the first investor-owned utility since the Great Depression to declare bankruptcy.Seabrook was the last nuclear reactor built in the United States. Until now. In Georgia. Which has CWIP. Maybe we should change that.
Here’s an excerpt from a corporate history of Public Service Company of New Hampshire (PSNH):
By January 1972 PSNH had decided not only to build a nuclear plant at Seabrook but also to have it consist of two 1,150-megawatt units, to be completed in 1979. PSNH was to own 50 percent of the $1.3 billion project and share the remaining investment with other New England utilities. In January 1974 the New Hampshire Site Evaluation Committee, the Public Utilities Commission (PUC) and other regulatory bodies had issued the basic permits, but interveners in the case succeeded in having the New Hampshire Supreme Court overturn these permits. After repeated appeals and rehearings PSNH received its construction permit in July 1976—and experienced its first protest at the planned site.
There followed a decade of other protests at the site, inside regulatory chambers, and in New Hampshire and Washington courtrooms. The 1979 accident at the Three Mile Island nuclear-power plant in Pennsylvania—to name but one event that triggered concern
about ecological and safety issues—played a significant role in these protests. So did delays imposed through public intervention, slow regulatory approvals, and two significant labor strikes. PSNH had to borrow money to meet ever-escalating costs. In 1978 the company had been authorized to charge customers for the carrying costs of loans to build the Seabrook plant. New legislation stated that PSNH could not recover any investment in the Seabrook Station until the plant provided electricity to its customers. Deprived of CWIP costs (Construction Works in Progress, known as stranded costs), PSNH had to borrow even more heavily at a time of high interest rates. The N.P. Public Utilities Commission (NHPUC) ordered PSNH to reduce its ownership in the plant from 50 percent to 35.6 percent. In March 1984 the joint owners canceled Seabrook Unit II and formed New Hampshire Yankee, a separate division of PSNH, to manage the construction of Unit I and bring it into operation.
Seabrook Unit I was completed in July 1986 at a cost of $4.5 billion but did not go into full operation until August 19, 1990, at which time PSNH had not yet recovered any of the construction costs. Seabrook’s final cost was $6.6 billion and PSNH’s share of the debt was $2.9 billion. In May 1986 PSNH asked the NHPUC for a two-step rate increase; however, the agency ruled against the request. In a final effort to remain solvent, PSNH appealed NHPUC’s decision by filing for a 15 percent emergency rate increase and asked the New Hampshire Supreme Court to suspend the Anti-CWIP law.
Late 1980s-90s: Bankruptcy and Restructuring
On January 26, 1988, the court ruled that the Anti-CWIP statute was constitutional and prevented PSNH from receiving the emergency rate increase. Two days later, on January 28, PSNH filed for protection under Chapter 11 of the U.S. Bankruptcy Code and became the first investor-owned utility since the Great Depression to declare bankruptcy.