OPALCO Heroically Files for Bankruptcy in Response to WPPSS Quagmire

OPALCO was swept up in the Washington Public Power Supply System (WPPSS) debacle, the biggest and most notorious municipal bond default in U.S. history.  OPALCO was one of 88 Northwest utilities pressured into sponsoring the construction of two nuclear plants that were never finished, and then got stuck with some of the $2.25 billion bill. OPALCO’s share of the debt was estimated at $45 million over thirty years, which would have meant a 60% rate increase for members—who would get nothing in return!  OPALCO Board Member Leon Fonnesbeck convened a summit of regional co-op leaders to brainstorm a way forward.  In a bold move at the end of 1982, OPALCO became the first utility to file for Chapter 11 bankruptcy protection to ensure the Co-op’s survival.  Within six months, the Washington State Supreme Court released all 88 utilities from any debt repayment to WPPSS, and OPALCO withdrew its bankruptcy filing.

Leon Fonnesbeck. Photo by Steve Horn.

Seattle Times Letter to the Editor, Jan. 1983