The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Saturday, August 11, 2001

USEC's recycling bid adds to dispute
The company is in a consortium that was added as a finalist to recycle hazardous waste. The late entry causes speculation.

By Joe Walker jwalker@paducahsun.com--270.575.8650

Controversy swirling around U.S. Enrichment Corp. contract talks and Russian uranium has spread to the company's bid to recycle about 14 billion pounds of hazardous waste at the Paducah Gaseous Diffusion Plant.

On Monday, the Department of Energy announced that a consortium including USEC was one of three finalists for cleaning up about 57,000 cylinders of depleted uranium hexafluoride (UF6) at Paducah and closed enrichment plants in Ohio and Tennessee. DOE, which owns the USEC-run Paducah plant, expects to name a winner in late October.

American Conversion Services, composed of USEC and cleanup firm CH2M Hill, made the short list despite not being initially recommended by an Energy Department board that reviewed five bids, according to the Friday edition of The Energy Daily, a nuclear industry trade publication.

"Sources suggest various political factors involving USEC may be responsible for its late addition to the list of finalists," the article said. "One rumor is that DOE wants to give USEC some other work to compensate for a possible Bush administration decision to name another executive agent to serve with USEC in implementing a U.S.-Russian nonproliferation agreement calling for U.S. purchases of high-enriched uranium derived from Russian nuclear warheads."

Contract talks with the Paducah plant's main labor union broke off Wednesday after USEC refused to withdraw the Russian uranium issue from bargaining.

USEC wants a proposed new five-year contract to expire after a year if the company fails to meet any of three goals regarding the Russian material. In voting last week, the union soundly defeated the offer, and has since accused USEC of using labor tactics to try to force a Bush administration decision.

In response to The Energy Daily story, USEC spokeswoman Elizabeth Stuckle said the company was fairly picked as a finalist for the cylinder work.

"DOE has very detailed and established processes for selection of finalists," she said. "We are confident that they adhered to these policies. We are working very diligently preparing for our upcoming oral discussions with DOE."

Energy Department spokesman Walter Perry said the board recommended three finalists, including the USEC consortium, whose names were published on a DOE Web site Monday. The selections, based on "competitive range," were approved by James Owendoff, DOE's principal deputy assistant secretary for environmental management, he said.

Stuckle said each finalist will meet separately with Energy Department officials during the next few weeks. After that, bidders can amend their proposals before a winner is picked, Stuckle said.

USEC, which has battled financial trouble since it was privatized in 1998, wants to remain sole agent for the $8 billion in Russian uranium to control its flow into the United States and hold down overall costs. The company says blending the cheaper Russian material with the higher-cost uranium enriched by the Paducah plant helps preserve jobs.

However, some industry analysts say having a second agent would spur competition and benefit consumers by lowering the prices charged to U.S. nuclear power plants that use enriched uranium. The Bush administration is considering that and other issues in its review.

The winning bidder for the cleanup work will build facilities at Paducah and its closed sister plant in Ohio to convert spent UF6 into a safer material.

Construction is scheduled to start by Jan. 31, 2004. Some past estimates have shown each plant would employ 100 to 200 people, depending on the level of government involvement.