MANCHESTER, N.H.--Public Service Company of New Hampshire, lead owner of the stalled Seabrook nuclear power plant, yesterday filed for protection from its creditors under Chapter 11 of the federal Bankruptcy Act.
With $2.7 billion in assets, including $2.1 billion sunk into Seabrook, Public Service is the fourth-largest U.S. company ever to file under Chapter 11 and the first major investorowned utility to seek bankruptcy protection since the Depression.
The move came two days after the state Supreme Court denied the company an emergency rate increase by upholding a law against charging ratepayers for power plants in advance of operation. Public Service has a 36 percent stake in Seabrook.
The controversial, $5.2 billion reactor is completed but has been unable to surmount evacuation-planning obstacles to a commercial operating license.
Manchester lawyer Robert Backus, a long-time Seabrook foe, called the filing "recognition that the Seabrook plant is and was an economic disaster. It's the final admission that it was a mistake."
Republican Gov. John Sununu, a long-time Seabrook supporter, called the development regrettable, but expressed hope that means can be found "to protect both the ratepayers of New Hampshire and the state's energy supply."
Some other Seabrook owners, utilities in New England, have said they would pick up Public Service's share of Seabrook costs, but have not made that commitment in writing.
Public Service had been struggling for months to stay out of bankruptcy court. It has defaulted on unsecured bond issues totaling more than $700 million since October and faces lawsuits from three banks representing creditors seeking to take control of the utility's property.
Under Chapter 11, a company obtains a federal court order that frees it from the threat of creditor lawsuits until it can develop a plan to put its finances in order. The court must approve management activities while the reorganization proceeds. A majority of creditors must approve the ultimate reorganization plan.
Public Service skirted bankruptcy in 1984 and had to halt Seabrook construction for three months until the state Supreme Court let it borrow $425 million, the largest utility financing deal in U.S. history.
The utility continued borrowing heavily to finish the reactor and maintain interest payments. But as the reactor's licensing woes mounted, investors last summer refused to lend the company any more money, triggering financial crisis.