[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


                                                          S.Hrg. 109-60


 
            A REVIEW OF DOE PADUCAH SITE OPERATIONS


                            HEARING

                          BEFORE THE

         SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                            OF THE 

                  COMMITTEE ON ENERGY AND 
                           COMMERCE
                    HOUSE OF REPRESENTATIVES


                   ONE HUNDRED NINTH CONGRESS

                         SECOND SESSION
                          ___________

                        JANUARY 19, 2006
                          ___________

                       Serial No. 109-60
                          ___________

   Printed for the use of the Committee on Energy and Commerce









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              COMMITTEE ON ENERGY AND COMMERCE

                 JOE BARTON, Texas, Chairman

RALPH M. HALL, Texas                      JOHN D. DINGELL, Michigan          
MICHAEL BILIRAKIS, Florida                  Ranking Member
Vice Chairman                           HENRY A. WAXMAN, California
FRED UPTON, Michigan                      EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida                    RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio                     EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia                      FRANK PALLONE, JR., New Jersey
ED WHITFIELD, Kentucky                    SHERROD BROWN, Ohio
CHARLIE NORWOOD, Georgia                  BART GORDON, Tennessee
BARBARA CUBIN, Wyoming                    BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois                    ANNA G. ESHOO, California
HEATHER WILSON, New Mexico                BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona                  ELIOT L. ENGEL, New York
CHARLES W. "CHIP" PICKERING,  Mississippi ALBERT R. WYNN, Maryland
Vice Chairman                           GENE GREEN, Texas
VITO FOSSELLA, New York                   TED STRICKLAND, Ohio
STEVE BUYER, Indiana                      DIANA DEGETTE, Colorado
GEORGE RADANOVICH, California             LOIS CAPPS, California
CHARLES F. BASS, New Hampshire            MIKE DOYLE, Pennsylvania
JOSEPH R. PITTS, Pennsylvania             TOM ALLEN, Maine
MARY BONO, California                     JIM DAVIS, Florida
GREG WALDEN, Oregon                       JAN SCHAKOWSKY, Illinois
LEE TERRY, Nebraska                       HILDA L. SOLIS, California
MIKE FERGUSON, New Jersey                 CHARLES A. GONZALEZ, Texas
MIKE ROGERS, Michigan                     JAY INSLEE, Washington
C.L. "BUTCH" OTTER, Idaho                 TAMMY BALDWIN, Wisconsin
SUE MYRICK, North Carolina                MIKE ROSS, Arkansas                
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee
GRESHAM BARRETT, South Carolina              BUD ALBRIGHT, Staff Director
             DAVID CAVICKE, General Counsel
 REID P. F. STUNTZ, Minority Staff Director and Chief Counsel

                        ___________

         SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
                 ED WHITFIELD, Kentucky, Chairman

CLIFF STEARNS, Florida                    BART STUPAK, Michigan
CHARLES W. "CHIP" PICKERING,  Mississippi   Ranking Member
CHARLES F. BASS, New Hampshire            DIANA DEGETTE, Colorado
GREG WALDEN, Oregon                       JAN SCHAKOWSKY, Illinois
MIKE FERGUSON, New Jersey                 JAY INSLEE, Washington
MICHAEL C. BURGESS, Texas                 TAMMY BALDWIN, Wisconsin
MARSHA BLACKBURN, Tennessee               HENRY A. WAXMAN, California
JOE BARTON, Texas                         JOHN D. DINGELL, Michigan
(EX OFFICIO)                              (EX OFFICIO)
                          CONTENTS
                          ________ 
                                                                  
                                                                     Page
Testimony of:
     Rispoli, James, Assistant Secretary of Environmental 
        Management, U.S. Department of Energy ....................... 11     
        Paxton, William F., Mayor, Paducah, Kentucky ................ 29
     Orazine, Daniel, County Judge Executive, McCracken County, 
        Kentucky .................................................... 34
     Hughes, Michael, President, Bechtel Jacobs, LLC ................ 40
     Ervin, Rob, President, United Steel Workers Local 5-550 ........ 47
Additional material submitted for the record:     
     Ervin, Rob, President, United Steel Workers Local 5-550:
        Letter dated February 16, 2006, to Hon. Ed Whitfield, 
            enclosing response for the record ....................... 65
     Hughes, Michael, President, Bechtel Jacobs, LLC:
        Letter dated February 21, 2006, to Hon. Ed Whitfield, 
            enclosing response for the record ....................... 66
     Rispoli, James, Assistant Secretary of Environmental 
        Management, U.S. Department of Energy:
          Letter dated March 20, 2006, to Hon. Ed Whitfield, enclosing 
            response for the record ................................. 68
     Rispoli, James, Assistant Secretary of Environmental 
        Management, U.S. Department of Energy:
          Letter dated March 2, 2006, to Hon. Ed Whitfield, enclosing 
            clarification for the record ............................ 78
     Sigal, Jill A., Assistant Secretary, Congressional and 
        Intergovernmental Affairs, U.S. Department of Energy:
          Letter dated March 16 2006, to Hon. Ed Whitfield, enclosing 
            inserts for the record on behalf of James Rispoli ....... 80 
 
                 A REVIEW OF DOE PADUCAH SITE 
                         OPERATIONS
                          ________

                  THURSDAY, JANUARY 19, 2006

                   HOUSE OF REPRESENTATIVES,
              COMMITTEE ON ENERGY AND COMMERCE,
         SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS,
                                                Paducah, KY.


The subcommittee met, pursuant to notice, at 10:00 a.m., at the Paducah 
City Hall, 300 South 5th Street, Paducah, Kentucky, Hon. Ed Whitfield 
[chairman] presiding.
Members Present:  Representatives Whitfield and Stupak.
Staff Present:  Mark Paoletta, Chief Counsel for Oversight and 
Investigations; Dwight Cates, Professional Staff Member; Jonathan 
Pettibon, Legislative Clerk; and Edith Holleman, Minority Counsel. 

  MR. WHITFIELD.  If I could have everyoneï¿½s attention, please.  I 
certainly want to thank all of you for being here this morning.  As 
you know, this is the Subcommittee on Oversight and Investigations 
for the full Committee on Energy and Commerce, and today weï¿½re going 
to have a hearing on simply reviewing DOEï¿½s Paducah site operations.
Before we start, I certainly want to welcome Holly Healy, who is a 
district aide for Congressman John Shimkus of Illinois, who serves 
on the Energy and Commerce Committee.
   And T.C. Freeman is here representing Senator Jim Bunning.  We 
appreciate your being here, T.C.
   I will tell you this is the first field hearing that the Subcommittee 
on Oversight and Investigation of the House Energy and Commerce Committee 
has convened since I was chosen Chairman, and I cannot think of a better 
forum than here in Paducah to review DOEï¿½s Paducah site operations.
I certainly want to welcome the Ranking Member on the Subcommittee, 
Mr. Bart Stupak of Michigan, for whom it was not easy to get to 
Paducah, because he was caught on the tarmac in Detroit for a number 
of hours yesterday.  But I really appreciate the extra effort that 
he made to get here, and Iï¿½ve enjoyed serving with him on this 
Subcommittee.
   And, of course, I want to welcome all of our distinguished witnesses 
and guests, and I will introduce the witnesses in just a moment.  But 
weï¿½re here today to focus on several issues relating to the operation 
of the Paducah Gaseous Diffusion Plant, a plant that has been 
operational for over 50 years and which today is the sole remaining 
domestic provider of enriched uranium which fuels our nationï¿½s 103 
nuclear power plants.
   Since my election to Congress over 11 years ago, I really cannot 
recall a time when my staff and I were not involved in some way 
on an issue relating to the plant and/or its workforce.  As a matter 
of fact, one of my very first legislative endeavors was the enactment 
of two amendments in the USEC Privatization Bill to protect workersï¿½ 
pension, health benefits, and collective bargaining rights during 
the transition from USEC, the quasi government entity, to USEC, the 
private corporation.
   Since that time, weï¿½ve enacted legislation to restore the arming and 
arrest authority of the security guard force.  Weï¿½ve examined foreign 
competition and the impact of the Russian HEU Deal on our on domestic 
uranium industry.  And as a result of DOEï¿½s acknowledgement that 
workers on the plant were unknowingly exposed through the years to 
dangerous levels of radiation and other toxic substances, weï¿½ve 
enacted two separate entitlement compensation programs to provide 
financial assistance and health care benefits to workers who became 
ill as a result of their exposure to radiation, beryllium, silica, 
and other toxic chemicals.  And to date, I might mention that 2,599 
workers here in the Paducah area from the Paducah plant have received 
compensation for health care in an amount totaling $277 million plus 
their medical benefits.
   Weï¿½ve also enacted legislation to require the construction of two 
depleted uranium hexafluoride conversion facilities, one at Portsmouth 
and one in Paducah, to safely convert the contaminated material in 
over 37,000 cylinders.  And this, of course, will create a lot of 
new jobs.
   We secured the seed money for the former Paducah Area Community 
Reuse Organization to build, design, and construct an eight-county 
industrial park complex.  And despite USECï¿½s decision to build their 
next generation centrifuge plant at Portsmouth, weï¿½re happy to say 
that the Paducah plant is still in operation, and we hope that it 
will continue to be so for some time.
   Of course, every year during the appropriation process we are 
challenged to continue the money to continue the cleanup of this 
plant.  And together we are preparing for the ultimate closure of 
the plant and the economic impact that closure will have on 
McCracken County and the surrounding communities, and we want to 
be prepared for that if and when that time does come.
   But today weï¿½re focused on four basic issues.  First, I would like 
to discuss matters relating to the Departmentï¿½s interpretation of 
Section 633 of the Energy Policy Act of 2005.  I helped draft this 
provision last year along with Representative Ted Strickland of 
Ohio.  We intended to protect and secure the pension and health 
care benefits for employees at the Portsmouth and the Paducah sites 
when DOE changes its contractors at those facilities or when hourly 
employees transfer from employment at USEC to employment with a DOE 
contractor.
   Last week, the Department of Energy provided us with a lengthy 
interpretation of this provision -- and I would say we do not agree 
with it.  I look forward to working out these differences with the 
Department, and we will seek further clarification through additional 
legislation if necessary.  I would also say that there is a 
possibility there may be a lawsuit on this issue.
   Second, we will examine the status of the transition to a new 
environmental remediation contractor at the Paducah site.  Environmental 
remediation work at Paducah will continue to grow over the next 
several years as the Department focuses more attention on environmental 
cleanup, facility decontamination and decommissioning, and waste 
management.
   Last year, the Department awarded the Paducah environmental 
remediation contract to North Wind Paducah Cleanup Company, but 
later retracted the award and reopened the bidding process in response 
to several protests that had been filed.  Finally, on December 27th 
of last year, the Department awarded this contract to Paducah 
Remediation Services.
   Third, we want to explore opportunities to sell the approximately 
9,700 tons of nickel at the Paducah site.  The inventories of nickel 
are significant, and it is a valuable commodity.  Although the nickel 
is slightly contaminated with uranium, it would be a mistake in my 
view to simply treat this valuable asset as a waste to be shipped 
to a disposal facility.
   Iï¿½m encouraged that the Department has included a requirement in 
the new environmental remediation contract to develop and evaluate 
alternate uses of the nickel ingots and acquire competitive bids for 
its reuse.  It is my understanding that the contractor is required 
to present its evaluation of the options to reuse the nickel to DOE 
by July 30th, 2006.
   I hope there is no significant delay in this effort, and I suggest 
that a portion of the net proceeds be allowed to go to the local 
community as it focuses on reindustrialization as a result of the 
anticipated closure of this plant.
   And, finally, I want a full update today on DOEï¿½s efforts to 
investigate possible phosgene contamination in uranium hexafluoride 
cylinders at the site.  Last year, the DOE Inspector General issued 
a memo regarding the status of potential phosgene contamination 
inside cylinders of uranium hexafluoride stored at Paducah, Portsmouth, 
and East Tennessee Technology Park.
   A concern was raised regarding several canisters that were 
acquired from the Army Chemical Warfare Service that were formerly 
used to store phosgene, a chemical warfare agent.  DOE moved quickly 
to assess the 2,541 cylinders in question, and almost all of these 
canisters, itï¿½s my understanding, have been cleared of phosgene 
contamination based on documentation showing they were washed or 
evacuated before DOE obtained them.
   At the Paducah site -- and I want to verify this -- all canisters 
have been cleared of phosgene contamination except for 14.  That 
is my understanding.  DOE does not believe these last few canisters 
have any phosgene, but they may have been unable to locate documents 
to prove it.
   DOE has a plan to sample these last remaining cylinders within 
the next several weeks, and I must say that I have been impressed 
with the Departmentï¿½s quick response to this issue.  And in this 
instance, I think DOE has clearly prioritized the health and safety 
of the Paducah community.
   Iï¿½m specifically pleased that DOE Assistant Secretary for 
Environmental Management, James Rispoli, is here today to provide 
testimony on these and other issues, and I certainly look forward to 
hearing from him.  On the second panel, we have several distinguished 
witnesses that are each interested in Paducah issues, as all of us 
here are.
   So I thank each of you for joining us today.  I hope this will be 
a productive hearing that will provide some important answers for us. 
   [The prepared statement of Mr. Whitfield follows:]

