BANKING & FINANCE - Feb. 26, 1992

WPPSS Bondholders Lose Appeal: A ruling that could have provided $1 billion to bondholders of two abandoned nuclear power plants in Washington state was overturned by a federal appeals court in San Francisco. A federal judge had ruled in October, 1990, that the Washington Public Power Supply System had improperly charged the two terminated plants, Nos. 4 and 5, with some of the costs of two other WPPSS nuclear plants, Nos. 1 and 3. The termination of plants 4 and 5 in 1982, because of rising costs and a lack of demand for power, resulted in the largest municipal bond default in the nation’s history, $2.25 billion. Attempts by the bondholders to recoup some of their losses have been tied up in lawsuits.