The Pike County News Watchman
Pike County News Watchman

USEC payment stoppage reported

Tuesday, July 18, 2006

Negotiations are ongoing in a dispute between several county jurisdictions and Portsmouth Gaseous Diffusion Plant operator USEC Inc. regarding the company's continued payment of tax break compensation.

In 2004, Bethesda, Md.-based USEC Inc. received a 100 percent, 15-year tax abatement the largest ever granted in the state of Ohio in return for choosing the Portsmouth plant in Piketon as the location of a $1.5 billion, 500-job commercial uranium enrichment plant using advanced centrifuge technology.

The company is now unwilling to make compensatory payments in lieu of property taxes due to state mandated tax reform established in June 2005 that phases out tangible personal property tax over a period of four years.

"It's not a good situation," said Angie Duduit, USEC Inc. public affairs manager over the American centrifuge project at Piketon. "We're making payments on a tax that has been repealed."

The first payment was made by USEC Inc. in December 2004, totaling more than $1 million. It was distributed via separate agreements to four county jurisdictions, including the Pike County Board of Commissioners, Scioto Township trustees, the Scioto Valley Local School District, and the Vern Riffe Career and Technology Center.

Another payment was made in January at half the owed amount, Duduit said. The latest payment was due July 1, but by then, USEC Inc. and the county jurisdictions had agreed to a 30-day extension, during which time the parties could iron out differences.

The Pike County commissioners are less than pleased with the company's decision to rethink its agreement, which was made possible through the creation of new laws by the Ohio Legislature extending the maximum available abatement from 10 to 15 years.

"We've been making the highest enrichment of uranium known to the world for 50 years, and this is how they treat us," said commissioner Harry Rider. "We should be getting better treatment."

Commissioner James Brushart said Monday that USEC Inc. recently presented an offer for alternate payments. He referred it as "a joke."

"We've been messed over," Brushart said.

Rider said he will not discuss the issue with USEC officials any further unless Kevin Shoemaker, the commissioners' Columbus-based attorney, is present. According to Shoemaker and Duduit, most negotiations so far have been handled over the phone, with few in-person meetings. During those dealings, all parties have been cooperative in the search for alternative payment.

"Everyone is trying to work things through," Shoemaker said. "Obviously, the goal is to not adversely affect USEC and get payments that benefit the jurisdictions."

In the meantime, the county continues to receive payments from the state of Ohio as part of the phasing-out of tangible personal property tax and the transition to commercial activity tax.

The new tax is based on a company's gross receipt as opposed to the amount of property it owns. However, legislation sponsored by Ohio Sen. John Carey and Ohio Rep. David T. Daniels has reduced the adverse effects of the new tax on the affected jurisdictions. Working with representatives from all of the jurisdictions, the Ohio Legislature took action to help.

Shoemaker said new legislation approved by the legislature in March shifts the tax valuation of the Portsmouth plant from the 2004 level to what it was in 2000, allowing Pike County jurisdictions to see more state dollars.

The Portsmouth plant property was more valuable in 2000 because USEC was still operating the facility with gaseous diffusion technology.

If a resolution to the current dilemma is not met by parties at the end of July, the parties will have to decide if negotiations are worth prolonging. But at this point, time is not the most crucial concern, said Shoemaker.

"I don't think anyone's watching the clock," he added.

The issue could go to court if a resolution cannot be reached, but the parties would explore every possible solution before that would happen, Shoemaker said.