   PREPARED STATEMENT OF THE HON. ED WHITFIELD, CHAIRMAN, SUBCOMMITTEE 
          ON OVERSIGHT AND INVESTIGATIONS

   This is the first field hearing the Subcommittee on Oversight and 
Investigations of the House Energy and Commerce Committee has convened 
since I was chosen Chairman, and I will admit that I may have used my 
own prerogative as Chairman to hold the first field hearing in my District! 
   I want to welcome the ranking member on the Subcommittee, Mr. Bart 
Stupak of Michigan, to the 1st District of Kentucky and I want to welcome 
our distinguished witnesses and guests.
   We are here today to focus on several key issues relating to the 
operation of the Paducah Gaseous Diffusion Plant-a Plant that has been 
operational for over fifty years and which today is the sole remaining 
domestic provider of enriched uranium which fuels our nationï¿½s 103 
nuclear power plants.
   Since my election to Congress over 11 years ago, I can hardly recall 
a moment when my staff and I were not working on some issue directly 
related to the Plant and/or its workforce.  As a matter of fact, one of 
my first legislative endeavors was the enactment of two amendments in 
the USEC privatization bill to protect workersï¿½ pensions, health 
benefits, and collective bargaining rights during the transition from 
USEC the quasi-governmental entity to USEC, the private corporation.
   Many of you here today have worked side by side with me on a myriad 
of issues affecting the Plant and the surrounding community.  
   Together, we have lived through privatization.
   Together, we have enacted legislation to restore the arming and 
arrest authority of the security guard force.
   Together, we have fought foreign competition and the impact of the 
Russian HEU deal on our own domestic uranium enrichment industry.
   Together, we have lived through the revelation and DOEï¿½s acknowledgment 
that workers at the plant were unknowingly exposed to dangerous levels 
of radiation and other toxic substances.
   Together, we have enacted two separate entitlement compensation 
programs to provide financial assistance and health care benefits to 
workers who became ill as a result of their exposure to radiation, 
beryllium, silica or other toxic chemicals.  To date, 2,599 workers 
from the Paducah Plant have received compensation totaling $277 million, 
plus medical benefits.
   Together, we have enacted legislation to require the construction 
of two depleted uranium hexaflouride conversion facilities-one in 
Portsmouth and one in Paducah-to safely convert the contaminated material 
in our 37,000 cylinders, while creating new jobs.
   Together, we secured the seed money for the former Paducah Area 
Community Reuse Organization to build, design and construct an 8-county 
industrial park complex.
   Together, we have survived USECï¿½s decision to build their next 
generation centrifuge plant in Portsmouth, rather than Paducah.
   Together, we fight the good fight during the annual appropriations 
process for more clean-up money, funds to finance the conversion project, 
and funds to continue the state-of-the art medical monitoring program 
we have in place at Paducah today.
   And together, we are preparing for the ultimate closure of the Plant 
and the economic impact that closure will have on McCracken County and 
the surrounding communities.
   The issues surrounding the Plant are as complex and far-reaching 
today, as they were the first time I ever toured the facility.  Today, 
we are focused on four such issues.
   First, I would like to discuss matters relating to the Departmentï¿½s 
interpretation of Section 633 of the Energy Policy Act of 2005.  I helped 
draft this provision last year along with Representative Ted Strickland.  
We intended to protect and secure the pension and health care benefits 
for employees at the Portsmouth and Paducah sites when DOE changes its 
contractors at these facilities, or when hourly employees transfer from 
employment at USEC to employment with a DOE contractor.  Last week the 
Department provided us with a lengthy interpretation of this provision 
that we do not agree with.  I look forward to ironing out our differences 
with the Department on this matter, and I may seek further clarification 
through additional legislation, if necessary.
   Second, I would like to discuss the status of the transition to a new 
environmental remediation contractor at the Paducah site.  Environmental 
remediation work at Paducah will continue to grow over the next several 
years as the Department focuses more attention on environmental cleanup, 
facility decontamination and decommissioning, and waste management.  Last 
year, the Department awarded the Paducah environmental remediation 
contract to North Wind Paducah Cleanup Company, but later retracted that 
award and re-opened the bidding process in response to several protests 
filed by losing bidders.  Finally, on December 27th of last year, the 
Department awarded this contract to Paducah Remediation Services.  I am 
pleased that the Department is moving forward on environmental cleanup 
work, but I want to make sure the transition from Bechtel Jacobs to 
Paducah Remediation Services runs smoothly.
   Third, I would like to discuss opportunities to finally sell the 
approximately 9,700 tons of nickel at the Paducah site.  This has been 
an issue of great interest to me for several years.  The inventories 
of nickel are significant, and it is a valuable commodity.  Although 
the nickel is slightly contaminated with uranium, it would be a mistake 
to simply treat this valuable asset as a waste to be shipped to a 
disposal facility.  I am encouraged that the Department has included a 
requirement in the new environmental remediation contract to "develop 
and evaluate alternate uses of the Nickel ingots and acquire competitive 
bids for its reuse."  It is my understanding that the contractor is 
required to present its evaluation of the options to reuse the nickel 
to DOE by July 30, 2006.  I hope there is no significant delay in this 
effort, and I suggest that a portion of the net proceeds from any sale 
should be returned to the Paducah and McCracken County communities for 
enhanced cleanup efforts and to promote economic development and create 
new jobs to mitigate the impact of the anticipated closure of the gaseous 
diffusion plant.  Also, I call on the Department to make whatever changes 
may be necessary to the moratorium on metals recycling established by 
former Secretary Richardson.
   Lastly, I want a full update on DOEï¿½s efforts to investigate possible 
phosgene contamination in uranium hexafluoride cylinders at the site.  
Last year, the DOE Inspector General issued a memo regarding the status 
of potential phosgene contamination inside cylinders of uranium 
hexafluoride (UF6) stored at Paducah, Portsmouth, and the East Tennessee 
Technology Park.  A concern was raised regarding several canisters that 
were acquired from the Army Chemical Warfare Service that were formally 
used to store Phosgene, a chemical warfare agent.  DOE moved quickly to 
assess the 2,541 cylinders in question, and almost all of these canisters 
have been cleared of phosgene contamination based on documentation 
showing they were washed or evacuated before DOE obtained them.  At the 
Paducah site, all canisters have been cleared of phosgene contamination 
except for 14 canisters.  DOE does not believe these last few canisters 
have any phosgene, but they have been unable to locate documents to 
prove it.  DOE has a plan to sample these last remaining cylinders within 
the next several weeks.  I am impressed with the Departmentï¿½s quick 
response to this issue.  In this instance, I think DOE has clearly 
prioritized the health and safety of the Paducah community.
   I am pleased that DOE Assistant Secretary for Environmental Management 
James Rispoli is here today to provide testimony on these and other 
issues, and I look forward to hearing from him.  On the second panel 
we have several distinguished witnesses that are each as interested 
in Paducah issues as I am.  I thank each of you for joining us today, 
and I look forward to your input.

   MR. WHITFIELD.  And, Mr. Stupak, Iï¿½ll recognize you.
   MR. STUPAK.  Thank you, Mr. Chairman.
   The Energy and Commerce Committee and this subcommittee has a long 
history of holding hearings concerning the problems of workers and the 
communities that have for so many years been the home of Americaï¿½s 
nuclear weapons production facilities.  Many of them were located in 
small isolated communities, and as these facilities are being shut 
down, difficult problems of environmental cleanup and redevelopment 
must be addressed.
   I know that you, Mr. Chairman, Mr. Shimkus from Illinois and our 
colleague Mr. Strickland from Ohio have been particularly successful 
in dealing with some of these issues for your constituents.  I applaud 
your leadership on this issue.
   I look forward to hearing todayï¿½s witnesses.  I am, as Iï¿½m sure you 
are, very interested in learning why the Department of Energy wants to 
take the pension and medical benefits away from a handful of former 
USEC workers who might go to work for the new cleanup contractor despite 
legislation we passed in the Energy Committee.
   In the Energy Bill that was passed this last summer -- and I was 
a conferee on that committee -- I thought Congress made it very clear 
that these workers, their pension and medical benefits shall and must 
be preserved.
   I also want to hear more from the Department about its plans for 
selling tons of uranium-contaminated nickel stored here in Paducah.  
Members of this committee were very active in stopping the previous 
plan to do so, to sell this nickel, at Oak Ridge because the Department 
could not enforce its promise to restrict the future of this nickel 
once it was sold.
   As a result, the Department issued a memorandum -- excuse me.  The 
Department issued a moratorium, which is still in effect, on recycling.  
Iï¿½m very curious to see if todayï¿½s plan is just recycling the same old 
proposal or if there is actually a new one.
   Mr. Whitfield, I appreciate your hospitality.  When I landed here 
yesterday in Nashville, there was snow.  It made me feel at home.  And 
I really appreciate the sunshine today. So Iï¿½ll be back.
   But, seriously, I appreciate the opportunity to be in your community 
and to meet your community leaders and the workers who have given so 
much of their life to our great country.  I stand with you in support 
of these workers and hopefully in the future redevelopment of Paducah.  
So I look forward to hearing our witnesses today.
   And thank you again, Mr. Chairman.
   MR. WHITFIELD.  Well, thank you, Bart.  And I might add we took 
him to Pattiï¿½s last night, so he enjoyed that.
   You know, when you watch the national news media today, you do get 
the impression that in Washington everything is totally partisan, but 
as you know, Bart Stupak is a Democrat from Michigan.  I think that 
our subcommittee has been particularly effective at trying to remain 
bipartisan.  We donï¿½t agree on everything, obviously, but we do focus 
on the issues and respectfully disagree -- but frequently we also 
agree, and I think thatï¿½s a positive thing.
   I would say to you that the Oversight and Investigations Subcommittee 
-- this is an investigative hearing, obviously -- weï¿½ve always had 
the practice of taking testimony under oath.  Our witnesses today, 
first of all, on Panel I is Mr. James Rispoli, who is the Assistant 
Secretary for Environmental Management for the United States Department 
of Energy.
   Mr. Rispoli, we welcome you here today, and as you heard, this is 
an investigatory hearing, and Iï¿½m assuming that you do not have any 
objection to testifying under oath.  I would also advise you that under 
the Rules of the House and the Rules of the Committee, you are entitled 
to be advised by legal counsel.
   And do you desire to be advised by legal counsel today?
   MR. RISPOLI.  No.
   MR. WHITFIELD.  Okay.  Well, in that case, if you would please rise 
and raise your right hand, Iï¿½d like to swear you in.
   [Witness sworn.]
   MR. WHITFIELD.  Thank you.  Well, Mr. Rispoli, youï¿½re now under oath. 
You are recognized you five minutes for your statement.

          TESTIMONY OF JAMES RISPOLI, ASSISTANT SECRETARY 
           FOR ENVIRONMENTAL MANAGEMENT, U.S. DEPARTMENT 
                           OF ENERGY 

   MR. RISPOLI.  Thank you, Mr. Chairman.
   Good morning, Mr. Chairman, Congressman Stupak and staff members 
who are here today.  Iï¿½m pleased to be here to answer your questions 
on the status of the Department of Energyï¿½s Environmental Management 
Program at the Paducah Gaseous Diffusion Plant.  I again thank you 
and your subcommittee for the ongoing support that you have provided 
for the Paducah cleanup project.
   This is my second visit to Paducah in the five months since I was 
sworn in as Assistant Secretary in August.  Iï¿½ve had the opportunity 
to become familiar with the site, with the cleanup accomplishments 
and the cleanup challenges that remain here at Paducah, as well as 
other issues that face the Department, site employees and the committee.
   During my brief tenure, Iï¿½ve been impressed with the dedication of 
the employees and appreciate the progress they have made in cleaning 
up the environmental legacy of the Cold War.
   The last two years have been a time of change and transition for 
the Paducah site, not only through contractor transitions, but also 
through alterations in the familiar site landscape.  Even as buildings 
are being removed and waste disposed, new construction is transforming 
what was an empty field into a state-of-the-art plant to convert and 
stabilize depleted uranium.
   
