Commissioner candidate's claim about huge "Whoops" savings way overstated

Steve Ferrell led the "irate ratepayers" group, but his impact on containing costs for abandoned nuclear projects was negligible

Editor’s note: This story has been corrected to report that Republican candidate for Cowlitz County commissioner Rayleen Aguirre is no longer a member of the conservative 4-C group.

All I can say about this campaign claim is “whoops.”

In his candidate statement in the Cowlitz County primary election voters guide, Steve Ferrell asserts a dubious and exaggerated claim.

“I served as a (Cowlitz) PUD Commissioner from 1983–1988. My involvement helped stop the runaway WPPSS (WHOOPS) projects and saved ratepayers billions of dollars,” according to Ferrell, one of six candidates running for the District 2 Cowlitz County commissioner seat now held by Dennis Weber.

It is a reference to the Washington Public Power Supply System, which caused the nation’s largest-ever municipal bond default over its troubled construction of five nuclear power plants. Only one plant was completed. The effort was plagued by mismanagement, construction delays, cost overruns, falling power demand and other problems.

In fact, despite Ferrell’s claims about savings, the debacle has cost electricity ratepayers in Cowlitz County and across the Northwest billions of dollars. And it will continue costing many millions more.

The plants initially were estimated in the early 1970s to cost about $4.5 billion, but the projection shot up to $23.9 billion by 1981. 

Unable to borrow that much more money, the WPPSS board terminated plants WPPSS 4 and 5 on January 22, 1982. It later defaulted on $2.25 billion in bonds sold to finance them. That put the Cowlitz Cowlitz PUD and 87 other utilities that had backed them on the  hook for paying back those bonds.

Ferrell by that time was a highly vocal critic of the projects.  He  was the chairman of  a statewide citizens group called “The Real Irate Ratepayers.”   He and  other members defeated incumbent PUD commissioners across the state in the fall of 1982. Ferrell often was at odds with Bob McKinney, the late General Manager of the PUD who had been a real advocate for the WPPSS projects.  

“I was outspoken and aggressive and in a lot of the meetings I was the leading voice in the room” advocating for ratepayers, he told me in a phone interview last week.

However,  by that time the fallout from the WPPSS crisis already was well underway. Critics like Ferrell were legion at the time, because the WPPSS crisis was causing power rates to shoot up across the Northwest.

Ferrell’s claims in the voters pamphlet are way overstated because: 

• It is the WPPSS board itself that stopped construction on plants 4 and 5, in addition to mothballing 1 and 3. It terminated projects 4 and 5 nearly a year before Ferrell was elected a PUD commissioner. It had established a construction moratorium on the plants even earlier, on May 29, 1981.

• It was the state Supreme Court that got the PUD and its 87 partners off the hook for the $2.25 billion costs of unfinished plants 4 and 5.  The high court ruled in June 1983 that the utilities had illegally entered the “hell or higher water” contracts, which obligated them to pay whether the plants were completed or not.

• Electric customers across the Northwest have far from escaped the cost of the debacle. They have paid billions to WPPSS bondholders through wholesale power purchases from the Bonneville Power Administration, the federal power marketing agency. BPA guaranteed the WPPSS bonds for plants 1, 2 and 3. Payments for those bonds are included in BPA’s  wholesale rate to customers such as the Cowlitz PUD. The PUD gets about 80 percent of its power from BPA.

  (I’ve asked BPA for precise costs and will include them once —if — I get them. (Check andrestepankowsky@substack.com to see if the story gets updated over the next few days.)

The PUD officials involved in WPPSS decisions are deceased. However, three others with longstanding service in the utility agreed that Ferrell’s claims of substantially easing the WPPSS impact are dramatically overstated.

Ferrell, a Longview Fibre Co. retiree and member of the conservative Republican “Concerned Citizens of Cowlitz County” (4-Cs), is challenged in the Aug. 6 primary by independents Jo Zichterman and Justin Brown, Democrat Amy Norquist, traditional Republican Hal Palmer, and Republican and former 4-C member Rayleen Aguirre.

Only voters in District 2 will vote in this contest in the primary. The top two vote-getters will face off in in the general election, which is countywide.

Incumbent Dennis Weber, a Republican, is not seeking re-election.

Ferrell acknowledged that the voters pamphlet statement probably should have been worded differently. He still remembers how the crisis affected bondholders who lost money.

“A lot people had retirement savings wiped out. My heart went out to them, and my heart still goes out to people who lost all that.”