executives and those @

workers. A year ago, the power sys, ghandmedunits. . In~mlated fields;

, tem also mothballed for finantial rea. rs Peter Johnson, Bonneville attr ints. ' .e IAe L Morgan, chairinan of the s sons a 80 percent completed unit, M * -

Ml" " Ii' ~ "

known as Unit No. l. ,; _ ,% . , Continued on Page 44 , -

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p;,; erster/ predicts est the nrivate~

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i,g .. e, l' annines win sue en M l' preserva$on. G.

tatt s ,saak to a new low agains states donar today on th m a* ' " "I  :::;. 3 I r '- E Drumman, tel""i 4

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'gbe decline is ukely to

,M c etPortland, Ors:,1bramend'fmapacted quarrel over U:

pl  :::..

g; 2 R R . R *N'.: 5 ..-- m l 1 . lm,]e e; y a0 mis week In'a letter tojhe U economic policy at Wi

,1 -l , f 54. (-  ;;- d ' m .d , power est it considm tw san. :. .ya.. mis weekend, banke:

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e are to' ownershipagreement. 7'"financiag's breadt'ofits ~ m l.- wh W 7T 7 s Frangens Mitterrand to co

  • 4 )., g l4 8) . ' ll ~ l l M, gf I caution. "But constr=*= en Unit 3 high American interest rz.

r e . . " . e sw Su l l } Lang ";1' r

e Analystsview thepreservatlan with

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,J.

.  ; iM J sw) 8 d Y#'; i has a betterchanceof restaning than strong dollar.they produ:

~ ously hurting p

.l Q *- -

,,"'Q gs/g j *d7 84 l *9 r e on Unit 1becauseof Unit 3's30pensat f(

l I r l bond throughoutthe 3l Jy :.j , uga e- backing by investor owned utili-

r (a
se r m r- r ', * ** "H AB European leaders I
l sl l eegr.
' nw Q g - %mj f.* 'l ties,"* *saiddent EDeen Austasi, vice primi- donar is overvalued at p hw 4r -I E 4 pm" .fl ! Su '

of municipal rwearch forDrexel sd2nd ." ' %t54 I I are worried bythe depress

-e .... m .r 4 a

g '.: ~

, ,, g g ;N {1 4 R 2 r' bouse.....W :I Burnham Iambert,[ a brokerage has on their economies by the mst of imports invoice-ag r r

. . - 8 %g ::

=2 :::,

j [g . m @y >N :D * , I' whether Unit 3 at some point will beB nter QUOtht10nS -

  • l dt id '.d

- FR4 BAY

  • MAY 27* t 9b3'-

e ....

c-

' ) 1e '8

'. sw aw justi l

  • ""n"a'ble for thought, let alone fort'd consideration," he said in an inter.

"Th*t 0 Pee '"bl'c' 5 " * '"*" -

PolicyAttack But President Mitterran bC'~':".l"' '

e r .e s 4 ste- as i sman

]@ - jf >* *$ l ' sd 2

,ged, a[iaI ',hofrev5r, also' ques

. further thanbyan

. - sw ames os um sesamas, ow em 4 l- ,; -l

  • l meeting participants g t'lon the y,g -w was eQ:-g :p ,3.q in

, for Unit 3 The North- tacking the Reagan Admh j's

+ '

" .= hsw zw ' west is in the, throes of mit electricity mcnetary poucy, demandi.

as -% surplus that is expected to continue I w "

-% S,dn sid

  • ' ' "12' .*/fd s.g: N :O d'*d . f*

United States intervene on Into the rnld.1980's. It is 'imfM1y the . change markets to reduce t a

E*T. .*

..T e dN l I I region wSI need power from Unit 3 in vahie and surnmon an int 9Jb w"""  ::E"_18IU r 7-u nM d "i $ $

M "" Y@Mi@ 3R

.n "l :

w iE ir-n', M Jf*'oY;.n Jui Y J.,

5 ' '

  • 1996if the reactor were mmpleted on schedule, Mr. Johnson said. The only Pown buyws in & are Soudtwest .g, Q "4
  • *Drld s

' dg nw.. *.E's.s"g...

i iff a Nr"E Utilities but they are not willing to pay In Psris, the do!!ar w. '-

w(.n R

(

'* k w s m ad N - 6 e 8

l 4*f'8 on! 30 mills per kilowatt-bour. Yet seven and a half francs f

-k M ,w h

  • m
n+.1

.g ag' g 5 3-u $..l*.g)

  • 2 .::. ' '.u3 e vi < Su u) ,3g ug g r -r U. 3's fully allocated costs 7,nft mms. Mr. Johnson questions time areevn, 80 to M2&g reacMag 7.4775 yesterday. Stre y

'w a g unirTe is I! II'!!'

h. N ."

smn J

s% <= d *

~

whetherit "is prudent" to run a plant agCnst other European cun .

! d 'M im 4) y' 's" g r~g $*

tk k l'"T* .

s..  :..l . 2 isu

" 9 ~ 4 9.6 in which mu ourcosts."

"we 2 would tu'notlbe' recovering i' , well,it again broke througi chologicallyimportant 2.50.:

i;gs- . 7 stw w.. 'h" W* IN 9l h ~4N 'l i rier.in Frankfurt to rea news

%"M".

