The Paducah Sun
The Paducah Sun
Paducah, Kentucky
Thursday, December 18, 2003

New plant sale secured for USECs rival
Louisiana Energy Services has applied for permission to build a gas centrifuge plant in New Mexico.

By Joe Walker jwalker@paducahsun.com--270.575.8650

USEC Inc. competitor Louisiana Energy Services has taken a major step to build a $1.2 billion gas centrifuge plant and has signed contracts with several nuclear utilities to buy half the plant's first 10 years of production.

LES and USEC are racing to build the first enriched-uranium nuclear fuel plant in the United States since the early 1950s. LES has applied for Nuclear Regulatory Commission approval to build a gas centrifuge plant in New Mexico, the company announced this week. The review is expected to take 18 to 20 months, LES said.

USEC said earlier that it would announce this month whether it has picked Paducah or Piketon, Ohio, for a gas centrifuge plant to replace the outdated Paducah Gaseous Diffusion Plant starting in 2010. USEC spokeswoman Elizabeth Stuckle said Wednesday that word will come soon, but she declined to give a specific date.

"We expect to deploy the most efficient uranium enrichment technology in the world by the end of this decade," she said.

USEC has moved its schedule ahead by a year, saying it intends to apply in August for an NRC license to start building its $1.5 billion, 500-job plant by 2006. It says Piketon has the edge because of already having centrifuge buildings and lacking Paducah's earthquake hazards.

Experts have varying views whether the market can support two new plants, and there are continuing questions about USEC's ability to finance a plant. The company expresses confidence in getting financial backing.

Led by Urenco, a European firm that has used gas centrifuge for decades, LES includes three of the nation's largest nuclear power companies Exelon, Entergy and Duke Energy. Exelon is USEC's biggest customer and the largest nuclear utility in the United States. Fuel fabricator Westinghouse Corp. also is part of the consortium.

Although it did not say which power firms had signed contracts for reactor fuel, the LES press release quoted three utilities supporting its gas centrifuge plant, called the National Enrichment Facility. The firms are Southern Nuclear, Arizona Public Service Co. and Nuclear Management Co.

"Domestic competition can only be good for the industry and, ultimately, the consumer," said Jim Levine, executive vice president of Arizona Public Service.

Although LES has agreed to dispose of its waste outside New Mexico, plans have not been revealed, and state regulators say they will increase permitting scrutiny. The NRC process involves public hearings on environmental concerns. Previously, the LES plant was moved from Tennessee to New Mexico because of public backlash.

A failed national energy bill last month had language from U.S. Sen. Pete Domenici, R-N.M., to greatly accelerate the NRC review and require the Department of Energy to accept LES waste. The provision might have meant that LES waste would have been recycled at a conversion plant to be built in Paducah starting next spring.