Financial Community's Perceived Impacts Which Could Result From Default or Successful Legal Challenge by Participants in Washington Public Power Supply System Nuclear Project Nos. 4 and 5

In response to a congressional request, GAO reviewed the impacts and consequences of a default or a successful legal challenge by Pacific Northwest utilities participating in the construction of the Washington Public Power Supply System Nuclear Projects Nos. 4 and 5. GAO examined three scenarios which would relieve participants of their financial responsibilities with respect to the Projects' bonds: (1) one or more utilities voluntarily defaulting on their obligations and throwing that class into default; (2) one or more of the participants being forced into bankruptcy by the debt service obligations and creating a default among the class of participants; and (3) all participants being relieved of their obligations because of a successful court action by ratepayers or utilities challenging their obligation to make payments whether or not the projects are completed.