  • olh,,

R ::: i:

  • 1-l. l l l :asw .arh r a

. f N' r

  • The Bonneville admintctrator said that if his agency was forced to fi- marks, its Mghest level s i 2..
  • ] ffA '

l l lr f' ~l T nance construction of Unit 3, Bonne- Novanber. In Zurich, tr N*

n. u5 O0 Qb!...y "M",,8,;. t'(2: e-;s-,' ,=4 - lr ville would nead to raise rates region- reached 2.0831 Swiss francs 9, ,,

I r~n v , M e4 g M yt+.. g . .-

  1. tx eig

, .g* . ll wide by 30 nercent. This would also have animpact on sonnevHie's finan - F 7d*/'.2 ,

m.,,,,r.

l5 q E:*..: . [f i

m " g4:

h , p"." .

ww ..11E eage":2 ; 4 r.8).e ij -r-3 '. 9 ty 13 l cial stabuity. Bonnevine is higMy leveraged,with 87 percent ofits revel exchange the franc's decline tre e

'4 e s l tainty in the face of the surr

f. ;$

9 . . . .

u Okm un g

"h 4 =:

4.':D mw * : Id d e n. N: v..D e=7 .:;g"5

'+% . ."34 ist' ! 9I z$ $

r l' 4.

s costs, including interest Hamadag on "ference where currency va l nues arrenty soing to pay axedthe 86.2 b YN I. '. 9 . r r r r r Units 1,2 and 3. '- danceln the fmne appeared 1 1 R. :: h, arr'" k 'SM2"E u

D L*fn,"$'g'N $ ..':2 -  % r l .b W .  ; '- '

the market's belief that F

  • % . . . it g l4  ; Hl  ;. '*

cially wtII be in default ce the bondAlthough the' powe

' 0 @ 3, 48,3 9- 1, em. ::e e e e r tw e ful concessions to the Fre 1

0 y'; 8 4 S .  :" 'l 9 8Y . l debt for Units 4 and 5 on "D=aday, l'N' (N:."E y L8 qi k'*$28-

!'D..w.>b 7"E

- T* * ::.. a sa.Q , Q Fl lr 4 le Judge H. Joseph Coleman of King Canty Superior Court issued a writ-mands at the conference.

a R F U ullwm8 {*m#s '$ ww us:: r ten order today .PalafulEconomic Dilemma

!l  %- b" Ti ' "'t t *%: : M ,t '

r i en and chemical sank, bondhold-ider "There is m si fanD!..

..:$ 0"*o . se# iat E.!!L*se u i*s M"hsw R-"D" ali '4

- mMA arw :.

m sw s r

Ed w h s

r

, m pausys Maasm@gn that whMthe -

, $ P** D u une

%w.RI f n 'I rg R D

3R" E sf 't ..:l m N 9 l I "I N tem in default pending the settlemett' ficially, that's why people w of some legal questions. This prevents - dollar now," said a dealer wit!

ser .n a ses l 9 %l l

, e inw e ion k SJ'. %  % bondholders from demanding that Lyormais, the big French state M P{'T...? DE

  • R ,":":5g'la @"+

e

,s= ; 27 ~ ! l that power system pay overdue debt bank. The dollar's strength ,,

ga g w %s. h 8P. Q a ,% %aw_ , [ "s"E M g >g rg within 60 days and from accelerating President Mitterrand in part t 27*

Mi 7 a

g ,", f, inl l UM, 4 ) , r e the total 32.25 billion debt and making the exceptionally weak franc it due and payable Aug.30..

am."". R:E 4 - -l l  ? created now wnfronts his S '

3 h" h'lm " IeTa7

  • -"& *{ %"tr'I"!is iE ils 23 .:.: *g. 90 '"..I iR 9 ' se *?'l The Seafirst Corporation,' Unit 3 Govemment with a painful ec.

ag h'- M D h '" N B*r"g' sw .2 8 M.g s%  %

e bond trustee, said it was inappropri- dilemma. - .

ate for them toatthisHme. mmment on the Unit - Either the Socialists must

$i 3 P. ~ :.-N 3 h tag Q W.

  • 9 :m N 'l_d, '7! '7! n A -m al a. aa  !

3'spresmation troduce ' unpopular new au

.a M..... E . y:uh p Ji M ,4 4 M- 1

^ .

2 A(EZ.- ?:L tan, g 2&,s:.

h " '

1 7 Xakasone .

Backs Rea; m .

O Q an I

1 l i ararbe of the Instaat tuimal erketr:g prospec- flear what the rtghts Of the bndhidders thew het and temptes pro eteres Ihay de THE w u s. u nur mrnN AL. bio.<l.,, Ji..e 23, i iii code simply te nell thew b eds and une a 4 tuses Thew smts c targe a that the tpmd dur- are.'says Rotwet Amdursay, a partner at

  • '* ar m

""',*3= ".prw"s u'"ve~h,e. fiwd a ar,~**=,.

