The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Friday, January 11, 2002

Uranium sales tax may get repealed

By Bill Bartleman bbartleman@paducahsun.com--270.575.8650

FRANKFORT, Ky.--Kentucky lawmakers are considering a bill to exempt the sale of enriched uranium produced at the Paducah Gaseous Diffusion Plant from the state's 6 percent sales tax.

The measure will be debated as USEC Inc., which operates the plant, considers a $13 million project to accelerate its plan to move its shipping operations from the closed enrichment plant in Piketon, Ohio, to Paducah.

At present, uranium enriched in Paducah is shipped to Piketon where it is prepared for final sale and shipment for companies that use it to fuel nuclear power plants. Ohio exempts the sales from its tax. If the operation is moved to Paducah, the sales would be subject to Kentucky tax laws.

While the tax exemption is not the key to making the decision, USEC spokeswoman Elizabeth Stuckle said it would be taken into consideration. She did not know how much the exemption would save its customers.

"We have been studying for some time several cost-saving possibilities for the company, and one of those has been the economic and logistical advantages of accelerating the move of transportation and shipping to Paducah," she said, noting the original timetable was to make the change in 2004 or 2005.

She said the study will be completed in several weeks. Such a move would potentially save the company millions by eliminating about 400 jobs in Piketon and significantly reducing transportations costs.

Upgrading the Paducah plant would cost about $13 million and could be completed early next year.

State lawmakers representing McCracken County were briefed on the need for the tax exemption on Thursday by John Cooper, a Frankfort and Washington, D.C., lobbyist; Paducah Mayor Bill Paxton, McCracken Judge-Executive Danny Orazine and Ken Wheeler, head of an informal committee that is promoting economic development opportunities related to the Paducah Gaseous Diffusion Plant.

In 2000, USEC closed the Piketon enrichment plant as part of a cost-cutting initiative. However, it continued operating its shipment facility at Piketon because Paducah was not equipped to perform that task.

Stuckle said moving the operation to Paducah would create only a small number of jobs. Those currently working to ship material to Piketon would be transferred to the new shipment facility.

Stuckle said USEC wants to have the ability to ship from Paducah, even if the shipments continue from Piketon for a few years.

USEC officials will meet next week with the Nuclear Regulatory Commission to begin discussing the procedure for upgrading the Paducah plant to ship the finished material to its customers.

The potential of accelerating the transfer operation to Paducah has drawn protest from U.S. Rep. Ted Strickland, who represents Piketon in Congress. He has asked President Bush to block USEC from eliminating the 400 jobs.