Word: seabrook
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Like a giant vessel left ashore by the tide, the Seabrook nuclear power plant sits forlornly on the marshy New Hampshire coastline. The reactor has produced not a single kilowatt of electricity -- nor a penny of income -- since ground was broken for the project in 1976. Result: Seabrook is generating a financial disaster for its principal owner, Public Service of New Hampshire, an otherwise healthy electric utility that has poured $2.1 billion into the plant. Strapped for cash, Public Service last week did something that utilities virtually never do: it defaulted. The company deliberately missed a $37.5 million semiannual interest...
...that have plagued dozens of plants across the country. Even the $2.25 billion default of the Washington Public Power Supply System in 1983 failed to knock out any utilities, largely because WPPSS was a consortium in which the financial burden was shared by 16 companies. But the weight of Seabrook falls hard on Public Service, which owns 35.6% of the plant and is prohibited under New Hampshire law from charging customers for the inoperative plant. The next biggest owner is Connecticut's United Illuminating, with...
...Seabrook project has been troubled from the day its plans were announced in 1972. The plant was originally budgeted at $973 million and scheduled to operate by 1979, but Seabrook's cost has reached $5.5 billion, and the opening has been repeatedly postponed because of construction delays and environmental protests. Seabrook came within a few months of being started up last year, when it suffered another setback: Chernobyl. The meltdown at the Soviet nuclear plant in April 1986 prompted Democratic Governor Michael Dukakis of Massachusetts to block the opening by refusing to participate in an evacuation plan for the area...
That will bring no immediate help for Public Service, which is battling with dissident creditors over rescue plans. A group of bond owners (estimated holdings: $200 million) led by New York City Investor Martin Whitman is proposing to spin off Public Service's share in Seabrook into a separate company, thus leaving the utility less encumbered by debt. Losing Seabrook, however, is anathema to the utility, which still hopes to reap the hefty return that an operating nuclear plant can deliver. Public Service's Harrison proposes to restructure the debt, slash the utility's costs and raise electric rates...
Public Service is floundering financially due to its $2.1 billion investment in Seabrook. The company has asked state regulators for a $71 million emergency rate increase to keep it from bankruptcy reorganization...