s '~ kn ua,',i, da~ ~~,e~e.,

a b, a,,,,ta,m,d *=,

-Your Money Matten 'm"a~non. m "c'a***b.dhnwn i.">m"ve's memey unhout s*fi knddte of Ptential nas4cr 9 went thew i-i a unkn sta effect in 191 so trgal

- ~~~

s4se ams na urPss he 3 he .im a i r >~ ~ ~ d.utu,,~en mam, . f

,~,ue.m ,,,,um, ,he , .

, ca, ut .a ,,

I( \T/PPSS DefauIts on Iis l'ax-Exemfn Bonds, s ,wostreena.,,,o,, - .s b-.s ..ui base 1 happened tirfore." and No 5 plants wedd spiel owee late alte c

suits are premature smre default hasn't er-

~'~ a ::, m m = ~; w ,r:  :=a:,'ommer ::'t

=':=:=~5 pud hs M M a ph aner parrhasms You, as an Investor, Should Know What to Do , dent in the corpir ate truct department says M 8W 3N 2 '

N 3"*8888 af claim ' wuh he court u esiaWh Gefw selws as mders and to gwame entin. wm 1 msm W meme" h sm af M 8" m "Ewn thongt unamawty. the he metrumes s:erk a ruuve. "He d rather baum, a panner one the kew Wrt law catme of att devekytnents. bethilders metht (sew out 00L. I causide t

[$fydflg [i [$0TTOttiftf have beinedeters menived " he pD. -we firm of %$1ne, Farr & Gallarher thrh re- Of course, mee>turs who want to aveed afterd a tee or three year hiatum-BV L'** A$8* '""'5W** renity terame imod coimwt ta EPPss.

, .a vi., e . w . e a - ==a **8 3, ,, m.,

IDa Spriman and her husband lumcht [**,'*"*" y g

{M " l Their sant te get in semer rather thaa gater to giorert 4 ear neits" las se of nehmeton Putdk P >=er Suptdy * * ' " " Nothing Generated

$,swm revenue hseds three yests ago. Tw *"b Denste the difficulues evolved WHh le- *

" N5 ,The, trisstee, vdmg whielders' stries ud remedies. . ,9 d4y ine surciy systern a petreing on sfw e tes i t v", ow er s0e ya n , g p, g,n,eit.her g,g by i.tself br ,s,t the di bema of deuult. and the knads are earth a C'***,

wo0Dv scopermafg viElf.sS-" he M m uke W W h PW sg d many lawyers stress that they can er swd as efferteve turgainmg se,ls. No hvwr of mere u ec The Spelmans fear that hv A'**d as emed tme as it wams in the HWS$ rase, for enmple, tan esempt t> = 1. is eager to trave a default ,

January, mPr$$ een t tw aNe en make Ks 12 am veer earmee tS In ne tratre could demand that the supply encored ansf l' s rish befag ebd apr d the Mg g g ga gg pg ga gm surerest p4ynwnts. = aaa5%,taggJ mats sg Ig ;pg.

-TE Df n*L Hout LOAN teaNU- sW5lem tmnd market. titima'ety, res.au' es use-Faced with that gtern prispert. htrs. a**see saarew ceavensionsi **'oege pny.,s. ion turn go ih,,Over afi,rtedall limds pneer currefitly pearts. No affy 15 sts are warhed out? hir. Spetta says.

Strimaa says me dewse t know shether she 4 and No. S. pl'as acy encome the two rais- "

sNmkt sue try to ortsnue a bedikers **'*eaa****"** Ifnedimiders' rights and reme@es get celed plants Imght have gaterated. These vrmre hazy of a timmdrei defaurs turns mio g,,

13% V** **'ter: 17 28% g,,, ,,g, 8 I group or lust sat tight. "I m married that se are g ung to inoe our mrmev." she says.

Aa* *

  1. ] *" , g fun <ts =ould first be used to pay empenses of a snakrupery these e memripality can't te g,,,,%,,,,,,,,,,, ,I ' -*9e d the trustee and the twMhoMers' committee. furred mte bauruptry, at rat voluntanly me Frasekhse Pist, a mee , .
  • ' ' * ~ ~

cuplamme that se one seems to kano what an,m uowey uanntI or Posers- then la cover det,ts fnr the too p eer plants. w sech the prDiertem of Chapter 9 of the U.S.

Dus,enes,s,h,e,sids g

m do. and finally to pay prifertpal and interes; , , , , seed,,ses,e, jg Rame ene oms each sunemen tiel- g,,,, , ,,

One teams fnr her confuMon is that line ou as 52 5n0 As since the No e and 5 planta never Bankruptry rate sa that et can reorga**.re us debt. The rules here are set by a f9eral es,,, c,.,,,,,gw, ,,,,, >

mg the sue uf the pnienttal %PP55 defattN has ever happened tes we. Maartpat bats 8'e*o.e s

.as heah. e es meser e-w awier oneines a toen esse-eenen, were bwlt. there usa t any revene twing bankruptrv Nige, who may or may not 101-pratured And the limited fundt tidl en the 3rme prov** s ed the tund resgunna ,,sd,susle,,s,.

n,, a,cessipe.se i . - g0 - ..

j de d -

have twen camsidrred Ihe safest pastbac sa eW bank me a sufferient to cover mtercsr and

,,,,,,,,,,,,,an ' -

vestment. Detaults are fro. bankruptries pnnripal p ynwnts after July a

  • 'wlien you get inte bankriaptcy, a tsa't a ce.e., cay eng,,,,,,,

g even fewer As a result, investors rarcty can te smed m the event of a default and

  • 4

/ p,'

omee Irgal remedies are avadable *rwh tynere ., mea, e ,,s, se i ,

have h4hered to owry strue enat they ** " P'Y

  • the trusice and the ladiutdal bM? ii.er y.,T , ,

y e de museess b**d 4 slumed do d their munscipal tuods stopped p4vmg sterest ors sheaM'Sc chn me pde repneus

- risuld sin frir unpaid prmripal and stered.

Imt even if they men m court, they maghi .? Jr i i j' h Y4 M

E1 )l c' L i leut with HTPSS prohlems folinemg a soon of any arthm they fmght take, smre mit gat any fnunty ' g ,[ " vongs,'f," I few short years after New Yatt Pity's finan. S8'"'if the remedies avaslable to tumdl>44- The ave, according to ktr. $pmtto Pey rec migc A,id mai. w uys. m

'.m, ai g[ .

m , .

Il . ,

ll q.t' 5 (sal wonen efhts,io fivre iheprWie ng. are,startmg

~ em,*s md to pay= <= =~ a 64d =aaan- aced

