Washington State utilities excused in A-plant loans

The tax-exempt bond market recovered somewhat Thursday after a ruling by the Washington State Supreme Court that some 22 utilities in the state had no authority to participate in two nuclear power plants, in which work has been suspended.

The court's ruling virtually excuses the utilities from paying the principal and interest on $2.25 billion borrowed to build the two reactors, which were to be part of the Washington Public Power Supply System.

The trustee for the bondholders, Chemical Bank, said it would sue nearly everyone involved in the case. The bank added fraud and negligence to its original complaint against WPPSS participants, Monitor correspondent Ron Scherer reports.