The Paducah Sun
The
Paducah, Kentucky
Wednesday, June 26, 2002

Paducah plant prospects clouded
Earthquakes and environmental issues cast doubt over Paducah's ability to land a enrichment plant to compete with the one planned by USEC.

By Joe Walker jwalker@paducahsun.com--270.575.8650

Paducah's chances of landing a new uranium enrichment plant to compete with the one being planned by USEC Inc. are clouded by concerns over earthquakes, environmental problems and USEC's control of property on which the plant might be built.

A decision by USEC competitor Louisiana Energy Services on where to locate the plant has again been delayed as the consortium continues to review potential sites. LES, which met again Tuesday with Nuclear Regulatory Commission officials, had hoped to decide this week but now is unsure when it will name the winner.

"Obviously, things haven't moved as quickly as we had hoped," said Peter Lenny, chief executive officer of European enrichment firm Urenco's United States subsidiary.

He declined to say when a decision would be made but restated plans to file an application by December with the NRC to build a gas centrifuge plant that would be in commercial operation by 2008, about two years earlier than USEC's. The enrichment corporation, which also has a December application target, plans to build a gas centrifuge plant either in Paducah or Piketon, Ohio.

Last week, Rod Krich vice president of licensing for consortium member Exelon, a large nuclear power firm and one of USEC's largest customers described Paducah as a serious contender among eight to 12 sites nationwide. Although some news accounts have said the field is down to three, Lenny would not say Tuesday whether the list has been shortened or whether Paducah is still on it.

"We just prefer not to say anything until we're ready to say something in a very positive way," Lenny said.

According to NRC records, LES told the commission March 19 that it would build the plant on an existing nuclear site and that the selection would "address low seismic hazard, no previous contamination, moderate climate and redundant high quality electrical supplies." While Kentucky's climate is moderate and it has some of the lowest power costs in the nation, the Paducah plant is heavily contaminated and sits over the New Madrid Fault.

Lenny and Krich would not say this week whether those issues hurt or helped Paducah's standing, although Krich said the eight to 12 sites were picked before seismic concerns were addressed. The threat of an earthquake is a serious consideration for any site because it increases the design and construction costs of a centrifuge facility, they said.

"Seismic is an important criterion, because when you have a centrifuge spinning and it suddenly starts shaking around, that would be a problem," Krich said.

The 40-foot-tall devices use centrifugal force to produce nuclear fuel material by separating the useful and non-useful isotopes of uranium hexafluoride, or UF. They use about a third of the electricity of outdated gaseous diffusion, which does the work via miles of pressurized piping.

Last week, USEC signed an agreement with its landlord, the Department of Energy, to have a commercial centrifuge plant running at Piketon by 2009 or Paducah by 2010. The agreement gives USEC first rights to non-leased DOE land at Piketon or Paducah for use in developing centrifuge.

Lenny said he is aware of the wording but declined to say whether it has affected site selection. "All I can say is, LES continues to be confident that we can deploy the technology."

USEC spokeswoman Elizabeth Stuckle said the wording is essentially the same as in 1996 federal legislation that privatized USEC and in its lease agreements with the Energy Department.

"That means if a third party, say a shoe plant, wished to lease space on the DOE reservation, DOE would first offer the space to USEC to lease before leasing it to the third party," she said.

Stuckle said USEC is not opposed to a third-party lease that doesn't interfere with its business operations. She would not address how that might apply to the consortium's efforts.

LES is trying to add competition to the domestic enrichment market to keep USEC from controlling prices. Members of a local nuclear energy task force have expressed hope that Exelon and financially troubled USEC will eventually join in building a centrifuge plant. Otherwise, if LES picks a site other than Paducah and USEC eventually opts for Piketon which has a mothballed centrifuge building Paducah will lose on both counts, they say.

"That's too iffy to go into at this time," USEC Communications Vice President Charles Yulish said. "That (LES) project has always been iffy, and we're moving ahead."