'ra'km "I b d"I't, hw eiample. may de let eta (fly that hartened when a court or liRSONNR PROBLEMS Ale oNer11ocatiofiprobletris: caman. m .

.e ame b a sw aue to bnalers of truutded taxetetriM tie he lamdlwilders of the te nd tssuer hacei dared a levee datnr1 in innsiana to rats, 'i ' y' 'y/A'

< g,,,g the numey to pay st Itast the a&titional p w tues a reer tennel pwmenn T'w M W

  • PMM = brriover 7 '

These nghts and remedes donI rum, su e nutbl bm me assuer mte taankniWy. the nem detrict resigned en masse. leaver  ;

{ ,' U. -

'*- mio pay unitd there is a dehult. ecsay sne maung a nm set W pn# dens.

earssed by a f4ilure to pay aterest or prinrg the district withnut anyone authorired to reCfuitrfierit .W ]' .,

'C

T,1" raise tases. And senre the court emside t Senaltarccanpaime'*frn 9ptw esen pal The terms ad these rigtits are set frwth Secktng Sol
8lans brre those varanries to be filled. it had no m the issue s thiami resnlutina, and they rary way of nforrms its order. ORO Wm fremi .sne twed issue to Llw meat And shde it may take emly onefourth of Ilot Ge tumd tmer rni the only psten gen,,g,gg,,,3 . "a I'

A Possible Sperdup all hathiWrs to acrHerate tfie de.tg. It canna i=rgi * ~~ w+r a s = =

  • une -e mai war u.

on y,c,.1,,,s, ,emed,es s,.,,,, ,,, . --e aa ar sc = =vi. ii ese e der wress case ia e>> 's airead> a r-a e ma- 'aried >--*"a'.">m-a v in me c-.m. w m

&mMm.

. ~ ~ ~ ~ ~

  • Maa -

a se rolage fra io em me agr-at of r. of *aag a*r*ntas wt attet agi-

- n.,m.. f., comge.

,. ame.s.,%

y

,t

,,a.,cr.ed,,,m n----ee m ~ ~~~~'*~+*m~~ -

. .ed a i.md .I a. we. , ** hn i aa' ~r -

t,,esi and ,nnn,.i houns or,,,s .ue ,,n.ned, srehmg a resolutaan of the protlem. nnt a 39.y }migment. Mr. Spiotto says. not'r g ihat his-But etDerts are ' quart to punt cui thd 1 pally smal lHA&rs of trwNed tNeds sm b arthms actual'y may Ge httle to hcIP "nisah haw ben W. N paynnts ,

.svestrws get their Enohey. That's tierause may have came late. and their interest viay i - ,

usttalty have spr. ,

tan etemM lumd asse mi ietet one .ners t,revots mer, hav + nr~ -d.hao . w u n m a

  • 8~.**'

S fruen setoftg petaperty, since such a ,arure k*lIlood d thf I""51A""I' e1perts seem agree to that the in .

b f .,

mit t'l fitsrupt operaterms of a Rtunanp.ehty ve%Ior 3 first step after a default 5 to E*t In' g5 N'C Li a resud. Inve%tMs may gut a jelgment m

,y * / . ,

firmarme her Spmeto rcrommends that yne '. d court, but d the usuer d.irsa t hve the , , ,

a e meldteV. khtasinrs Wim I ("t p shi lN4R f'w'"iarl II I"ed Insster-tyrkally aherit ran P*t to make sure that the at. ..i

'You casI sempty aftsh a pJere car er bant . .

Ishuer hves up to its agreements a hydincierffbr lF)tity or any other asset the methK'pality might have. ' eisp! alas hfWs h Speutto, a sterial

~43g the trustee what the status 5 and 3

W ],lfy '

rmen ainge u. that uys. a,rtyms R l,acemts to take, Mr Spie.lte lc en,,n,..as conoam, 4 q

w,di o a,,,anm. c.on istm,.,,n,s.,, til Irmmrtpal a,,;,,,

nr a,ene, sue me t.as du3 a,

.,, .ma ,,, une

. o ,, hat m,,,m4,,unt.,,cy i,,,, ,,a ,he m L h rh., 6- n,ie a.pm.,g.,s.,.he,her

.t m t ~ h. .cd det..de

,,,,,a,,e-mv-fn) th#a.ittatl g.t rai .

P.mers as the mungrop.shty ser ,g G w.e mmf e.

a ..

h?g E. E

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GoingDown WPPSS heads toward defatdt W ith ington itsPublic hard-luck Power Supply history, System the Wash-(WPPSS) has richly tem's earned the unhappynickname of Who three of the five unitsin the state sys massive nuclear-power project has cither ,

been postponed or cancSed, a: d a fourth unit is endangered. Last week things got even worse. The Washington State Su- I prcme Court uncxpectedly d ruled thatnearly 30 pelic utilitie pay their share of the $2.25 i ion billion owe WPPSS for building costs. The dec s '

pushed the system a step closer to the ulti-mate whoop faultin history.

Donald Mazur managing " devas- director of WPPSS. called the courtkhich tating/* lic said he still expected on decision wor the last fully active power project, wis 97% completed, to ,,: fin i needed. - ,

tcmber.

and the But money $149 million more is nowherein s '

sight.

The local utilities had agreed to help ,

finance construction of nuelcar, plants 4and 5 under co hy to pay for the reactors whether d or not t e produced electricity. When work stoppe more than a year ago because of escalating costs and an inability to get more finane.

inc. the utilitics refused to pay and de-clared the agreements invalid. The state supreme court went along. It ruled that the utilities did not have t risk the authority to enterinto the accor they were putting their ratepayers a d

for the construction costs.

WPPSS is now $8.3 billion in debt an has ington noState visiblejudgesource temporarily ofincome. saved itA Wash-from default on May 31, when it failed to make a $15.6 million ling. monthly interestpayment, by i tion. But after Washington lastSenator State week'sAl h court Williams ru conceded: " Default is now pretty  ?' muc assured, and bankruptcy is more likely Barely enough money is being f held in a reserve account to pay interest charges o593.7 millio that,the cash will be gone.A d rket failure by WPPSS would severcly rat-tlethe5400billionmunicipal-bon ma I

