The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Sunday, November 25, 2001

USEC needs decision on future

Officials with USEC Inc. and the union that represents about 700 workers at the Paducah Gaseous Diffusion Plant have settled their differences over an 18-month contract, but unfortunately the tentative agreement does not guarantee the future of the plant and its 1,500 jobs.

The plant's future is riding on the outcome of a Bush administration review of the nation's nuclear fuel cycle.

USEC management and workers are in the same boat: they can only wait for the results of the review, which involves top administration officials, including Bush's national security team.

Still, it's encouraging that USEC officials and the leaders of Local 5-550 of Paper, Allied-Industrial, Chemical and Energy Workers International were able to break the contract impasse.

Contract talks last summer bogged down on several issues. A key sticking point was USEC's insistence on tying the terms of the contract to a favorable decision from the Bush administration on allowing the company to continue as the sole agent for Russian uranium recycled from nuclear warheads.

The union agrees the short-term financial viability of the plant depends on USEC's ability to mix Russian uranium with the higher-cost material produced by the outmoded enrichment technology at the Paducah facility. However, union officials didn't want to link the contract to the precarious status of the Russian deal.

Union officials and USEC negotiators reached agreement on the contract not long after USEC dropped the Russian uranium from the contract.

If PACE workers approve the contract Monday, the plant will add to its long record of avoiding strikes and labor disruptions.

Obviously it was important for both labor and management to get contract matters out of the way so that both can focus on the future of the U.S. enrichment industry.

But there's little either side can do without a commitment from the Bush administration to preserve the Paducah plant, the nation's lone remaining processor of nuclear fuel.

Bush was expected to reach a decision on the future of the plant and USEC's Russian uranium deal in September. The terrorist attacks changed the timetable, but the administration needs to declare its position before the end of the year, when USEC's exclusive contract to process Russian uranium from old nuclear warheads and sell it as fuel for nuclear power plants expires.

The administration reportedly is leaning toward retaining USEC as the exclusive agent and not allowing utilities to enter the market in exchange for the company producing a business plan that includes keeping the Paducah plant open for as long as 10 years.

Under this scenario, the company would open a European gas centrifuge facility within five years and develop U.S. centrifuge technology for a plant that would open in 10 years. The speculation is that the European centrifuge would be located in Portsmouth, Ohio, the site of a mothballed gaseous diffusion plant; and the new technology would be located in Paducah.

As a backup plan, the federal government would operate the Paducah plant for 10 years if USEC faltered.

This plan appears to hold the most promise for USEC workers in Paducah and the regional economy, which would be seriously damaged by the loss of the plant's 1,500 jobs.

It also makes sense as a national security measure. If the Paducah plant shuts down, the U.S. nuclear power industry will have to rely totally on foreign enriched uranium.

This is not a reassuring prospect given the current international turmoil and the multiple security threats posed by Islamic terrorists.

Again, we're encouraged by reports the administration apparently is moving in the direction of salvaging the U.S. enrichment industry and allowing financially ailing USEC to shore up its bottom line.

But USEC workers and USEC stockholders, too need concrete assurances that the Paducah plant will continue to operate for at least another decade.