   To place our upcoming efforts in perspective, here are some recent 
Paducah program highlights.  Our most recent news, as you mentioned, 
is that the Department awarded a $191.6 million remediation services 
contract on December the 27th to Paducah Remediation Services.  This 
is a joint venture of Portage Environmental, a Native American-owned 
small business, and Shaw Environmental Services.
   We anticipate a smooth transition from the outgoing contractor, 
Bechtel Jacobs, to PRS.  The process of awarding this contract has 
taken longer than expected due in part to protests that were filed 
following the Departmentï¿½s initial selection of a winning bidder a 
year or so prior.  Bechtel Jacobs, its employees and subcontractors 
have continued to make progress in the cleanup program during procurement 
of the new contract, and the overall cleanup project is on track to 
meet the 2019 cleanup completion date.
   A new infrastructure services contractor, Swift & Staley, successfully 
transitioned following the contract award in March 2005 and assumed full 
responsibility for its work scope in June 2005.
   The Depleted Uranium Hexafluoride Conversion Project construction 
is well underway through a contract with Uranium Disposition Services, 
LLC.  Under the approved project baseline schedule, conversion operations 
are expected to start by June 2008.  In the next few months, the 
construction workforce will increase to between 150 to 200 employees.  
When conversion operations begin in 2008, the workforce will be 
stabilized at about 150 employees.
   Some of the key highlights here at Paducah include:  We emptied the 
last of 17 outside material storage areas, which completed removal of 
a number of potential sources of contamination.  Overall, 75 percent 
of an estimated 865,000 cubic feet of DOE material storage area materials 
have been characterized and 30 percent of the material disposed.  We 
are scheduled to complete disposal of all these materials by 2010.
   Weï¿½ve completed approximately 30 percent of about 44,000 tons of 
overall scrap metal removal work.  We anticipate sending the last 
shipment of classified scrap metal to the Nevada Test Site by the end 
of March 2006, just a couple of months from now.  We expect to complete 
the entire scrap metal removal by the third quarter of 2007.
   Other major milestones weï¿½ve met in 2005 and so far in 2006 include:  
Weï¿½ve disposed of 4,000 tons of scrap metal, including 1,400 tons of 
scrap metal from D-Yard.  The D-Yard work is 95 percent complete.  And 
weï¿½ve disposed of over 60,000 cubic feet of legacy waste in 2005.
   This brings me to one of the key success stories Iï¿½d like to 
mention that increases our confidence that we can reach our cleanup 
commitments here at Paducah, and that is the Departmentï¿½s relationship 
with the Commonwealth of Kentucky and the United States Environmental 
Protection Agency.
   In 2003, the Department signed a Letter of Intent and Regulatory 
Agreement with the Commonwealth of Kentucky and subsequently modified 
our Site Management Plan consistent with the terms of both of these 
agreements.  This has established a foundation upon which significant 
progress has been achieved.
   A major event that is tangible evidence of this progress is the 
issuance in August 2005 of a Record of Decision to remove trichloroethylene, 
or TCE, that is located in the area of the C-400 cleaning building, 
which is the main source of contaminants in the northwest groundwater 
plume.  This action will significantly reduce a primary source of 
off-site contamination.  We plan to begin field operations in 2007 with 
completion by 2010.
   The Department and the regulators are at varying stages on other 
response actions to address hazards and mitigate risks here at the 
Paducah site.
   Mr. Chairman, let me turn to a recent issue that you asked us to 
address, and that is the possible presence, though unlikely, of residual 
phosgene in 2,541 depleted uranium cylinders stored at the Paducah 
site and at Portsmouth, Ohio; and Oak Ridge, Tennessee.
   After the Management Alert that you mentioned was issued by the 
Inspector General on September 30th, 2005, we took immediate action 
to ensure no imminent safety and health concerns existed for plant 
workers or the community.  A rigorous review was performed to determine 
whether past operational practices eliminated any possible residual 
phosgene in the cylinders in question.
   This review process eliminated any question of residual phosgene 
in all but 25 cylinders total.  Of the 25 cylinders, 14 are here at 
Paducah, 10 are at Portsmouth, and 1 is at Oak Ridge.
   A detailed plan to safely and properly characterize and disposition 
these cylinders was developed and implemented.  Workersï¿½ safety and 
health requirements are in place to protect workers dispositioning 
these cylinders.  And, in fact, just a few days ago, we completed 
the field sampling of the 10 cylinders at Portsmouth, and none of 
them had any evidence of phosgene.
   All cylinders containing uranium hexafluoride or depleted uranium 
hexafluoride have been subjected to and will continue to undergo a 
prescriptive and rigorous monitoring and surveillance program.  At 
no time will cylinders of concern be introduced into the depleted 
uranium hexafluoride conversion plant process that would put either 
the workers or the public at risk.
   Paramount to our success at all these areas is safety.  Itï¿½s our 
top priority.  Safety affects all involved; the federal employees, 
the contractor employees, the subcontractor employees, the site and 
the community.
   Here at Paducah, the Bechtel Jacobs company and its subcontractor 
workforce can take great pride in reaching a major safety milestone 
here, and that is more than 3 million safe work hours without a case 
of a lost workday away from the job.
   The message I continually stress to our field staff and our 
contractors is that no schedule, no milestone is worth any injury to 
our workforce.  Every worker deserves to go home as healthy as she 
or he was when they arrived for work each day on the job.
   Itï¿½s my goal to lead the Environmental Management Organization 
as a results-driven high performance organization.  Weï¿½re instilling 
a project management mind-set that will be ingrained in all we do.  
Weï¿½ve taken major strides in integrating safety.  Now we must do the 
same with project management.  The management tools weï¿½re using to 
both manage and provide oversight must be integral.  Our success will 
depend on the ability to build up this rigor.
   Weï¿½re using industry standards as well as DOE guidance in all of 
our project and business practices, and I am now personally conducting 
quarterly reviews of all of our environmental and management projects 
and have directed my senior staff to carry out monthly reviews.  I 
believe this new focus will be the key to our success with strong and 
effective project management.
   Iï¿½m committed to work with all interested parties to resolve issues 
and will work with this committee and the Congress to address any of 
your concerns or interests.  DOE, our regulators, the communities and 
our contractors are partners in this effort.  Our success relies on 
this partnership.  We all will succeed, or we all fail together.
   Your continued support is vital to maintaining the positive momentum 
here at Paducah.  I look forward to a continuing dialogue with you 
and your staff, and I will be pleased to answer any questions the 
subcommittee may have.
   Thank you. 
   [The prepared statement of James Rispoli follows:]

  PREPARED STATEMENT OF JAMES A. RISPOLI, ASSISTANT SECRETARY FOR 
      ENVIRONMENTAL MANAGEMENT, U.S. DEPARTMENT OF ENERGY

   Good Morning, Congressman Whitfield and members of the Subcommittee.  
I am pleased to be here today to answer your questions on the status of 
the Department of Energyï¿½s Environmental Management program at the 
Paducah Gaseous Diffusion Plant.  I would like to thank you and your 
Subcommittee for the ongoing support of the Paducah cleanup project.
   This is my second visit to Paducah in the five months since I was 
sworn in as Assistant Secretary in August.  I have had the opportunity 
to become familiar with the site--the cleanup accomplishments and the 
cleanup challenges that remain, as well as other issues that face the 
Department, site employees and the community.  During my brief tenure, 
I have been impressed with the dedication of the employees, and 
appreciate the progress they have made in cleaning up the environmental 
legacy of the Cold War.  
   The last two years have been a time of change and transition for the 
Paducah site, not only through contractor transitions, but also through 
alterations in the familiar site landscape.  Even as buildings are being 
removed and waste disposed, new construction is transforming what was 
an empty field into a state-of-the-art plant to convert and stabilize 
depleted uranium.  
   To place our upcoming efforts in perspective, here are some recent 
Paducah program highlights:
 Our most recent news is that the Department awarded a $191.6 
         million remediation services contract on December 27, 2005, 
         to Paducah Remediation Services LLC ("PRS").  This is a joint 
         venture of Portage Environmental, a Native-American-owned 
         small business, and Shaw Environmental Services.  We anticipate 
         a smooth transition from the out-going contractor, Bechtel 
         Jacobs Company, to PRS.  The Department intends that the new 
         contractor maintain a productive and flexible workforce, 
         minimize the cost and impacts of the transition, and promote 
         practices that result in stable collective bargaining 
         relationships.  To that end, the new contract provides graded 
         preferences for current employees and former employees in 
         hiring for vacancies for non-managerial positions during the 
         first six months after the effective date of the contract.  
         The process of awarding this contract has taken longer than 
         expected, due in part to protests that were filed following 
         the Departmentï¿½s initial selection of a winning bidder.
 Bechtel Jacobs, its employees, and subcontractors have continued 
         to make progress in the cleanup program during the procurement 
         process, and the overall cleanup project is on track to meet 
         the 2019 cleanup completion date. 
 A new Infrastructure Services contractor, Swift & Staley, 
         successfully transitioned following a contract award in March 
         2005, and assumed full responsibility for its work scope in 
         June 2005.
 The Depleted Uranium Hexafluoride (DUF6) Conversion Project 
         construction is well under way through a contract with Uranium 
         Disposition Services, LCC.  Under the approved Project Baseline 
         schedule, conversion operations are expected to start by June 
         2008.  This schedule was revised in 2005 to incorporate the 
         effect of increased safety features for seismic protection and 
         containment of hazardous chemicals.  Schedule contingency was 
         also added to increase confidence that the Projectï¿½s major 
         milestones will be met.  In the next few months, the construction 
         workforce will increase to between 150-200 employees.  
         When conversion operations begin in 2008, the workforce will 
         be sustained at about 150 employees.   

	 Some of the key highlights on the Paducah project include: 
 We emptied the last of 17 outside DOE Material Storage Areas, 
         which completed removal of a number of potential sources of 
         contamination.  Overall, 75% of an estimated 865,000 cubic 
         feet of DOE Material Storage Area materials has been characterized 
         and 30 percent of the materials disposed.  We are scheduled 
         to complete disposal of all these materials by 2010.
 Although we have experienced delays in shipping waste for 
         disposal, we are aggressively pursuing our goals.  We have 
         completed approximately 30 percent of   about 44,000 tons of 
         the overall scrap metal removal work.  DOE recently approved 
         a change in subcontractor to expedite scrap metal shipping, 
         reducing the projected time and costs for the remainder of 
         the activity.  We anticipate sending the last shipment of 
         classified scrap metal to the Nevada Test Site by the end 
         of March 2006.  We expect to complete the entire scrap metal 
         removal by the third quarter of FY2007.
 In FY 2005, we were able to accelerate several Paducah 
         cleanup activities:
              Completed demolition of the C-603 Nitrogen Facility, 
                      5 years ahead of schedule
              Disposed of 3 million pounds of uranium 
                      tetrafluoride (UF4), 2 years ahead of schedule
              Removed the C-410 Hydrogen Holder Tank, 8 years 
                      ahead of schedule
              Accelerated by about three years disposal of 
                      nearly 700 cubic meters of legacy waste stored 
                      outdoors
              Expedited work on three additional inactive 
                      facility removal activities, which will accelerate 
                      completion on these activities by one to four years.

         Other major milestones we met in FY2005 and have met so far 
         in FY2006 include: 
 Disposed of about 4,025 tons of scrap metal, including 
         approximately 1,428 tons of classified scrap metal from D-Yard.  
         The D-Yard work is now 95 percent complete.
 Signed the C-400 Groundwater Record of Decision
 Completed Southwest Plume field work and issued the Draft Site 
         Investigation Report to the regulators
 Issued the Remedial Action Completion Report for the North-South 
         Diversion Ditch 
 Completed the C-746-S&T Landfill investigation and submitted 
         final report to regulators
 Disposed of 60,563 cubic feet of legacy waste in FY 2005
 Submitted Remedial Design Work Plan for C-400 Remedial Action.