by drivingdown prices Pacific and raising borrow-ing costs f would be particularly rough on the Northwest.Says Tim Kerr. deputy treasur-er of Washington State:"We will see some very highinterest rates,"

It would seem that only the Federal Government can save WPPsS rd a now, but there has been little Chrysler-style bailout.

mosement towa Congressman

/

George V Hansen Ilut of Idaho has intro-duced a bill toI Ir the bonds and pay oft bondholders. ider-i the billis not giveni aeek.chanec of consation until WPPSS I that could happea as early as m th s w ,

l Ilansen may not havelongto 51 wait.

,-, 7

m Gourt Rukig .

WPPSS Veiging on Default

% 7 e' d Ob WPPSS, From D12 system failed to make a payment T .

little chance for congressional assist.

into a bond reserve fund. Such a no-

'% e ance unless it becomes a national tice would have given the supply problem.

30 Ul The suit to force payment by the system 90 days to make the pay-ment, after which default could have hhington utilities was brought

( ,

, By Les Blumenthal

^***'"""

been declared and the supply system more than a year ago by Chemical headed for bankruptcy or receiver-

. . SENITLE, June 15-The Wash- Bank of New York, the trustee for ship.

mgton Public Power Supply System lxmds sold to finar.ce construction of WPPSS's only assets are its three w'as left without a means of pa in the two abandoned plants.

reni ining nudear pown plant of off the $23 billion debt for two ter

, **ical Bank has not yet seen which one is nearing completion, an-muuted nudear p,wer plants today the decision but is surprised and dis- gg and the largest default in the history - mayed at the rep,rted results, said lon as five years and construction of the mumtig.d bond market , Brian McGirl, a bank spokesman. has been halted on a third.

8eged all ta but assured. McGirl said the bank would ask m two abandoned plants, one at "

7 b2 d ,te Supreme Court, in a the state Supreme Court to recon- Satsop, west of Olympia, and the court ru$i a ower sider its decision and planned to other at the llanford nuclear reser-utility district l$el! t puhhc amend its suit in the lown court to vMion, were terminated more than a i t i' ties in Washingt n sta e year ago after WPPSS was unable to eihl- assert "fr ud and contract claims for imrrow money to continue construc-the express nor implied legal autho- the full amount of the bond' tion and questions were raised about ruiy to enter into ag1 cements to pay ag inst members of the supply sys-tur the plants being built b# tem and supply system directors, the whether the power from the plants f WPPSS.

. . would be needed. '

l utilities and their commissioners. WPPSS has already borrowed i

. The Washington public utilities, whic nr.d certaip attorneys.

pubhh were among 88 Northwest $25 billion, which, when interest is c utdit,esi that sponsored the A suies of 13 suits also has been added, leaves the region's ratepayers tyo punts, together are responsih!e filed by bondholders that allege vi-with a $7 billion debt over 30 years.

{r, m than two thirds r%e %nd olation of frderal securities laws and As ratepayers realind they would that the ability of WPPSS to com-have to pay tur two " dry holes." they Jourts in Idaho and Ore on p!ete and tinance the plants was rtil that utilities in those state $' , Nisrepresented."

no in revolt and the utilities in not '4 obliged to pay their sE.re of the turn looked for a way of avoidmg Ix Chenucal B.o1 had planned to payment.

t on the plants. Those cases 1ssue WPPSS a " noti- of d fault" are on appe :. Sverint corrnpondent Laura Par-

. A default is "very ch>se," said -dier this month after the supply her also contnbuted to vu. repe

%,hington Gov. John Spellman. '

  • I ,

' uecmon sent ripples threwh-

' ot the municipal Imnd marFet' which ended the day mixed after an mitial slump.

A. But hands for WPPSS projects

o. I, 2 and 3 fell about 4 nd bonds for projects No. points' 4 uad a-the termmited plants-fell more than la, comts.

? The movement of a point is equiv-ant to a $10 change in the price of a bond with a $1,000 face value.

f "This is a devastating decision' ,

8. aid Don Mazur, new managing ldi.

ro t. r of WPPSS, which was build- ,

mg the plants for the utilities and had cor sold

~truction.

the bonds to finance their All that is standing between the supply system and default now is a ptate court restraining ordar prevent-

!ng bondholders from forcing the inue.

i

-1 see no regional solution at this time without some A.deral interven-tion,' Spellman said. But Rep. Al Swift tD Wash.) predicted there was -

See Y,'.*TSS, D11, Col. 3

i,v a,s it, /O S 7~ b - } 7 ~ L A Chemical Will Press For WPPSS Default By Nancy L. Ross With the lower court stay re.

w.emo.m ea swr wnw

,ioved, Cl+mical can proceed with l Chemical Bank intends to press the default pnicess it will notify

[ ahead with plans to declare Wash-WPPSS that S15.0 million in int in;; ton Public Power Supply System est payments is due in 90 days.er- In

( in default, Vice President John J. t!.c ::kely event that WPPSS cannot l Fleming said yesteiday. pay, Chemical has the right to accel-l As a first step, the bank, which is erate the notes, making the entire tru3 tee for $2.25 billion in bimds $2.25 billion due immediately.

