What better way to set a project up for an epic fail than give it an acronym that is pronounced “Whoops”? Last week during my trip with my parents I had the opportunity to visit the now defunct Washington State Public Power Supply System (WPPSS) plant number 5.
A few days before our trip I learned about this place and I wanted to check it out myself. Words cannot describe how eerie a feeling you get when you’re driving down the highway outside of Satsop when all of a sudden there are two massive owers peering out of the woods.
As it turns out, these nuclear cooling towers were never even finished in a public works project run amuck. Way back in the 1950’s, well meaning officials believed that building nuclear power plants would be the answer to our growing need for power and they believed that without doing so we’d eventually run out of resources and not have enough to go around.
Nuclear power was believed to provide clean (ahem) and cheap power. Instead, the events and human faults of this project produced the largest municipal bond default in United States history.
During the construction several factors combined to kill the construction schedules and drive up costs to around four times the original estimates. Design changes happened regularly and builders often got ahead of designers who would then have to modify their drawings to conform to what had already been built. The entire project was very poorly managed. The management had little or no experience with a project this size, or a nuclear projects at all for that matter. In a well-publicized example, a pipe hanger was built and rebuilt 17 times.
In January 1982, the WPPSS board stopped construction on the plant when total cost for the 5 total plants they were building was projected to exceed $24 billion. Because these plants generated no power and brought in no money, the system was forced to default on $2.25 billion in bonds. This meant that the member utilities, and ultimately the rate payers, were obligated to pay back the borrowed money. In some small towns where unemployment due to the recession was already high, this amounted to more than $12,000 per customer. The bond holders sued and the matter wound it way through courts for the next 13 years. On December 24, 1988, the parties in the various lawsuits reached a settlement of $753 million. Some of the 30,000 bond holders would receive 40 cents on every dollar invested and others got as little as 10 cents. Because a court found that some of the bond monies for Plants 4 and 5 were spent on Plants 1 and 3, participants in those projects were held liable for the default. Seattle’s share was $50 million, of which $43.2 million came from insurance companies. The last settlement was reached in 1995.
The Satsop WPPSS plant now appears to be privately owned and is being converted into a very unusual industrial park.
Read all the details at HistoryLink.org.