Related topics

Judge Dismisses Lawsuit Against Federal Power Agency

January 28, 1986

PORTLAND, Ore. (AP) _ A judge has dismissed a lawsuit against the Bonneville Power Administration that alleged the federal agency was negligent and misled buyers of $2.25 billion worth of bonds used to build two nuclear power plants.

U.S. District Judge William Browning’s decision Monday does not affect the defendant status of the Washington Public Power Supply System and Wall Street bond brokers in the $7 billion class-action lawsuit filed in connection with the largest municipal bond default in U.S. history.

In issuing the summary judgment, Browning said the case failed the test of the federal Tort Claims Act, which allows citizens to sue the government.

Chemical Bank of New York, bondholders and utility companies sued the BPA and the WPPSS, alleging BPA had put out erroneous forecasts for electricity needs, and misrepresented the value of the bonds covering construction of the plants.

WPPSS terminated construction on the two plants, No. 4 on the Hanford Nuclear Reservation and No. 5 at Satsop, Wash., in 1982 after selling $2.25 billion in bonds. WPPSS defaulted on the bonds after the Washington Supreme Court nullified agreements made by 88 utilities that participated in construction of the plants.

The lawsuit seeks the $2.25 billion plus interest that would have accrued had there been no default, bringing the amount sought to $7 billion.

″We felt quite confident of the validity of our position,″ said Bob Ratcliffe, deputy administrator of the BPA. ″Judge Browning’s order vindicates the position we’ve been advocating for well over a year.″

Ratcliffe acknowledged his agency had overestimated the amount of energy that would be needed in the Northwest, but he said energy forecasts across the United States were on the high side during the 1970s.

″There were those who said, ‘No, you have plenty of power.’ ... But evidence didn’t support it. All the best evidence that was available to us indicated the need for more energy,″ Ratcliffe said.

″It turned out we were wrong. But who hasn’t been?″

Attempts to reach Chemical Bank officials in New York after work hours were unsuccessful.

Browning issued no opinion on the validity of the claims, but said BPA officials were simply performing their duties and could not be sued, even if they were wrong in performing BPA functions.

On Dec. 13, Browning denied BPA’s motion for a summary judgment.

In his order filed in the Western District of Washington, the judge said, ″I was wrong. On reassessing this matter ... I conclude that the government’s motion must be granted.″

WPPSS planned to build five nuclear power plants. One is operating, and two others, No. 1 at Hanford and No. 3 at Satsop, are being preserved for possible resumption of construction when their power is needed.

Update hourly