sold to finance the now. abandoned The bank would then have to go WPPSS fourth and fifth nuclear to court to try to collect whatever it power plants, will so<m ask a' lower can for the bondholders. It does not court judge to remove his hlay 27 have the legal right to force WPPSS stav against default. The stay was in:.o bankruntry, but the supply sys-du. red pending a decision by the tem could ... row itself on the protec-Washington dupreme Court. _

tion of the court under Chapter 9 of The high court ruks! Wednesday the imhruptcy laws.

that public utilities did not have to - -We are considering bankrupcty, , .

pay for their share of projects num- default and other options," Don .

bers 4 and 5 because the' utilities did h!azur, WPPSS managing director, not have the legal authority to enter said yestJrday.,-l don't think there is l into agreement.s to pay for the plants a solution other than federal help."

built by WPPSS. In a separate ac. Chemical plans to make interest tion, the bank will a3k the court to payments .lulv i to Imndholders reconsider its verdict and will amend with funds WPPSS lus on reserve.

Its suit in lower court to allege llowever, that is expected to be the

" fraud and contract claims for the last payment. If Chemical wins its full amount"against the utilitics and suit aganist the utilities, it may be

~

the lawyers dvi3ing them. ~

. See h PPSS, F2, Col. I Bank to Seek WPPSS Deiault

\ PPSS,From F1 WPPSS would go down in history as able to acquire some of their liquid the largest municipal bond default i

< assets in pay off bondholders. Ilut ever.

  • l legal action of this type could take Though $8.4 billion is only a small considerable time. fraction of the total Imnd market, a hieanwhile, a small portion of the default of this magnitude would have

. Londs, $76.4 million, is insured by severe repercussions, according to American hlunicipal Bond Assur- llowan! Sit 7er, vice president for mu.

ance Corp. Ilowever, that company, nicipal bond research at Thomson a subsidiary of the ailing Baldwin-hicKinnon. lie c3timates that Imnd United, has not yet set aside any issuers might have to offer wary I uy-reserves for repayment ers an additional half percentage The total amount outstanding for point of interest, a move that could all WPPSS bonds is $8.4 billion. drive up the costs of public financing Should there be more defaults, by hundreds of millions of dollars.

rnate. The first plant is not scheduled for a Whoops Woes completion untd i984, seven years iater than expected. Making the situation even Spm-Off A 52.25 billion defaultlooms worse. energy demand hat been falling for Tittie tofortti a riew corripany several years, so not all the plants are he US nuclear power industry has needed. By last year, building had halted =yime Inc. is best known as a commu-Tsuffered many setbacks, one of the on Plants 4 and 5.which were financed by a nications company that publishes worst being the accident at Three Mile Is- the bonds. Since then work has been magazines and books and owns !! cme land. But none is potentially more costly slowed on two other plants as well. and Box Office, the largest U.S. pay cable-l than the financial tragedy unfolding in the project's construction fund is nearly television service. Since the early '50s.

Washington State. Next week the Wash- exhausted. the company has also been in the forest-1 ington Public Power Supply System is ex- Utilities in the Pacifie Northwest. products business. It entered the field al-I peeted to fail to make a $15.6 million which agreed to use power from Plants 4- mest by accident, purchasing half it-j monthly debt-serviec payment to Chemi- and 5 and were supposed to help finance lion acres of prime East Texas timts.'and cal Bank on bonds worth $2.25 billion. the project, are now pushing it toward de-as part of a long-term drive to find sceure

)

The sceuritics were issued starting in 1976 fault. They signed contracts. known as paper supplies for its magazines. The for- I to pay for two nuclear power plants that take-or-pay agreements. that obligated est-products unit grew into a major pro-i hase already been scrapped. A default them to pay for the reactors whether ducer of pulp and paperboard, although it likely endanger completion of or not they generate any electricity. never manufactured paper for the publi-l'three would other unfmished WPPSS plants on Now the utilities claim. among other cations. In 1973 Time Inc. acquired Tem-l which 56.1 billion is owed. Moreover, the things, that the contracts are unenforce- ple Industries, a large Texas producer of I uncertainty that it would ercate could able and that they were misled by official building products, and in 1978 it added

{ shake the very foundations of the munici- projections about future energy shortages. Inland Container Corp., an Indianapolis-i Most of the utilities have stopped pay- based manufacturer of containers and l pal bond for big and market and lead small insestors alike.to hugements Says losses to WPPSS and by the end of June, containerboard.

i Now Time Inc. is leaving forest prod-

