Whoops is a negative slang term that was historically used for the former Washington Public Power Supply System (WPPSS). Established in the 1950s to ensure consistent electrical power for the Pacific Northwest, WPPSS faced numerous challenges, earning it the unflattering nickname “Whoops.”
Key Takeaways
- Whoops is a derogatory slang term once used for the Washington Public Power Supply System.
- Today, the Washington Public Power Supply Company is known as Energy Northwest and is no longer associated with the name “Whoops.”
- The 1980s marked a series of expensive setbacks for WPPSS, leading to the largest municipal debt default in history in 1983.
Understanding Whoops
Whoops (WPPSS) embarked on a major project to construct five nuclear power plants during the 1970s and 1980s, issuing billions of dollars in municipal bonds for funding. However, poor project management led to the cancellation of several plants, and the completion of the remaining projects seemed improbable.
The precarious financial situation led the Washington State Supreme Court to annul the take-or-pay agreements underwriting the municipal bonds. Consequently, in 1983, WPPSS declared the largest municipal debt default in history.
Early History of Whoops
Nuclear power gained traction in the 1960s as a clean and inexpensive source of energy. WPPSS ambitiously scheduled five nuclear power plants financed through public bond issuance. Unfortunately, the sales did not meet expectations.
The Packwood Lake Dam, their initial project, lagged by seven months beyond its expected completion date, marking the start of WPPSS’s litany of public works troubles. Construction issues included cost overruns and inefficient project management. Contractors exploited governmental inefficiency, leading to overcharging and under-delivery of services.
This compelled safety inspectors to enforce stricter regulations, legislated mid-construction by the Nuclear Regulatory Commission (NRC). Consequently, significant portions of the project had to be scrapped, redesigned, and rebuilt.
High Costs and Big Trouble
By the early 1980s, only one of the five proposed plants was close to completion. Adding to their woes, public sentiment shifted against nuclear power, deeming it neither as inexpensive nor beneficial as initially claimed.
Some localities even initiated boycotts against nuclear power before the plants became operational. Unresolved cost overruns escalated, requiring over $24 billion for completion. However, the declining power sales couldn’t offset the deficits. Except for the near-complete second plant, construction of all other plants ceased. The first plant needed yet another redesign.
Eventually, WPPSS was compelled to default on $2.25 billion in municipal bonds. Though the second plant became operational in 1984, it was considered too little, too late for many investors. By Christmas Eve 1988, a $753 million settlement was reached. Some of the 75,000 bondholders received only $0.40 for every dollar invested, while others received as little as $0.10.
Special Considerations
In 1999, the WPPSS transitioned to Energy Northwest, rendering the term “Whoops” obsolete.
Related Terms: project management, take-or-pay agreements, municipal bonds, public bond issuance.
References
- U.S. Department of Energy. “Regional Issue ldentification and Assessment (RIIA)”, Pages 66-68.
- State of Washington Energy Facility Site Evaluation Council. “Columbia Generating Station”.
- History Link. “Washington Public Power Supply System (WPPSS)”.
- Bonneville Power Administration. “Energy Northwest, WA”.
