The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Friday, December 06, 2002

Plant's suppliers concerned, yet positive

By Matt Sanders msanders@paducahsun.com--270.575.8650

A decision in the late 1990s by Electric Energy Inc. to increase the amount of power sold to outlets other than the Paducah Gaseous Diffusion Plant is softening the impact of USEC’s decision to locate a gas centrifuge test plant in Piketon, Ohio, one of the Joppa, Ill.-based power plant's executives said Wednesday.

Since the deregulation of the energy industry, EEI owners have increased the percentage of power sold to other customers besides the Paducah plant by 10 percent each year, which has provided the energy producer with several retail outlets, Vice President Bill Sheppardcq/ms said.

“After deregulation, it became apparent that the owners should take the power and sell it to a broader customer base, as opposed to building additional power plants,” he said.

Its owners are Kentucky Utilities; Amerencq/ms in St. Louis; and Dynegycq/ms, the parent company of Illinois Power.

The Paducah plant is EEI’s largest wholesale customer, and used 36 percent, or almost 3.3 million of the 8.8 million megawatt hours generated by EEI this year through Oct. 31, Sheppard said. That compares with 4.8 million megawatts the plant used in 1998.

“Our owners have been systematically taking more and more of our electricity and selling it themselves,” Sheppard said. “For our owners, this decision creates no immediate change, but ultimately they have to be able to market power or lose quite a bit of revenue. The immediate economic impact to EEI is not substantial, but there remains concern over the fate of the Paducah plant. That could potentially be a multimillion impact to us. ”

Sheppard said the loss of the test plant and the uncertain future of the Paducah plant also affects employees who live in the Paducah area. EEI employs 264.

“While it was disappointing to hear that decision, I can’t say that I was surprised after reading about the seismic issues in the newspaper,” Sheppard said. “I am a resident of Paducah, and a lot of our employees live in and around there, and we are aware of the economic concerns facing our community.”

The fate of the Paducah plant, one of TVA’s largest industrial direct-serve customers, also concerned Gil Francis, a spokesman for the utility.

“Certainly we are interested in the future of uranium enrichment services, but it is too soon to talk about what effects this announcement will have on TVA,” Francis said. “TVA would have liked to see the new testing facility in Paducah.”

The selection of Piketon, Ohio, as the test site also means that Paducah lost several hundred union jobs to build the facility. While Larry Sanderson, president of Plumbers and Steamfitters Union Local 184, expressed regret, he also sounded upbeat.

“In business, there are always peaks and valleys, but we will survive,” Sanderson said. “There will be other jobs to come along to take the places of ones we could have had.

“I’m sorry (the test facility) went to Piketon, I would have liked to have seen it here, but the loss of a plant, you have no control over it. Hopefully, it won’t mean the loss of the (gaseous diffusion) plant, but that’s somewhere in the future. The whole community will have to get together on that.”

Robert Petter, president of Petter Supply Co., described the Paducah plant as “a major customer” over the last 50 years, and said the potential loss of the Paducah plant would be felt across the community.

“To replace what is there now and the project that was lost will require a multitude of future successes,” Petter said. “The announcement was certainly a disappointment.

“We feel for the employees of USEC, and for local and state officials who worked so hard to support USEC, both in current state and future endeavors. It is a disappointment for those folks.