   This brings me to one of the key success stories in the past two 
years that increases our confidence that we can reach our cleanup 
commitments--and that is the Departmentï¿½s relationship with the 
Commonwealth of Kentucky and the U.S. Environmental Protection Agency.  
For several years, cleanup progress was hindered by disputes over 
milestones, regulatory compliance, and cleanup approaches.  In 2003, 
the Department signed a Letter of Intent and a regulatory agreement
--called the "Agreed Order"--with the Commonwealth of Kentucky, and 
subsequently modified our Site Management Plan consistent with the 
terms of both of these agreements.  This has established a foundation 
upon which significant progress has been achieved.
   A major event that is tangible evidence of progress is the issuance 
in August 2005 of a Record of Decision to remove trichloroethylene, or 
TCE, that is located in the area of the C-400 Cleaning Building, the 
main source of the contaminants to the Northwest Groundwater Plume.  
This action will significantly reduce a primary source of off-site 
contamination.  DOE plans to begin field operations in 2007, with 
completion of treatment by 2010.  The Department and our regulators 
are at various stages on other response actions to address hazards 
and mitigate risks at the Paducah site.
   Mr. Chairman, let me turn to a recent issue that you have asked 
me to address:ï¿½ the possible presence, though unlikely, of residual 
phosgene in 2,541 depleted uranium cylinders stored at the Paducah 
site, and at Portsmouth, Ohio, and Oak Ridge, Tennessee.ï¿½ After the 
Department received a September 30, 2005, Inspector General Management 
Alert, we took immediate action to ensure no imminent safety and health 
concerns existed for plant workers or the community.ï¿½ A rigorous safety 
review process was employed to determine whether past operational 
practices eliminated any possible residual phosgene in the cylinders 
in question.ï¿½ This review process eliminated any question of residual 
phosgene in all but 25 cylinders.ï¿½ Of the 25 cylinders, 14 are stored 
at Paducah, 10 are stored at Portsmouth, and 1 is stored at Oak Ridge.ï¿½ 
A detailed plan to safely and properly characterize and disposition 
these cylinders has been developed and is being implemented.ï¿½ Worker 
safety and health requirements are sufficient to protect workers 
dispositioning these cylinders.ï¿½ All cylinders containing Uranium 
Hexafluoride or Depleted Uranium Hexafluoride have been subject to, 
and will continue to undergo, a prescriptive and rigorous monitoring 
and surveillance program.ï¿½ At no time will cylinders of concern be 
introduced into the Depleted Uranium Hexafluoride Conversion Plant 
that would put either facility workers or the public at risk.
   Paramount to our success in all areas of our project is safety--it 
is our top priority.  Safety affects all involved--federal employees, 
contractor and subcontractor employees, the site, and the community.  
Here at Paducah, the Bechtel Jacobs Company and its subcontractor 
workforce can take pride in reaching a major safety milestone--more 
than 3 million safe work hours without a case of a lost workday away 
from the job.  Also, the Depleted Uranium Hexafluoride Conversion 
Project construction crews logged nearly 250,000 safe work hours.  
All employees contributed to these records by taking seriously their 
personal responsibility to work safely.  We will continue to maintain 
and demand the highest safety performance in all that we do.  The 
message I have stressed to my field staff and to our contractors is 
that no schedule, no milestone, is worth any injury to our workforce.  
Every worker deserves to go home as healthy as she or he was when 
arriving each day on the job. 
   It is my goal to lead EM as a results-driven high performance 
organization.  We are instilling a rigorous project management mindset 
that will be ingrained in all projects.  We have taken major strides 
in integrating safety; now we must do the same with project management.  
The management tools used to manage cost and schedules must be used 
to manage and provide oversight integrally.  Our success will depend 
on our ability to build in this rigor.  We will target the shortcomings 
in our project management by using both DOE and industry standard project 
management and business management processes.  I am personally conducting 
Quarterly Reviews of all EM projects, and have directed that my senior 
staff carry out monthly project reviews.  This includes fully 
implementing our management systems, following through on corrective 
actions, and better applying risk management principles--that is 
identifying project uncertainties, developing mitigation measures and 
contingency, and holding action officers accountable for their resolution.  
I believe that this approach will be the key to our success with strong 
and effective project management.
   Complementing these refinements, we must ensure that our projects 
are managed by highly skilled, competent and dedicated leaders and staff 
workers, both Federal and contractor, who have the responsibility and 
the authority to meet the EM programï¿½s objectives.  In 2003, the 
Department formed the Portsmouth/Paducah Project Office, reporting 
directly to my office, to provide greater management focus and 
accountability.  I believe this office has contributed to the Departmentï¿½s 
ability to recognize and address issues more rapidly.  We will continue 
to streamline the relationship between the field and headquarters to 
enable the whole EM program to be more effective in its oversight role.  
I believe that if you have the right people in the right job with the 
right skills, they should be empowered to execute their responsibilities 
and be accountable for their decisions and outcomes.
   I believe that by taking these steps we will be in a position to 
address the challenges that lay before us.  I am committed to work with 
all interested parties to resolve issues and will work with this 
committee and the Congress to address any of your concerns or interests.  
DOE, our regulators, the communities and our contractors are partners 
in this effort.  This partnership goes far beyond the limits of a 
contract or an agreement.  Our success relies on this partnership.  
We are in this together--we all succeed or we all fail together.  
Your continued support is crucial to maintain the momentum that has 
so painstakingly been achieved. 
   I look forward to a continuing dialog with you and your staff.  I 
will be pleased to answer any questions the subcommittee may have on 
this subject.