! uets. Last week, at the company's annual shareholders meeting. President J. Rich-i _ ard plunro announced a plan to form a separate company by splitting off the il m. Sa.s .%Q , , ,

_e, f p' . y. r g- 's . .u forest-products operations from the firm s

w ey 4- p t w, other businesses. If stockholders a p-

' %3hyff dp 'Y.I_ k[y: prove the plan, which would give them I

y s Np-p a --

.jk*f.

  • ab .N p ,gg ., " @f,
p. - shares m the new forest-produets com-pany, at a special meeting later this l $@ ',,,3 ( ,, ; -y, 4 'g,a'- * - *@ -u year, the move could be completed by M i; year's end.
[= .- q8, kt

" " 7.:.-

C * .4 . -

.c n The spin-off should make it easier

[4 924 l2G y @ ,

  • t'~ - . 4 for caeS company to satisfy its own con-

.-R9[ -..

~

siderable capita! needs. Said Munro: "At j dWgg, .. . .

l , _ ,

y g.:.

j s

,< g/* [~ w q" the moment, we inevitably have a con-j 'i '9 A .gjep -.

. x tinuing lug-of-war between widely difTer-

.; " ent needs that have to be evaluated from

.g hMMN'5

- %7 4.' .e i . ._

m 49 distinctly different perspectises."

Time Inc. has made seseral major

  • "',. 4 . :

f -~. ,

W.. J investments la communications during

!? m.

  • w i! s
  1. @ ~ I the past few years. In addition to its mag-

, iwo of ..y completed nuclear power urats at the tro. Jed WPP'.d instalk alines, books and 1100. Time Inc. owns

, ifthe debt-service payment is not made. it - .z.. . come the %est municip., ankruptcy American Television & Communications Corp.. ene of the largest aU.S. cable-TV P ' crt Ad'er. a Shearson/ American Ex- 88 utilities will owe it %2.4 m21icn. companies.1100 last year joined with ph . vice preddent: "Small, medium and wPrWs woes have made consumers CBS and Columbia Pictures to form a

large investors will all be hurt-all the in Wasnmgton State furious. Since bills new movie studio. fri-Star Pictures. Last

, way aeross the country." for the nuclear plants started coming due, month the company launched its eighth

! On Wall S;rcet, the WPPss (nick- the average red.'ential electric rates have magazine. TV-CABl.E WEEK, which will nanw Whoops) situation is being com- gone up about 80% Some irate ratepayers provide system-specific listings for both i pared to the near default by New York urged that WPPss file for bankruptey so cable and broadcast TV. Time loc. is also i Ci'y in 1975. Investment bankers are hs p- that its debt payments can be eased. experimenting with a teletext service for

, ing for the best, but some expect the Congressman George V. !!ansen of cable television. Time's teletext will be

worst. Says David Jones, an ceonomist Idaho has been preparing legislation for a the official information service for the l with the brokerage tirm of Aubrey G. feueral bailout of Whoops. The Federal heads of gosernment at this week's eco-Lanston: "This situation is another Reserve is watchina the situation, but nei- nomic summit in Williamsburg Va.

l; Mount St. IIelens waiting to happen." ther the Reagan Administration nor The forest-products firm, which will i wrPss's troubles are the result of more C ::gress seems inclined to consider a res- have its headquarters in Diboll. Texas.

! than a decade of misjudgments. In the cue operation. will be a major U.S. corperation on its early 1970s. when it appeared that the de- If wrPss does not make its debt-scr- own. Last year that part of Time Inc. ac-

' mand for electricity wou d outrun supply, viec payment on May 31. it will have 90 counted for $1.1 billion, or 32c'c of the j WPPSs started construction on three nu- days to find the money. If it cannot come company's 53 6 billion in revenues. if it i e! car plants and later added two mere. up with funds, then Chemical 13ank, as had been an independent company, the

! The agency. though, was unable tv supe bond fund trustee, or the lenders will tv forest-products operation would have l with such enormous projects, and dead- ab!c to declare the bonds immediately ranked 270 on the Ibn1UNE 500 hst. .8 i hnes began slipping and expenses bal. due. Such an action would doom (Fe en- Munro said in announcing the proposal l looning. By 1932 the total cost of the de- tire project and push WPPss into receiver- that separation means that the "maior j velopment had leaped to $23.8 billion, ship, making it the biggest municipal parts of Time Inc. can become greater more than fisc timca the original esti- bankruptcy in U.S. history. m than the whole." a TIMI MAY30.1983 71

= .. .

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m-:-c

- - m-Tr e... cWG3TE-W355 L _UpMllBattle

, WPPSS'PlanforLoan Faces As Bonneville, Banks Question Proposal

, mira.n w But Bonneville 'Tm is notconcerned prepared to sayabout some as-e,.w m s m o am, pects of the plan. B nnevute deputy SEATTLE Washmgton Public Powerwe would accept it." says o Supply System faces as uphall batue to arrange the g360 stulhon credit line it has admmistrator trymg Robert E. Ratch!!e.when WPPSS nssues bonds, th decided to seet trorn major commercial for repayment over are as Piany s receivmg fromas 40 gangs, years, but WPPSS envisionbanks a three-year credit finir that can be WPPSS wants to secure the credit converted withto abye-year notes for a maatmum promise of repayment byofmercial theeightfeder:Jyears. "WeBormeville understand that com-banks d41 normally consider any- l Power Adimnistration, but Donnewtu has imsgivings about such a guarantee la addnion. commercial banks appear less thing longer than about eight years" says '

