The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Friday, September 12, 2003

Data needed to complete plant incentives
Gov. Paul Patton and others are trying to level the playing field on money issues to attract USECís gas centrifuge facility to Paducah.

By Bill Bartleman bbartleman@paducahsun.com--270.575.8650
Wilhite and Patton


GILBERTSVILLE, Ky.

Kentucky officials want more economic data from the company for use in preparing an incentive plan to convince USEC Inc. to build a $1.5 billion uranium enrichment plant in Paducah rather than Portsmouth, Ohio.

Gov. Paul Patton said he and others met with USEC officials last week to discuss the state's bid for the gas centrifuge facility that will replace the gaseous diffusion plant built in Paducah more than 50 years ago. USEC hopes to have the new plant in operation by 2010 after which the Paducah plant would be closed.

"Our two biggest obstacles are an existing building in Ohio that can be used for the new process and the seismic requirements of building in Paducah," Patton said in an interview while attending the Kentucky Labor-Management Conference at Gilbertsville. "We asked USEC what it would take to level the playing field ... and they have agreed to give us an appraisal of those issues."

Patton said he left last week's meeting with the understanding that the existing Ohio building is worth about $200 million. "Leveling the playing field on money issues is going to be a tremendous hurdle to overcome," he said.

"However, we feel we have an advantage in three other areas ó the quality of the workforce, the quality of the community and the cooperativeness of state government."

Patton said the effort to attract the new plant is the top priority of his administration, which ends Dec. 8. USEC originally planned to solicit proposals from Kentucky and Ohio early next year, but accelerated the timetable and issued a bid proposal last month.

The tentative deadline to submit incentive packages is Oct. 10. USEC said it could announce the plant site by the end of the year.

Ohio's believed advantage is further bolstered by the fact it was picked as the site for a 50-job demonstration plant. That plant is scheduled to open in 2005. Construction of the commercial plant is to begin in 2006.

J.R. Wilhite, commissioner of the Kentucky Economic Development Cabinet, said he's working hard to prepare the incentive package. Asked if Kentucky can be competitive with Ohio, he said, "We're going to make it competitive enough to win; otherwise, why play the game?"

USEC and Kentucky officials said a confidentiality agreement blocks them from discussing bid package details or what Kentucky is proposing until after the site is selected.

Patton said USEC's long-term electrical Paducah plant contract with the Tennessee Valley Authority will be another key economic factor in the decision. Electrical costs were a major consideration three years ago when USEC decided to close the Portsmouth enrichment plant rather than Paducah's.

TVA agreed to a contract change that saved USEC millions of dollars. Patton said local officials are working with TVA on a new rate structure.

Twenty years ago, the U.S. Department of Energy had planned to switch to the centrifuge technology and built a facility in Ohio. The plant was mothballed after a change of direction.

The seismic concern lies in Paducah's proximity to the New Madrid Fault earthquake zone, which requires tough building requirements.

Patton, who has attended every labor-management conference for 12 years, was the featured speaker at a banquet Wednesday night.

The conference began Monday and ends today.