   MR. WHITFIELD.  Well, thank you, Secretary Rispoli, and I do 
appreciate your mentioning phosgene in your opening statement.  I see 
Jim Malone is here today, and he wrote a story on October 25th, 2005, 
in "The Courier Journal" about this issue.  And the story, my 
understanding, stemmed from an internal memo dated September 30th, 
2005, by Alfred Walter, a DOE Assistant Inspector General for Inspections 
and Special Inquiries.
   And, in fact, Iï¿½d like to introduce this memo, this internal memo, 
for the record.
   Do you have a copy of it?
   What Iï¿½d like to know, when did DOE first learn of the possible 
presence of phosgene in some of the cylinders at Paducah, Portsmouth 
and Oak Ridge?
   MR. RISPOLI.  Mr. Chairman, indeed, it was -- I remember the day 
when that memo was delivered to us.  And as you point out, it was 
September the 30th.  Itï¿½s called a Management Alert, the IG, where 
they have an issue that arises that is of, you know, special-type 
interest, such as this one.  They have a protocol for issuing such 
a Management Alert.  And so I learned of it on September the 30th.
   As I indicated in my opening remark, using our chain of command, 
we initiated the process to review the potential to see whether there 
was any truth to the allegation that there might be phosgene or 
residual phosgene here, at Portsmouth and at Oak Ridge.
   MR. WHITFIELD.  Did DOE begin its analysis of those cylinders at 
the time you first learned of the possibility of phosgene, or was 
action taken only when the internal memo was obtained by the press 
and the story made public?
   Were you all taking action before that story?
MR. RISPOLI.  Mr. Chairman, yes, we were.  As I say, my management 
style is that every day I have a wrap-up, a short meeting with the 
chief operating officer.  All of our site managers work for her.  
And as soon as we heard of this allegation, we directed that a review 
process be put in place.
   And, in fact, I understand by talking with her -- her name is Dr. 
Ines Triay -- that she was getting very regular and periodic updates 
from the site managers at both here -- Mr. Bill Murphie, whoï¿½s here 
today -- as well as the site manager at Oak Ridge on the status of 
the actions to go through that process.
   MR. WHITFIELD.  Now, in that internal memo, it indicates that one 
of the most catastrophic safety consequences might occur when phosgene 
is introduced into the uranium hexafluoride conversion process.  And 
as you know, weï¿½re in the process of building these two depleted 
uranium conversion facilities right now, one at Paducah and one at 
Portsmouth.
   When was the contractor on those projects -- in other words, UDS -- 
when were they notified of this possible problem?
   MR. RISPOLI.  I cannot answer that question, Mr. Chairman.  I donï¿½t 
know.  But given that UDS is not yet in the process of that conversion, 
there was obviously no imminent hazard.  I think the concern to us was 
to conclusively determine whether or not there were any trace amounts 
of phosgene.
   I might also mention -- Iï¿½m not a chemist, but my understanding is 
that the report of catastrophic consequences would be if a cylinder 
that was filled with phosgene went into a conversion process that was 
not designed for that.  And so we are basically looking for either at 
zero or for trace amounts of phosgene.
   And as I indicated, just in the past couple of days, we finished 
the work at the Portsmouth site and found no evidence either of 
residual phosgene.
   MR. WHITFIELD.  Well, you know, we all know that phosgene was a 
chemical used by the Germans in World War II and can be quite lethal.
   And as the Assistant Secretary responsible for this type of issue, 
based on your investigation thus far, is there any health and safety 
risk to the workers at the plant or the surrounding community?  Is 
there any existing threat to them right now?
MR. RISPOLI.  I believe the correct answer is not to the best of our 
knowledge.  And if I may just go on a bit to put it into context, we 
within the next few days will begin the sampling process for the 14 
cylinders here in Paducah.  I will tell you that, again, we found no 
evidence of even residual phosgene in the 10 cylinders at Portsmouth, 
and we have no reason to believe that we will find any residual phosgene 
here in the cylinders at Paducah, either.
   This is, again, the very end stages of a very rigorous review to 
ensure that there is, indeed, no hazard to the workers or to the public 
from the possibility of any residual phosgene in these cylinders.
   MR. WHITFIELD.  Okay.  Now, I would like to focus a little bit on 
this nickel issue.  I know that Secretary Richardson and the Clinton 
administration issued the moratorium against a free release.
   I wrote a letter to Secretary Bodman on July 15th, 2005, about this 
issue, and I asked him two basic questions.  Number one, I said, "Is 
the Department of Energy planning to lift the current ban and, if so, 
when?"  And then I asked, "Are there any export restrictions on the sale 
of the contaminated nickel and, if so, what are they?"
   Now, I know that you can convey or sell this nickel.  There are 
options other than just free release.  So there are other options 
available to dispose of it without lifting the moratorium.
   But I will have to tell you, Mr. Secretary, that I was disappointed.  
I wrote that letter in July.  I received a response in September, but 
it basically was a nonresponse, because when I read the response, I 
didnï¿½t know any more than I did before I wrote the letter.  Surely you 
all do have an internal legal memorandum on whether or not there are 
any restrictions on the exporting of this material, because I know 
there are many foreign companies interested in buying it.
   Would you comment on those two questions? 
   MR. RISPOLI.  The issue at hand is that the nickel is known to be 
what is called volumetrically contaminated with radioactive material, 
and basically that means itï¿½s not on the surface, but itï¿½s throughout 
the ingots.
   As you correctly pointed out, the moratorium was placed by Secretary 
Richardson because of concerns from the public about the possible end 
use of the nickel should it be sold, and that moratorium is still in 
place.
   The plan that we have to determine a path forward is to have our 
new contractor, as you mentioned earlier, evaluate for us the current 
market conditions, the current potential uses and present to the 
Department the options that would provide for a safe use of the nickel 
while providing some sort of a return.  Itï¿½s not a waste material, 
obviously, but provide some sort of return to the taxpayer for the 
product.
   We expect, as you pointed out, to have the results of that evaluation 
of alternatives shortly, and we would be happy when we get that 
evaluation to share that with you.  And I believe that will answer -- 
at that point, we will be able to answer the types of questions that 
youï¿½re asking.
   MR. WHITFIELD.  Well, I know that the Nuclear Regulatory Commission 
has failed to set any international standards for processing this, but 
is there any current legal restriction against your exporting this 
material?
    MR. RISPOLI.  I am not aware of any regulatory constraints, and I 
will tell you that the amount of contamination, to the best of our 
knowledge, falls within DOEï¿½s own internal guidelines for useful 
disposition of the material.  So, again, what weï¿½re doing is by asking 
the contractor to do this, doing a more current evaluation -- market 
conditions change, potential uses change -- to see what the options 
might be for a safe and acceptable use for the material.
   MR. WHITFIELD.  Well, it just seems like from a common sense approach 
that, I mean, this material is quite valuable.  Itï¿½s valued in the 
millions of dollars.  In fact, itï¿½s been estimated in the neighborhood 
of $3 million dollars.
   Rather than see it just go to waste with the condition of our country 
today financially, and the deficits that we have and the need for local 
communities to have assistance in economic development, that I would 
urge you all to use every possibility to explore and hopefully be able 
to use this material in a restricted way.  Iï¿½m not talking about a free 
release, but a restricted way.
   MR. RISPOLI.  Yes, sir.
   MR. WHITFIELD.  When Secretary Bodman was in Paducah not too long 
ago, he made the statement that the Department of Energy was not in 
the economic development business.  Of course, if this plant closes, 
a lot of jobs are going to be lost.  And so the Secretary of Energy 
and the Department may not be in the economic development business, 
but this community is in the business of economic development and 
will try to do everything they can to try and bring industry in and 
so forth.
   But the reason I mentioned his statement -- and I have a great deal 
of respect for the Secretary, but I know that at the Oak Ridge plant, 
DOE has, I understand, seven employees that are involved in 
reindustrialization issues at Oak Ridge.  And as a matter of fact, it 
is my understanding that there was $150,000 in the FY 2005 budget for 
Oak Ridge for reindustrialization issues.
   I would ask you, and I would like to work with you to consider 
placing in the Departmentï¿½s budget some money for reindustrialization 
processes here at this plant.  I understand that the Member of Congress 
in that area is on the Appropriations Committee, and realistically we 
know what that means.  But I would say even if youï¿½re not on the 
Appropriations Committee, all of us represent taxpayers.
   If thereï¿½s going to be people involved in reindustrialization at 
that site, I do not see any reason why there shouldnï¿½t be some people 
involved in the reindustrialization at this site.  So I just wanted 
to point that out to you, and I would like to follow up and explore 
that in a better way if we can.
   Just a couple other questions, and then Iï¿½ll certainly turn it over 
to Mr. Stupak.  But I do want to touch on this pension issue.  I 
guess technically we refer to it as Section 633 of the Energy Policy 
Act.  But, Ted Strickland, others and I had urged, pleaded with, and 
asked the Department of Energy in its RFP to provide protections for 
the portability of these pensions.
   Weï¿½re talking about the same site.  Weï¿½re talking about basically 
the same people who, because of the change of contractors on a rather 
frequent basis -- thereï¿½s no reason that individuals doing the same 
work at the same site because the government changes the contract and 
the contractors change that they lose their pension benefits.
   I also understand that the Department of Energy wants to move to 
more 401(k)s and away from defined benefit plans, but I also know that 
we have a limited number of employees affected by whatï¿½s going on in 
Paducah.  So itï¿½s not an unlimited number, and I know that the economic 
impact, if a decision is made to protect these pensions, itï¿½s not going 
to be huge.
   But when we were not able to be successful in our negotiations with 
the Department of Energy, we specifically put the language in the Energy 
Policy Act to protect those workers, and we made it very clear what our 
intent was and what we wanted to do.
   Iï¿½m assuming that the Department of Energy felt like the language 
we had was effective, because representatives of the Department of 
Energy lobbied extensively in the conference and before to defeat 
this provision, and knock this provision out.  We were successful at 
keeping it in.  President Bush signed the Energy Policy Act with that 
language in there.
   Then I can tell you we were really shocked when we found out that 
the Department had made a decision that, in spite of this language, 
because -- the position I think youï¿½ve taken is because the 
remediation -- the new remediation company was not a signatory to the 
agreement of 2005 that these employees will not be covered.  I just 
find that hard to understand when the language is quite explicit.
   The Department knew what we were trying to do and tried to defeat 
it, so you must have felt like that the language was effective in 
accomplishing what we wanted to accomplish.  Then after itï¿½s adopted, 
you basically say, "Well, weï¿½re not going to cover them."
   What would be your response to that?
   MR. RISPOLI.  Well, Mr. Chairman, Iï¿½ve been following the 
correspondence between the staff and the attorney whoï¿½s the Deputy 
General Counsel at the Department having to do with this.  Heï¿½s the 
same gentleman who sent the letter to you, and we actually have copies 
of that letter here today, and we would be happy to submit that for 
the record, as well, and have copies for anyone else here who would 
like them.
   Obviously, pensions are an issue that affect the entire Department, 
not just the Environmental Management Program.  And, thus, the pension 
issues are considered to be not only very important, but are clearly -- 
if you read the correspondence in this case, theyï¿½re very intricate.
   Iï¿½m not an attorney.  I have not been personally a party to the 
development of the Departmentï¿½s evaluation of the language, but I can 
tell you that DOEï¿½s attorneys performed a thorough examination of 
Section 633 to arrive at their understanding of the legal effect of 
the statute.  Again, that letter was provided -- itï¿½s dated January 
12th, was provided to you on the 13th, and we have copies here today.
   In sum, just so that those present know what the Departmental General 
Counsel analysis concluded, it was that under Section 633, USEC 
employees that were eligible on April 1st, 2005, to transfer from USEC 
into Bechtel Jacobsï¿½ MEPP pension plan remained so eligible.  USEC 
is not an MEPP pension plan, but, again, employees who were eligible -- 
USEC employees who were eligible on April 1st, 2005, remain so eligible.
   That transfer eligibility is defined in the MEPP itself, the 
documents, that define what is meant by a grandfathered employee.  
Under the MEP Plan documents, the only remaining category of USEC 
employees that meet the definition of grandfathered employees are those 
covered by a Bargaining Unit Transition Agreement, called the BUTA, 
without a terminal date for employment by Bechtel Jacobs or one of 
their first or second tier subcontractors thatï¿½s also a signatory.
   I point out that one of the incoming prime contractors, Swift & Staley 
Mechanical, previously was an MEPP sponsor and a party to the BUTA.  
So the USEC hourly employees that were hired by that contractor were 
eligible, indeed, as of April 1st, 2005, to transfer into this MEPP.
   But to your point, the General Counselï¿½s interpretation is that 
USEC employees hired by a different contractor are not guaranteed a 
right to transfer into the MEPP per their interpretation of the statute.
   If you do have further questions, again, as I mentioned, Iï¿½m not 
an attorney.  The pensions policy implementation is not something Iï¿½m 
personally involved with, but I would be happy to take your questions 
for the record and provide them to DOEï¿½s General Counsel for their 
action.
   MR. WHITFIELD.  Well, you know, we know how lawyers are.  I mean, 
I think youï¿½re a lawyer.  Iï¿½m not a lawyer.
   [Laughter.]
   MR. WHITFIELD.  And they can frequently interpret things any way 
they want to fit their needs.
   But we know that USEC has their pension plan.  Even UDS has a Single 
Employee Pension Plan.  Bechtel Jacobs is the Multiple Employer Pension 
Plan administrator.  Even Swift & Staley employees have their pensions 
protected.  Paducah Remediation, Iï¿½m assuming, was not even in existence 
at that time, so they could not have been signatories.
   But I think our intent was quite clear, and we do intend to take some 
action.  Thereï¿½s either going to be a lawsuit or thereï¿½s going to be 
additional legislative solution, or hopefully DOE and its lawyers will 
revisit the issue and come to the common sense conclusion that it makes 
sense that these people have their pensions protected.
   So, Mr. Stupak, youï¿½re recognized for whatever time you need.
   MR. STUPAK.  Thank you, Mr. Chairman.
   Mr. Secretary, thanks for being here.  Going back to the pension 
issue, if the Department awards a contract of almost $200 million in 
December ï¿½05 and this contract language or, I should say, the conference 
report was, I believe, signed on August of 2005 and this language was 
actually drafted even before that, why wasnï¿½t this language then 
incorporated into that new contract that was given so these people 
would be protected?
   MR. RISPOLI.  I donï¿½t honestly have an answer to that question.  
I do not know why.  Iï¿½d be happy to take that question for the record, 