than enthusiasuc about WPPSS' proposed laus H. Wannard, chairman of WINS' ea- ,

ecuttre board's audit, legal and finance 4

a.nweg.

WPPSS. construcuos a.m of Washington h committm AI But that would mean that Bonnevde, tw continueN. {y. on its No. 3 nuclear Ioa

  • I '

' state's puttic uttlaty districts. needs t emoney toeigftt t the end of  % worii w

power project. ahKh is about W. complete. $%0 mr.1 ton face amount ald have *"" to collect such Normally. WPPSS finances its construction. years. Bonneytt'e wou l s revenue, so "that prr:Jects by issulag revenue bonds, but unfrorn its gwr-sa ecauses us sorne concern." says Mr. Rat-

'j certalnues raised by lawstuts on twor othe funds j/).

.! chffe. "Witaty uncomfortable.11 that could do toyou ourcan't rates .

projects have made it impossible makes us veto issuemore bonds for. project *{f No. 3. As a result, WPPSS has decided to seek money from roll over or refinance that, as a consequence [

commercial banks. Ks too cosuy?But Mr. Ratcliffe says Bonneville isn't ConvertlMe Credit Une rejectmg the proposal until %?PSS has had WPPSS wants guarantees from Bonn* a cha:ce to present it to banks. Details

dh '

ville because SonnevdeI has won'tcontracted be workedtomarket out until v. WPPSSof the an power from try t ebanks thetoplant.

negot BonnevWe previously g.iaranteed,,ve that gotbonds to have Imore detalls/* he says.

issued for the plant would be repald from "We're eager to find out t! there are some power-sales revenue. The remainmg 30". of d The maior tne plant's electricity would go tothrust fourofin-] sources that can be tappe .g the interest this exercise is seein vestor-owned ut!!Ltles, which hold a 30". in'I terest in De prolect and are financing their of some of the major banks."WPPSS d plans to send letters b a ha snart separately.

Evestually WPPSShopes to rehnanceof the major banks today, asking 6f they woulbe interested La bank bo".rewing with a bond issue, but that Perko. WTPSS chief financial ofheer and can't be ensureo. So to make thetreasurer. loan at- He sand WPPSS hasn't crantacted banks about the proposal. But Mr. Ratch!fe tractive. %?PSS wants backsg from Bonne-vHie. @e big federal marketer of electricity. n says 'Tve been t9M there O ve been some AO

, contacts and the banks are suniciently later-FAX-31 th '

emenweds a swp a ested to ta:k."

REfD EUMB;%MI3  % Bankers' Reactions a Sma9er m r e.ua aw-m .%,

But bankers apparently haven't es- TO t NN.es 7NN ewa sa Ihm c wsa pressed any enthustasm abnut FAX-31 the cr proposal.-f woujda t r e.ma.s.ie.4.

e,wm[ -.e ump.,.se itiem money." said the utmties spraalist atG-l f acsir

e. .

y;gra " * ** ** a maw Madeest bank. "I Girk they're g. feaCh ai Fw waseestseems tasisove ses su rs7e ing to have a real mard time of it."

The bankers fear that the Washmgton Thf

=

scwownto a associaits. ac. uttiary esn't offer sufficient collateral to pro- .

automat nsec,e In.m[ thy $ b ms "They need to come up with security for the tect len<ters if %?PSS were unable to repay.

j' manY at credit une in the event of bankrugey." said  ;

i' etenas l one banner. "We certainty 1on t want to be [ at OGCO.

,, 1 osoustmatoitsns

, g stuck with a nuclear power piant." gggjggg

.,,g*g  %.

i '

In San Francisco. Crocker Nadonal 1

.m... Corp., and Wetts Fargo 6 Ca. said they importa . .

maas co==ames en tiavent been approached by WPPSS and g M

M, f E

I . .~.r m * ~r*

    • [*"* [ { wouldn t comment on whether they might ettend credit to WPPM. BankAmericainCOmit A Corp. also wouldn't comment.

WPPSS' executive board voted May 27 to the FA'

'  ; suspend construction on plant No. 3 for autOWOr,e i I { years if it can't obtain additannat funds. It ARbyi

} ordered an imrnediate construction c* slow-, dows bu

, swa commue u a levei an wooid anow a HEMPSTEAD full resumption. Since May 27. WPPSS has naea ne, ie.&CO.

suJ osoas laid ott 1.350 of the project s 13be work . feaSOr i  ?

ss E. t che a.e 1*oei res sore ers.

I%i .s [' 1irZ P

1*

e  ;

W t

. _ _ _ __ _ _ . . 4 .

J

ROUTING AND TRANSMITTAL. SLIP #Yh

, To: (Name. office symbol, room number, Initiats pate

, building, Agency / Post)

1.  % Sc b>su~ , S T.

z /Fk s'a37 3.

4.

! =

Action File Note and Return

{

Approval For Clearance Per Conversation As Requested For Correction Prepare Repfy Circulate For Your information See Me Comment investigate Signature Coordination Justify nrwas .

Q OW&/ G%Au v~~

/ f a d e) c h) & Z d w o m p ejr: m u> 4

-/r5L8 f)c '24LEYM "

  • ifygky & h y ~ DNS/

, j. thw W' q .,ac & y w A ( + d )

l

& ,) m 62 Si w '-* 0 '

DO NOT u'se this form as a RECORD of approvafs, concurrences, disposals, clearances, and similar actions FROM: (Name, org. symbol, Agency / Post) Room Bldg.

&VI 5041-102 Obu fE&'~l ";yry OFTIONAL FORM 41 (Rev. 7-76)

  • GPO : 1981 o - bi-529 (100 I I *II #

. - _ - _ _ _ _ - _ - - _ _ _ . _ _ _ _ _ - _ _ _ - - _ _ _ . _ _ _ - _ - _ _ _ . _ _ _ _

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