WHOOPS is a nickname for the Washington Public Power Supply System.
Whoops is the largest municipal bond default in history ($2.25B in 1983). It came about because electric utilities projected continued growth in electricity demand and needed additional generating capacity to supply that demand. At the time, nuclear power was preferred for its favorable economics. Numerous companies contracted to build nuclear plants.
A series of problems brought the era to a close--
- So many plants were under construction, that contractors experienced in building nuclear plants were fully committed. Utilities began to use contractors new to nuclear which led to cost overruns. Errors, inexperience, and mismanagment were blamed.
- The Three Mile Island incident resulted in stricter regulation of the industry, design changes and increases in cost and more cost overruns.
- The energy crisis resulted in conservation efforts that flattened demand.
Numerous nuclear plants were left uncompleted. Some were converted to coal fired plants. Utilities were not allowed to include the costs of the debacle in their rate base which resulted in more conservative management and probably in some of the brown outs and blackouts in the following generation of plants.
Washington Public Power planned a large system, and began selling bonds to finance construction, but then cancelled the project prior to completion resulting in major writeoffs.
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