but I donï¿½t know why.
   MR. STUPAK.  I think we should get the General Counsel in here.
   MR. WHITFIELD.  Yeah.
   MR. STUPAK.  I mean, how long have you been at DOE?  
   MR. RISPOLI.  Since August 10th.
   MR. STUPAK.  Of this year, past year.
   MR. RISPOLI.  Past year, yes, sir.
   MR. STUPAK.  And youï¿½re on a defined benefit plan, right?  
   MR. RISPOLI.  Iï¿½m in the -- no, sir.  Iï¿½m not in a defined benefit 
plan.  The government transitioned in the 1980ï¿½s from the old CSR defined 
benefit plan to a plan thatï¿½s now a defined contribution plan where 
the government contributes some money into a fund, I contribute into 
a fund, and when I retire, itï¿½s kind of like a 401(k) type of a deal.
   But, no, sir, Iï¿½m not in a defined benefit plan as a civil servant.
   MR. STUPAK.  Hmm, all right.  Iï¿½ll disagree with you on that, but what 
youï¿½ve just described is another part of the pension system.  But 
anyways, all right.
   But this is a problem I think we have to get resolved one way or 
the other sooner.  And if thereï¿½s different language we need, then your 
General Counsel has to let us know, because the intent of Congress was 
very, very clear these workers be taken care of.  We know there would 
be transitions and new contractors and things like that.  We want to 
make sure the workers are taken care of.  And in the request for any 
kind of proposal to do a contract, I would hope you would include that 
in those requests.
   Getting to the new contract, why was there a change in contractor?  
According to your testimony, it looked like things were going well with 
Bechtel and all this.  Why would we change contractors?
   MR. RISPOLI.  Congressman, the Department, as you know, is working 
its Small Business Program to take into consideration not only legal 
requirements, but, also, typically, each administration has its own 
small business agenda and objectives.  And Environmental Management, 
even before I joined as the Assistant Secretary, was very actively 
looking for opportunities to find ways to have more small business 
prime contractors.
   You may -- you probably do know that M&O subcontractors do not 
count against the small business goal by the way that the statutes 
are written.  So Environmental Management several years ago began 
looking at ways to make these contracts more attractive and more 
accessible by small business.
   The decision to do that had absolutely nothing to do with the 
performance of the incumbent contractor.  In fact, the incumbent 
contractor here has been very helpful in working with us on the 
transition planning, for example, and has been very much on board 
with that process.
   MR. STUPAK.  But Shaw really isnï¿½t a small business.
   MR. RISPOLI.  Theyï¿½re a sub, but Portage is, in fact, owned by a 
Native American.  And the way that the laws, again, are written, itï¿½s 
sort of like a mentor/protege-type arrangement.  In other words, when 
you bring in a small business, it is not uncommon to have the support 
of others who are more expert in those fields.
   MR. STUPAK.  Right.  But weï¿½ve seen this so many times with 
departments.  They say itï¿½s a small business, and what they do is get 
the contract and subcontract out to a big corporation.  So -- well, 
itï¿½s done.
    But I guess going back to the pensions, it seems like youï¿½re strictly 
following the law here on these small businesses, but yet when it comes 
to the pension, we choose not to follow the law put forth by Congress 
in the Energy Policy Act of 2005.  You canï¿½t pick and choose which ones 
you want to follow.  If youï¿½re going to follow them, follow all of 
them, not part of them.
   Let me ask you this, this memorandum that the Chairman brought up, 
the memorandum of September 30th, are you familiar with it at all, this 
memorandum?
   MR. RISPOLI.  The one from the Assistant General Counsel.
   MR. STUPAK.  Yes.
   MR. RISPOLI.  Yes, sir.
   MR. STUPAK.  No, no.  This is the one from the Office of Inspector 
General, the Management Alert on --
   MR. RISPOLI.  Oh, yes, sir, I am.  Yes, sir.  I have it here.
   MR. STUPAK.  Okay.  Youï¿½re familiar with it then.
   MR. RISPOLI.  Yes, sir, I am.
   MR. STUPAK.  The last paragraph on the first page, "Summary of 
Preliminary Findings," says that in October 2000 was the first report 
of this phosgene.
   What happened between October of 2000 and September 30th of 2005, 
the date of this memo?  What happened on the phosgene for five years?  
Did it just sit there?
   Iï¿½m sure you must have gone back and looked to see what the history 
of this was?
   MR. RISPOLI.  I have no idea.  Again, I was not in the organization 
at that time.  The first that I learned of the issue was when this 
was actually hand-carried to my office the day that it was signed.  So 
I donï¿½t have any personal knowledge.
   MR. STUPAK.  You didnï¿½t ask anyone in your office to go back and 
see what happened?
   I mean, Iï¿½d be concerned that if they knew about it since October 
of 2000 by Department of Energyï¿½s Office of Environmental, Safety and 
Health informed DOE and the contract officials of this possibility of 
this phosgene.  I would have thought someone would at least go back 
and see what happened between October of 2000 and now.
   How do you address the issue?
   MR. RISPOLI.  I understand your question, and I donï¿½t even believe 
Mr. Bill Murphie, whoï¿½s our site manager, would know, because you 
werenï¿½t back here in those days, either.  So, again, I would take that 
question, if you permit me, for the record, because I donï¿½t know the 
answer to that question.
   MR. STUPAK.  Okay.  Let me ask you this question, another issue the 
Chairman brought up, the letter to Secretary Bodman, and you talked a 
little bit about it, about redevelopment of this area much like weï¿½ve 
done in Oak Ridge, DOE.
   Do you have any idea when youï¿½re going to have some kind of answer 
as to if this moratorium is lifted or when we can expect some kind of 
decision?
   Thatï¿½s what the Chairman asked you -- or, sorry, asked the Secretary 
in the first paragraph.  "Is DOE planning to lift the current ban and, 
if so, when?"  You said you were reviewing it and you have a contract 
review it.  Do you anticipate a date when we might know when a decision 
will be made?
   MR. RISPOLI.  Yes, sir.  We expect by midsummer we will have the 
alternatives as presented by the contractor with possible uses for the 
nickel.  As you know, the moratorium issued was broader than this nickel 
alone.
   MR. STUPAK.  Correct.
   MR. RISPOLI.  But the issue Iï¿½m discussing in particular is this 
particular nickel and whether or not it can be put into a constructive 
use that can yield some benefit back to --
   MR. STUPAK.  So by midsummer, we should have some decision.
   MR. RISPOLI.  Yes, sir.  And as I indicated, we would be happy to 
come up and brief you on that when we have those alternatives known to us.
   MR. STUPAK.  Do you know now if the uses of this nickel or this 
contaminated nickel, has the uses in the marketplace changed since 
Secretary Richardson put the moratorium in?
   MR. RISPOLI.  I would think so.
   MR. STUPAK.  Iï¿½d think so, too.
   MR. RISPOLI.  Yes, sir.  Itï¿½s been over five years now since he 
put the moratorium in place, and I think this is the first, you might 
say, serious formal effort to re-evaluate the market conditions to 
see what can be done with this nickel.
   MR. STUPAK.  Okay.  If the ban is lifted and this nickel is sold, 
do you have any objections to a portion of the net proceeds returned 
to Paducah and McCracken County for cleanup efforts or for economic 
development.
   MR. RISPOLI.  I would have to wait until I see what those alternatives 
are.  I can tell you that as of this minute, the answer is I donï¿½t have 
any blanket objection to any alternative or provisions.  But I think 
when we see what the alternatives are, weï¿½ll evaluate those at that 
time and see which way we can go.
   MR. STUPAK.  Well, in the seven employees DOE employs now at Oak 
Ridge which is involved in this reindustrialization process, thatï¿½s 
economic development of the Oak Ridge site, isnï¿½t it?
   MR. RISPOLI.  I was not aware until that statement was made that 
we had that number of people.  As you know, the Oak Ridge site is 
actually a science site with Environmental Management and NSA activity 
at it, and so that statement to me was new.  I was not aware of that.  
I really donï¿½t know.
   MR. STUPAK.  Well, reindustrialization process, thatï¿½s really 
economic development, though, right?
   MR. RISPOLI.  Yes, sir.
   MR. STUPAK.  Okay.  So if we just put the words "reindustrialized 
process" and put some money into the DOE budget, you have no problem 
of it coming to Paducah.  Instead of calling it economic development, 
weï¿½ll just rename it, right?
   MR. RISPOLI.  What I can say is that I have visited now 15 of our 
offices and sites.  Iï¿½ve met with many of those communities that are 
involved in economic development.  I believe that generally speaking 
weï¿½re working very well with them to try to find ways to provide 
benefits to the community because of the excess property, whether it 
be real property or personal property.
   So in a broad sense, Congressman Stupak, I believe that we are at 
all of our sites aggressively looking at ways to do those types of 
things when we find that we have both real and personal property that 
can be helpful to the community.
   MR. STUPAK.  And I know you have been to a number of these sites, 
as you said, and Iï¿½m sure every site appreciated the workers there.  
And even in your testimony on page six, you talk about the partnership 
that has to be formed, and so I hope youï¿½ll continue to work in that 
partnership with local communities and help them move forward with 
their site.
   Once, you know, an asset, a part of it is cleaned off and cleaned 
up and everythingï¿½s approved, cleanup, how long does it take usually 
to transfer that asset, a building or land, for local reuse, 
redevelopment?
   MR. RISPOLI.  I believe, generally speaking, that when the regulators 
are satisfied and the gaining organization is satisfied, that process 
goes, you know, for the government relatively quickly.  I would say 
within a year or so.  It involves certain processes that have been 
followed in the disposition of property.
   But, again, weï¿½ve been very supportive of helping effect those 
transfers in a timely way once the property is found suitable for that 
type of use.  And I would imagine this committee knows of examples 
throughout the complex, as well, where that has happened.
   MR. STUPAK.  In this process where youï¿½re working with the local -- 
keep going back to this issue.  Does it allow you, then, to return money 
back to the local community on any sale of an asset?
   MR. RISPOLI.  Let me take the example of real property. When a reuse 
organization has a potential use for a building, real property type, 
the Department does have authority to transfer that asset at less than 
fair market value if it will contribute to the economic development of 
a facility thatï¿½s basically going to both be closed and where there 
will be an economic impact to the community.  We have several statutory 
authorities with which we use those options.
   MR. STUPAK.  Sure.  Thatï¿½s real property, but I was asking more 
about the nickel.  Thatï¿½s not real property.
   Thatï¿½s more personal property, correct?
   MR. RISPOLI.  I believe that the statute, at least one of them, 
that covers real property also covers personal property, nonreal property. 
   MR. STUPAK.  Okay.  So returning part of those proceeds back to this 
community for either cleanup or redevelopment or reindustrialization, 
it would not be a problem, then, under the current DOE law?
   MR. RISPOLI.  I would have to -- in all honesty, I would have to 
review the law myself.  All of the examples, Congressman, that Iï¿½m 
personally familiar with have been real property.  Iï¿½m not familiar 
with any so far that has been personal property.  So I would have to 
review the language of those several statutes that permit us this 
authority.
   MR. STUPAK.  Nothing further, Mr. Chairman.  Thank you.
   MR. WHITFIELD.  Thank you, Mr. Stupak.
   I do want to reiterate we do want to be careful what we say.  So I had 
them check, and there are seven employees at the Oak Ridge facility 
that are involved in reindustrialization issues.  And like I said, we 
just donï¿½t want Paducah discriminated because we donï¿½t have someone on 
the Appropriations Committee and they do.
   MR. RISPOLI.  Yes, sir.
   MR. WHITFIELD.  You would agree that the moratorium would not have to 
be lifted for a restricted use of the nickel?  You would agree with 
that?  The moratorium, itï¿½s my understanding, was for a free release, 
and a restricted release could be done even with this moratorium in 
effect.
   MR. RISPOLI.  I think the process that we have, this issue still has 
very high level attention at the Department, and I think that our path 
going forward would be to see what the viable options are, evaluate 
those options.  Again, I would be happy to present those to you at the 
appropriate time.
   But, also, since the moratorium was placed by the Secretary, clearly, 
I would have to go back to that office with the options for the reuse 
of this nickel, as well.  I donï¿½t believe that I have that authority 
since the moratorium was signed at the Secretaryï¿½s level.
   MR. WHITFIELD.  Well, I mean, we understand that there are a lot of 
vested interests that do not want this nickel used under any 
circumstances for any reason, but I think most of the people in this 
area -- and weï¿½re the ones really affected by it -- we have very strong 
views on it, too.
   MR. RISPOLI.  Yes, sir.
   MR. WHITFIELD.  In conclusion, I would like to point out I do have 
the report language on the Energy Policy Act of 2005.  And on the section 
about employee benefits, this is whatï¿½s in the report language:  "This 
section provides that when DOE changes its contractors at the facilities 
or when hourly employees transfer from USEC to a DOE contractor or other 
contractor, the employees do not lose their accrued service credit or 
rights to transfer into the DOE contractorï¿½s Multiple Employer Pension 
Plan or the Multiple Employer Welfare Arrangement retiree health care 
plan."
   I mean, I think this report language is very clear.
   So do you have anything else?
   MR. STUPAK.  No, sir.
   MR. WHITFIELD.  Well, Secretary Rispoli, I want to thank you for being 
here today.  I hope that you will take some of these concerns back and 
discuss them with the Secretary and others.  And we would like to follow 
up with you on some of these as we go along, because these are all 
particularly important issues, and weï¿½ll continue to follow them closely.
   MR. RISPOLI.  Thank you.
   MR. WHITFIELD.  So thank you very much.
   MR. RISPOLI.  Thank you.
   MR. WHITFIELD.  At this time, I would like to call up the second 
panel of witnesses.
   On the second panel we have the Honorable William Paxton, the Mayor 
of Paducah, Kentucky; we have Mr. Daniel Orazine, who is the County 
Judge Executive of McCracken County; we have Mr. Michael Hughes, whoï¿½s 
the President of Bechtel Jacobs; and we have Mr. Rob Ervin, who is the 
President of the United Steel Workers Local 5-550.  And he, I understand, 
is accompanied by Mr. Richard Miller, whoï¿½s the senior policy analyst 
for the Government Accountability Project.
   So if you all would come forward.  I want to thank you all so much 
for taking time from your busy schedules and joining us today.  We 
genuinely appreciate your being here, Mayor and Judge and Mr. Ervin 
and Mr. Hughes.
   As you heard me on the first panel, I mentioned that this was an 
Oversight and Investigations hearing.  Itï¿½s our policy to take testimony 
under oath.  And do any of you have any difficulty in testifying under 
oath?  You all look pretty honorable to me.
   You are entitled to legal counsel if you want it.  Iï¿½m assuming you 
do not need legal counsel.
   Now, Mr. Miller, are you going to be testifying, or are you serving 
as an advisor?
   MR. MILLER.  I believe, Mr. Whitfield, that Iï¿½ve been asked to 
accompany Mr. Ervin here today by the committee.
   MR. WHITFIELD.  Well, what weï¿½ll do is weï¿½ll ask all of you to be 
sworn in.  That way weï¿½ll know we trust what youï¿½re saying.
   So if you would, stand and raise your right hand.
   [Witnesses sworn.]
   MR. WHITFIELD.  Thank you.
   Okay.  All of you have been sworn in, and we appreciate that.  And 
at this time, Iï¿½ll recognize Mayor William Paxton of Paducah for his 
opening statement.

