The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Wednesday, May 23, 2001

USEC submits power plant bid

By Joe Walker and By Bill Bartleman

A consortium including the United States Enrichment Corp. has submitted a bid to the Tennessee Valley Authority to build a 600-megawatt, gas-fired facility near the Paducah Gaseous Diffusion Plant to provide electricity in the area.

USEC spokeswoman Elizabeth Stuckle said the group submitted the bid May 14 and is hoping to make the "short list," expected to be announced July 16, from among several other competitors who have not been identified.

The USEC bid is in partnership with Constellation Power Sources, a Baltimore-based power company, and Marubeni Corp., a Japanese firm that trades commodities including electricity.

TVA asked for proposals in January to build a 600-megawatt power plant that would operate all year plus smaller summer peaking capacity plants that would operate in the summer to meet high demands from air conditioning.

TVA wants to have summer peaking capacity of up to 600 megawatts, which would be in addition to the big plant USEC is proposing.

After approving the "short list" in July, TVA will negotiate with those firms until Oct. 15, with plans of signing a contract with the winning bidder by Dec. 14.

TVA did not specify where the plants should be located, only that the successful bidder have the ability to deliver the power to the seven-state TVA system.

A TVA spokesman said late Tuesday he was unable to provide information on firms that submitted bids because the person in charge of the program was out of the office. Stuckle said the bid amount is proprietary.

Another source said a 600-megawatt plant could cost $1 billion or more. Stuckle said if the USEC proposal is approved, construction would begin within two years and provide hundreds of jobs for trades people. The project would be completed in time to begin providing power in 2005.

TVA would not own the plant, but would sign a long-term agreement to buy the power that is produced. The power plant would operate at least 30 years, have an undetermined number of "high-paying" jobs and afford large tax-base increases for the county and state, Stuckle said.

"It would be a major capital project, be productive reuse of existing Department of Energy property and provide major electrical generation capacity to the Paducah area," she said.

The power plant would be built on about 120 acres of DOE land just northeast of the fenced area of the Paducah Gaseous Diffusion Plant, owned by the department and run by USEC.

USEC has asked the Paducah Area Community Reuse Organization, which uses Energy Department funds for economic development, to act as leasing agent for the land, said PACRO Director John Anderson.

"This is in the early stages because there must be a public hearing involved and that has not been announced yet," Anderson said. "The only public group that has been briefed is the (DOE) Site-Specific Advisory Board. Even the PACRO board has not been made aware of this."

He said Charles Martin, a plant USEC official, spoke to the advisory board last Thursday night and wants to meet with PACRO directors in the near future. Arrangements for the lease and other financial details had not been discussed, Anderson said.

The first two years of the project will involve considerable preparatory work, notably acquiring an air permit to run the facility, Stuckle said. "It would have minor environmental impact due to modern design and use of natural gas as a fuel source."

Power would enter the TVA grid and be used locally or to provide added capacity across the system, she said.

If USEC is successful, the plant would represent a true economic development partnership among USEC, the reuse organization and the Greater Paducah Economic Development Council, Stuckle said. GPEDC President Stuart Gilbert was unavailable Tuesday afternoon.

The bid also reflects an effort by financially troubled USEC, which produces enriched uranium for nuclear fuel, to broaden its revenue base. USEC is doing environmental cleanup work at the plant and has bid on a Department of Energy project to convert thousands of uranium hexafluoride waste cylinders into safer material.

"The bottom line is we're looking at a variety of initiatives to diversify the company," Stuckle said.

This project is in addition to a summer peaking capacity plant that will be built in Marshall County by Duke Energy Co.

At least one other company, EnviroPower of Lexington, is looking at sites in Marshall and McCracken counties to build a coal-fired power plant that would cost up to $2 billion. The company wants to connect to the TVA grid to transfer the power to suppliers on the East Coast.