Beautifully engraved Hanford Project Electric Revenue Bond from the Washington Public Power Supply System - WPPSS
dated May 16, 1963. This is a cancelled $5,000 bond that was due on September 1, 1996. This historic document was printed by the Security Columbian Banknote Company and has an ornate border around it with a vignette of an allegorical woman holding an tablet and a man holding a globe next to books on a table. This item has the printed signatures of the Company’s President and is hand signed by the company's Secretary. This is a hard to find bond.
In the 1950s, the Legislature authorized formation of joint operating agencies that allowed
cities and public utility districts to join together to develop electricity generation projects.
In 1957, 17 public utilities formed the Washington Public Power Supply System. The
first project was the Packwood Lake Hydroelectric Project.
During the 1970s, the joint operating agency began construction of three nuclear
facilities, one of which is the Columbia Generating Station at Hanford, the only operating
nuclear power plant generating electricity in the state. A joint operating agency is
authorized to issue tax exempt revenue bonds to finance its projects. In the case of the
first three nuclear power plants, revenue from the Bonneville Power Administration
(BPA) was used to guarantee repayment of the revenue bonds through a system of
net-billing. An IRS ruling in 1972 changed the tax exempt status of federal agencies and
further net-billing agreements were prohibited.
In January 1982, the WPPSS board stopped construction on Plants 4 and 5 when total cost for all the plants 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. Plants 1 and 3 were never finished either, but their costs were backed by the Bonneville Power Administration and the power it generated from the Columbia River Dams.
Plant 2 at Hanford was completed in 1984 and is now called the Columbia Generating Station. It produces 12 percent of the power supplied by the Bonneville Power Administration at a cost of 2.3 cents per kilowatt hour. Seattle customers pay an average of 3.89 cents per kilowatt hour. The unfinished plants were mothballed against the possibility that construction would be resumed. In 1995, WPPSS decided to demolish what remained of the structures.