        TESTIMONY OF WILLIAM F. PAXTON, MAYOR, PADUCAH, KENTUCKY; 
        DANIEL ORAZINE, COUNTY JUDGE EXECUTIVE, PADUCAH, KENTUCKY; 
        MICHAEL HUGHES, PRESIDENT, BECHTEL JACOBS, LLC, OAK RIDGE, 
        TENNESSEE; AND ROB ERVIN, PRESIDENT, UNITED STEEL WORKERS 
        LOCAL 5-550, PADUCAH, KENTUCKY, ACCOMPANIED BY RICHARD D. 
        MILLER, SENIOR POLICY ANALYST, GOVERNMENT ACCOUNTABILITY 
                    PROJECT, WASHINGTON, D.C. 

   MR. PAXTON.  Good morning.  I am Bill Paxton, Mayor of the City of 
Paducah.
   I want to start out by saying that I think youï¿½re asking exactly 
the right questions.  These are questions that we have been asking 
for several years, and itï¿½s refreshing to have those questions asked.
   I want to also say that this community is on the move.  Weï¿½re doing 
things right.  We have a community where the County Judge and the City 
Mayor work together on a daily basis.  We have a Chamber of Commerce 
that is aggressive and very competent, and we have a Greater Paducah 
Economic Development Council that has Wayne Sterling as its director, 
who was very instrumental in bringing BMW to South Carolina.  So weï¿½re 
doing things right, and weï¿½re going to continue to do things right.
   Having said that, I will say that my role this morning is to 
co-represent our local governments before this committee.  You will 
hear this morning from Judge Executive Danny Orazine and myself.  I 
assure you that Judge Orazine and I are of one mind on the various 
issues we wish to address with the committee today.
   I should also mention that the McCracken County Fiscal Court, as 
well as the Paducah City Board of Commissioners, has previewed my 
remarks and Judge Orazineï¿½s remarks.  Commissioner Robert Coleman is 
here this morning with us listening to the hearing.
   I would like to say thank you to Congressman Stupak for his travels 
all the way from Michigan to Paducah, along with Congressman Whitfield.  
Iï¿½m pleased to see Assistant Secretary James Rispoli here today, and 
I appreciate his time in coming to Paducah.
   Itï¿½s one thing for Congress to discuss these matters with the 
Department in Washington, D.C.  It is quite another to visit these 
sites and the communities in which they reside.  By doing so, I think 
you are better able to see and hear directly from the people that are 
most affected by your decisions.
   I would especially like to thank Congressman Whitfield for your 
leadership and ongoing efforts regarding the various concerns facing 
the Paducah Gaseous Diffusion Plant.  This plant has helped drive the 
economy in Western Kentucky, as you said earlier, for over 50 years.  
Two generations of Paducah workers have gained their livelihood at 
the plant.  Some have sacrificed a great deal more than just their time.
   Congressman Whitfield, I wish to thank you personally for your 
efforts in securing funding of over $200 million for the sick workers 
and their families.
   We are proud of the work that is being done at the plant.  Weï¿½re 
proud that the dedicated workers of the plant have contributed to the 
national interest by making the United States safe and prosperous.
   My remarks to the committee will not have anything to do with the 
pension plan or the phosgene issues we heard about earlier.  However, 
Congressman Whitfield, I deeply appreciate your hard work in protecting 
the benefits and retirement levels for our local workers.  I applaud 
your interest regarding the phosgene cylinders and the public safety 
concerns they represent.
   I realize the pressing demands on the committeeï¿½s time, and we do 
not have an unlimited amount of time today.  So it is time to get to 
the point.
   All of the communityï¿½s issues that the Judge will discuss with you 
today are done with an eye towards the future.  While many positive 
things have happened at the plant, there are really only two options 
for Paducah.  This community can either continue to wring its hands 
about the host of problems facing the site, or we can create a new 
partnership and vision with DOE for Paducah.  And that is the route 
I prefer.
   To accomplish this, we need the leadership of this Congress.  If 
and when our plant is finally decommissioned, the blow to the local 
economy will be enormous.  It must be softened.  The leadership in 
Paducah-McCracken County has been working diligently for years to 
diversify and expand the local economy.
   Over the last ten years, the City of Paducah and McCracken County 
have invested over $20 million in developing new industrial parks, 
spec buildings, and marketing.  Our local Greater Paducah Economic 
Development Council has embarked on an ambitious campaign to raise 
$6 million in the next four years to market and showcase this community 
to prospective communities.  All of those dollars will be raised locally.
   It is only logical that we must look at the plant site for new 
opportunities to provide investment in employment for the next generation 
of Paducahï¿½s families.
   Given the time constraints, there are several other details and 
issues important to this community that we will submit to the committee 
in the form of written comments.  I would like now to thank you for my 
time and turn it over to my good friend Judge Orazine for the details 
on the pressing matters that are facing us.
   Thank you.
   MR. WHITFIELD.  Thank you, Mayor. 
   [The prepared statement of William F. Paxton follows:]

   PREPARED STATEMENT OF THE HONORABLE WILLIAM F. PAXTON, MAYOR, 
                        PADUCAH , KENTUCKY

   Good morning.  My name is Bill Paxton and I am the Mayor of Paducah.  
My role this morning is to co-represent our local governments before 
this committee. You will hear this morning from Judge-Executive Danny 
Orazine and myself.  I assure you, Judge Orazine and I are of one mind 
on the various issues we wish to address with the committee today.  
I should also mention that the McCracken County Fiscal court as well 
as the Paducah City Board of Commissioners has previewed my remarks 
and Judge Orazineï¿½s remarks.  
   I would like to thank Congressman Stupak for traveling to Paducah 
today with Congressman Whitfield.  I am pleased to see Assistant 
Secretary James Rispoli here today.  It is one thing for Congress to 
discuss these matters with the department in Washington, D.C., it is 
quite another to visit these sites and the communities in which they 
reside.  By doing so, I think you are better able to see and hear 
directly from the people that are most affected by your decisions.  I 
would especially like to thank Congressman Ed Whitfield for your 
leadership and ongoing efforts regarding the various concerns facing 
the Paducah Gaseous Diffusion Plant.  The plant has helped drive the 
economy in Western Kentucky for over fifty years.  Two generations of 
Paducahï¿½s workers have gained their livelihoods at the plant.  Some 
have sacrificed a great deal more than just their time.    Congressman 
Whitfield, I wish to thank you personally for your efforts in securing 
funding of over $200 million for the sick workers and their families. 
We are proud of the work that is done at the plant.  We are proud that 
the dedicated workers of the plant have contributed to the national 
interest by making the United States safe, prosperous, and energy 
independent.  My remarks to the committee will not have anything to do 
with the pension plan or phosgene issues we heard about earlier.  
However, Congressman Whitfield, I deeply appreciate your hard work in 
protecting the benefit and retirement levels for our local workers.  
I applaud your interest regarding the phosgene cylinders and the public 
safety concerns they represent.
   I realize the pressing demands on the committeeï¿½s time and that we 
do not have an unlimited amount of time today.  So it is time to get 
to the point.  All of the community issues that the Judge will discuss 
with you today are done with an eye toward the future.  While many 
positive things have happened at the plant, there are really only two 
options for Paducah. This community can either continue to wring its 
hands about the host of problems facing the site; or we can create a 
new partnership and vision with DOE for Paducah. I think you know 
which choice I prefer.  To accomplish this, we need leadership of this 
Congress. If and when our plant is finally decommissioned, the blow 
to the local economy will be enormous.  It must be softened.  The 
leadership in Paducah and McCracken County has been working diligently 
for years to diversify and expand the local economy.  Over the last 
ten years, the city of Paducah and McCracken County have invested over 
$20 million dollars in developing new industrial parks, industrial 
spec buildings, and marketing.   Our local Greater Paducah Economic 
Development Council has embarked on an ambitious campaign to raise 
$6 million dollars in the next four years just to market and showcase 
this community to prospective companies.  All of those dollars will 
be raised locally. It is only logical that we must look at the plant 
site for new opportunities to provide investment and employment for 
the next generation of Paducahï¿½s families.
   Given the time constraints, there are several other details and 
issues important to the community that we will submit to the committee 
in the form of written comments.  I will turn now to Judge Orazine for 
the details on the pressing matters facing us.  Thank you.

   MR. WHITFIELD.  And, Judge, go ahead.
   JUDGE ORAZINE.  All right.  Thank you, Mayor.
   Chairman Whitfield, Congressman Stupak, and Assistant Secretary 
Rispoli, we thank you very much for holding this hearing here.  This 
is very important to us, and the issues youï¿½ve raised that weï¿½re going 
to talk about this morning are very important to our community.
   I am speaking for the entire county government.  I do have my judge 
pro tempore here, Ronnie Brinkman, as well as the Mayor and I are 
together on this and both Commissions because this is so important to 
our entire community.  But we do want to thank you for conducting the 
hearing here this morning.
   On behalf of the Paducah-McCracken County community, there are only 
three areas that I wish to discuss with the committee this morning, and 
they are:  Reindustrialization of the plant site, and Iï¿½ve heard some 
of your questions and comments already on that; metal recovery, 
especially nickel; and payment in lieu of taxes.
   In this post-privatization period, it was not likely that the plant 
would enrich uranium indefinitely.  USEC has announced their next 
generation centrifuge plant will be in Ohio.  We are not, as a community, 
going to sit and wait for whateverï¿½s going to happen with the USEC 
plant.  We want to be proactive and utilize that infrastructure and 
those assets out there to the best of our communityï¿½s future.
   The Department of Energy uses a formal process called "end state" 
to help determine the environmental cleanup process for our site.  
The level to which a site will be cleaned determines how it can be 
used in the future.  As the entities most affected by the future of 
these sites, weï¿½re asking, what is the proper role for local 
governments in the "end state" decision-making process?  And rightly 
or wrongly, our community feels disconnected with the so-called "end 
state" process.
   An important decision for the local government involved in DOE 
cleanup, a Federal district court in the Eastern District of Washington 
has recently ruled that pursuant to CERCLA, local governments have 
legal standing to be able to participate in the planning and selection 
of a remedy at a CERCLA cleanup site.  Pursuant to that decision, 
local governments must be allowed to participate in the planning and 
selection of a remedy.
   And weï¿½re asking, how does the community help determine cleanup 
priorities?  How can communities balance public health and environmental 
concerns with its potential reindustrialization of the site?
   Regrettably, Paducah continues to suffer from our reputation for 
being a 50-year host of this plant.  I have here a copy of "The 
Washington Post" article that was printed in 1999.  Also, we have a 
"National Geographic" story.  Youï¿½re always seeking publicity for 
your community, but not this kind.
   This is very hurtful and detrimental to our community, even though 
we have taken pride in being a host of the USEC plant for the 50 years 
itï¿½s been here.  Iï¿½m sure that you can imagine that this does not help 
us in the recruitment of industry and also any other things that we 
look at as beneficial to our community.
   Our local government is charged with specific legal mandates under 
state and Federal laws to serve as steward of all land resources and 
infrastructure assets.  It is our local government that is responsible 
for land use planning and control and, as said, should represent its 
citizens to DOE on site decisions.
   Currently, the City of Paducah and McCracken County are jointly 
engaged in a process of formulating a new comprehensive plan.  Paducah 
and McCracken County have both had comprehensive plans for many years, 
but this is the first time that weï¿½ve done one together.  And weï¿½re 
doing a very comprehensive study, especially of the plant site.
   The basic intent of the plan is to devise a land use policy that 
protects all of the land resources, determining the most logical 
pattern of development.  We must go through a process of asset 
utilization that helps secure our economic future.  This community 
and DOE must work together to have safe, secure, and compatible land 
uses surrounding the site.
   To achieve this, it is our recommendation to create a different 
formal mechanism for working with local government, and I think you 
all touched on that in some of your questions.
   But we -- in a letter to you, Congressman Whitfield, and to the 
rest of your Congressional Delegation dated December 14, 2005 -- 
requested that a DOE position be formed in the Paducah office to work 
exclusively on economic development and reindustrialization issues at 
the site.  Now, Mr. Bill Murphie does do a good job with the cleanup.
   When some of our delegation went to Oak Ridge, we saw how well that 
works there, and weï¿½re not just asking for that because they have 
someone.  We think that would be very beneficial for our community.  
So we repeat this and ask for your assistance today.  We do not believe 
this type of arrangement is unprecedented for DOE.  And as I said, 
itï¿½s because we visited the Oak Ridge site, we learned that sometimes 
DOE does get involved in economic development.
   Your colleague Senator McConnell was instrumental in securing 
statutory language to study the water policy at the site.  It is our 
request that DOE take an expansive view of the current proof study for 
the existing site in addition to potential uses of land that may be 
voluntarily acquired.  There are at least 4,000 acres of land in and 
around the plant site that should be in the master plan.
   The master plan should evaluate the reindustrialization opportunities 
of the gaseous diffusion site and the vicinity.  It is imperative that 
local government and the community be closely involved in this process.  
It all ties together; environmental remediation is linked to our 
reindustrialization.
   Now I want to speak to the nickel on the site, and you all have 
already asked some good questions about that.  We were glad to hear 
those questions and comments regarding the nickel.  But we look at 
that as an asset for Paducah.  After 50 years of solid support for 
DOE, and I truly mean that.  Weï¿½ve worked with DOE as well as we 
could.  Weï¿½ve looked at them as a partner in the community and still 
look at it that way.
   The Paducah community and region should receive equitable treatment 
compared to other sites, such as Hanford; Pinellas County, Florida; 
and most recently Oak Ridge, Tennessee.  They have experienced success 
through the transfer of assets through the Hall Amendment to bring 
back value to the community.
   I donï¿½t know how much Iï¿½m allowed to deviate from this, but I heard 
Secretary Rispoli talk about maybe they would study alternatives to the 
nickel, as well as one of the alternatives maybe keeping that here.  
So I would ask the Secretary, if I wouldnï¿½t be impolite, not to study 
any alternatives, but designate that as a Paducah site and let us study 
it together and how we can utilize that for our area.
   Recently, DOE included metal recycling in the scope of the new plant 
cleanup contract just awarded.  It is our hope that it is logical for 
DOE to lift the moratorium on metal recycling.  And I heard you ask 
questions on that.
   It is our recommendation to immediately work to re-establish the 
position of our community, that the value of certain assets be reserved 
for the economic benefit of the community.  Our position regarding 
the disposition of assets, especially the nickel, has been made known 
to DOE for several years.  That process was initiated in 1998, again 
reinforced in the year 2000, again in 2003 and 2004, and to the 
Congressional Delegation in 2005.
   It is not our intention to use the funds for general government.  
We donï¿½t want the nickel assets to be just put in our general fund 
to be soaked up and see no benefit to it.
   Rather, the community would use a portion of those funds for 
additional cleanup and reindustrialization of select parts of the site.  
By that, we realize the whole 4,000 acres probably will never be 
beneficial for an industrial site, but we need what part of it we can 
get, or provide incentives and infrastructure for the Graves County 
Regional Park.
   If we secure funds from the sale or transfer of assets, it is our 
goal to reduce the constant request for congressional appropriations 
for the region as they relate to mitigating the obvious negative 
impacts that come with the plant being downsized or closed.
   The last item and one of the also very important ones to us is the 
payment in lieu of taxes.  Less than two weeks ago, we had a large 
wildfire that was started near the plant site.  Our local fire fighting 
agency which covers the USEC territory responded to it to control the 
blaze that was potentially threatening to the site.
   While DOE real estate holdings encumber thousands of acres in 
McCracken County, real estate property taxes are not made to any local 
units of government, including the county, the fire department, or the 
local school district.  I just used the fire department as one example 
of a service that we do provide from the county for the USEC plant, 
as well as many other services.  These local units of government bring 
services of value to the plant site.
   In 2006, McCracken County will formally request DOE for payments 
in lieu of taxes.  The purpose of the payments would be to offset the 
loss of property tax revenue associated with the acquisition of the 
properties by the United States.  Property tax revenues pay for essential 
local services.  By way of comparison, the Tennessee Valley Authority 
site located adjacent to the Gaseous Diffusion Plant pays McCracken 
County nearly $800,000 annually in lieu of property taxes.
   Here again, we will be only seeking equitable treatment by DOE.  We 
understand that there are about 20 other communities in our nation that 
have a DOE presence that already receive these payments in lieu of taxes.
   In conclusion, Honorable Chairman and Congressman Stupak and staff, 
this concludes my prepared statement.  If you have any questions or 
concerns, I can address them now, or, of course, you may contact my 
office or the Mayorï¿½s office at your convenience.
   We do sincerely appreciate -- Iï¿½m not going to read this because 
I really mean this -- we really appreciate you all holding this hearing 
here.  I was glad to meet Congressman Stupak this morning and some of 
the other staffers.  And, Congressman Whitfield, we appreciate 
everything youï¿½ve done in the past and especially holding this hearing 
here. 
   [The prepared statement of Daniel Orazine follows:]

