The Paducah Sun
The Paducah Sun
Paducah, Kentucky

USEC won´t submit in-lieu-of fees

By Anne Thrower
athrower@paducahsun.com
270.575.8653

Tuesday, March 07, 2006

USEC Inc. has notified McCracken County Judge-Executive Danny Orazine that the company does not have to pay the county in-lieu-of-taxes payments.

When USEC Inc. took over operation of the Paducah Gaseous Diffusion Plant in 1998, company officials made sure in the privatization agreement that the company would not have to pay property taxes or a fee. Orazine said he received a hand-delivered letter from plant manager Steve Penrod on Thursday, reminding the county of the arrangement.

Orazine had hoped the county could come up with some fee arrangement with USEC. In-lieu-of payments — in which arranged fees are paid rather than property taxes — are made in more than 20 communities nationwide that have Department of Energy plants, County Administrator Steve Doolittle said in January.

The plant is located on DOE property. USEC leases the 750-acre plant from DOE and enriches uranium for use in nuclear fuel.

“I am not going to have an adversarial relationship with our largest employer,’ Orazine said. “They have been too good for our community.’ USEC officials could not be reached for comment on Monday.

Orazine said he wants to seek another opinion, possibly through the Energy Communities Alliance, a group of community officials that have nuclear facilities in their areas. County commissioner Zana Renfro and Doolittle will travel to Washington, D.C., later this week to the meet with alliance members. The alliance includes officials from Oak Ridge, Tenn.

McCracken County already has a fee arrangement with TVA for its Shawnee Fossil Plant, which provides electricity to the gaseous diffusion plant.

The county receives about $700,000 annually from TVA, Orazine said, adding he´s never questioned how the agency calculates the fee, at TVA facilities. “We are just glad to get it,’ he said.

Orazine said he was a little optimistic at first about a similar arrangement with USEC. And now, he says, he´s a little disappointed.

Orazine said he´s not sure how much money a fee arrangement would have produced. But he said the money would not have been used for the general operating budget. Instead, the county would have earmarked the money for county parks and possibly the West McCracken Fire Department, the county fire department nearest the plant.

USEC workers provide the county about $1 million annually from payroll taxes. The 1,100 workers provide about 20 percent of the revenue the county receives from payroll taxes.

But that revenue source will start disappearing once the plant starts closing in 2010. Orazine said he believes the company will stay open past 2010.

Meanwhile, Orazine still hopes the county will receive revenue from nickel stored at the plant. The value of the 9,710 tons of nickel stored in blocks ranges from $50 million to $150 million. For the nickel to be recycled, DOE must first lift a five-year, safety-related ban on removing contaminated scrap metal at any of its plants.