  PREPARED STATEMENT OF DANIEL ORAZINE, COUNTY JUDGE EXECUTIVE, MCCRACKEN 
                              COUNTY, KENTUCKY 

   Honorable Chairman Whitfield. Honorable Congressman Stupak.  Good 
morning.  My name is Danny Orazine.  I am the McCracken County 
Judge-Executive.  Thank you for conducting this hearing in Paducah. 
Congressman Whitfield, I too share the Mayorï¿½s gratitude for all of 
your assistance in representing our workers. 
   On behalf of the Paducah-McCracken County community, there are three 
areas of concern I wish to address with the committee today.  They are:
   1. Re-industrialization of the plant site,
   2. Metal Recovery, especially nickel, as decommissioning occurs; and
   3. Payments in Lieu of Taxes.


FIRST:  RE-INDUSTRIALIZATION
   In this post privatization period, it is not likely that this plant 
will enrich uranium indefinitely.  USEC has announced that their next 
generation centrifuge plant will be in Ohio.    We simply cannot just 
sit still and wait for that to happen. We must be working now to develop 
strategies to successfully benefit from the infrastructure and land 
assets that will be left behind.
   The Department of Energy uses a formal process called "End States" 
to help determine the environmental cleanup process for a site.  The 
level to which a site will be cleaned determines how it can be used 
in the future. As the entities most affected by the future of these 
sites, what is the proper role for local governments in the end state 
decision-making process?   Rightly or wrongly we feel disconnected 
from the so-called "End States" process.  In an important decision 
for local government involvement in DOE cleanup, a Federal District 
Court in the Eastern District of Washington has recently ruled that 
pursuant to CERCLA, local governments have legal standing to be able 
to participate in the planning and selection of a remedy at a CERCLA 
cleanup site.  Pursuant to that decision, local governments must be 
allowed to participate in the planning and selection of a remedy.ï¿½  
How does the community help determine cleanup priorities? How can 
communities balance public health and environmental concerns with 
potential reindustrialization opportunities?   Regrettably, Paducah 
continues to suffer from its national reputation as being a "dirty" 
site. National publications like National Geographic and the Washington 
Times spotlighted Paducah with feature articles regarding contamination 
and threats to public health.  I am sure you can imagine that this does 
not help in the recruitment of new industries in to the region.
   Our local government is charged with specific legal mandates under 
state and federal laws to serve as stewards of all land resources and 
infrastructure assets.  It is our local government that is responsible 
for land use planning and control and as such should represent its 
citizens to DOE on site decisions.  Currently, the city of Paducah and 
McCracken County are engaged in the process of formulating a new 
comprehensive plan.  The basic tenant of the plan is to devise a land 
use policy that protects all of the land resources by determining the 
most logical pattern of development. We must go through a process of 
asset utilization that helps secure our economic future.  This community 
and DOE must work together to have safe, secure, and compatible land 
uses surrounding the sites.  To achieve this, it is our recommendation 
to create a different formal mechanism for working with local 
governments.  
   In a letter to you, Congressman Whitfield, and the rest of our 
congressional delegation dated December 14, 2005, we requested that 
a DOE position be formed in the Paducah office to work exclusively on 
economic development and reindustrialization issues at the Paducah 
site.  We repeat this and ask for your assistance today. We do not 
believe this type of arrangement is unprecedented for DOE.  We have 
visited with local officials and DOE officials at the K-25 facility 
in Oak Ridge.  We think DOEï¿½s economic development efforts at K-25 
are a model for Paducah. Resources must be made available to support 
the local governmentï¿½s need to have a substantive role in land use 
planning on DOE facilities, especially in Paducah where DOE and USEC 
have stated they are downsizing the facility.
   Your colleague, Senator McConnell was instrumental in securing 
statutory language to study the "water policy box" at the site. It is 
our request that DOE take an expansive view of the current approved 
study for the existing site in addition to potential uses of land that 
may be voluntarily acquired.  At least 4,000 acres of land in and 
around the plant site should be "Master Planned". The Master Plan should 
evaluate the reindustrialization opportunities of the gaseous diffusion 
site and vicinity.  It is imperative that local government and the 
community be closely involved in this process.  It all ties together.  
Environmental remediation is linked to re-industrialization.

SECOND:  Nickel,  Metals, AND OTHER ASSET Recovery on Site
   After 50 years of solid support for DOE and doing our part for 
national security, the Paducah community and region should receive 
equitable treatment compared to other sites such as Hanford, WA, 
Pinellas County, FL, and most recently Oak Ridge, TN that have 
experienced success through the transfer of assets through the "Hall 
Amendment" to bring back value to the community.
   The urgency of establishing a position for the community in the 
disposition or sale of the nickel, other metals, and other assets on 
site appears to be building.  Recently DOE included metal recycling 
in the scope of the new plant cleanup contract just awarded. It is 
our hope that it is logical for DOE to lift the moratorium on metal 
recycling soon.
   It is our recommendation to immediately work to reestablish the 
position of the community, that the value of certain assets be reserved 
for the economic benefit of the community.  Our position regarding 
the disposition of assets, especially the nickel, has been made known 
to DOE.  That process was initiated in 1998, was reinforced in 2000, 
again in 2003, 2004, and again was supported again by Kentuckyï¿½s 
congressional delegation in 2005.
   It is not our intention to use any funds for "general government" 
purposes.  Rather, the community could use a portion of those funds 
for additional cleanup; re-industrialization of select parts of the 
site; or provide incentives and infrastructure for the Graves County 
Regional Park.  If we secure funds from the sale or transfer of assets, 
it is our goal to reduce the constant request for Congressional 
appropriations for the region as they relate to mitigating the obvious 
negative impacts that come with the plant being downsized or closed.

Payments In Lieu of Taxes
   Less than two weeks ago, a large wild fire was started near the 
plant site.  Local firefighters from McCracken County responded to and 
controlled the blaze that was potentially threatening to the plant site.  
While DOE real estate holdings encumber thousands of acres in McCracken 
County, real estate property taxes are not paid to any local units of 
government including the county, the fire protection district, or the 
school district.  These local units of government bring services and 
value to the plant site. In 2006 McCracken County will formally request 
DOE for payments in lieu of taxes.  The purpose of the payments would be 
to offset the loss of property tax revenue associated with the 
acquisition of the properties by the United States.  Property tax 
revenues pay for essential local services. By way of comparison, the 
Tennessee Valley Authority site located adjacent to the gaseous 
diffusion plant pays McCracken County nearly $800,000 annually in lieu 
of property taxes.  Here again, we will only be seeking equitable 
treatment by DOE.  At least 20 communities across the nation that have 
had a DOE presence have received payments in lieu of taxes. 

CONCLUSION
   Honorable Chairman, Congressman Stupak, and staff, this concludes 
my prepared statement.  If you have any questions or concerns, I can 
address them now, or of course you may contact my office at your 
convenience.  I sincerely appreciate you coming to Paducah.  It makes 
a real difference to the Fiscal Court, the Mayor, the City Board of 
Commissioners, and the community we are so fortunate to serve, when 
you take such a keen interest.   Keep up the good work. The Mayor and 
I look forward to working with you and DOE as we move this community 
forward.  We know you are sincere in your desire to help us help 
ourselves.  As we are fond of saying around here, Paducahï¿½s best days 
are still ahead us.  Thank you.
   Respectfully Submitted this 19th Day of January 2005

   MR. WHITFIELD.  Well, thank you all for your testimony.  It is quite 
in-depth with some great suggestions.
   And at this time, Mr. Hughes, weï¿½ll recognize you for your opening 
statement.
   MR. HUGHES.  Thank you, Chairman Whitfield and Representative Stupak.  
Iï¿½d like to go ahead and share with you what we put down for the 
committee.
   Good morning.  Iï¿½m Mike Hughes, President and General Manager of 
Bechtel Jacobs, which is an LLC, and weï¿½re the Environmental Management 
contractor for the Department of Energy at Oak Ridge, Tennessee, and 
Paducah, Kentucky, and formerly at Portsmouth, Ohio.  And I do appreciate 
the opportunity to testify today.
   Our primary mission at Paducah is to execute the Departmentï¿½s cleanup 
mission here and the program at the site with the support of numerous 
subcontracts.  Our current contract expires April 23rd, 2006.
   Iï¿½d like to say a few words about our recent environmental 
accomplishments, our preparations for transition of the new remediation 
contractor, and our continuing role as administrator of the 
Multi-Employer Pension Program and the Multi-Employer Welfare Agreement.
   First, Iï¿½d like to say a few things about safety.  Safety is always 
our first priority.  So adherence to the integrated safety management 
system approach and the dedication and commitment of our workforce has 
resulted in excellent safety performance at Paducah.
   In September, we completed 3 million hours of work without a lost 
time accident.  This is the second time weï¿½ve been able to achieve this 
and reach the 3-million-hour mark at the Paducah project, and we are on 
track to reach 3.5 million hours before the end of our contract this 
coming April.
   Second only to the safety of our workforce and the public is the 
protection of the environment.  We have enjoyed excellent relationships 
with our subcontractors, union representatives, and the local community; 
and together we have had notable successes in environmental remediation 
over the past year.
   Iï¿½d like to share some of those over the past year versus going all 
the way back to 1998.  These include the cleanup of ground and surface 
water contamination, scrap metal removal, the decontamination and 
decommissioning of inactive facilities, waste treatment and disposal 
of contaminated cleanup, and more.
   Specifically, we are proud of the following accomplishments:  We 
accelerated the pace of the legacy waste disposition, removing more 
than 3 million pounds of uranium tetrafluoride and a variety of other 
wastes.  By March of this year, we expect to have completed disposal 
of half of the total legacy waste volume at the site.  We disposed of 
5,000 tons of scrap metal last year.
   We emptied the last of 17 outdoor DOE material storage areas in 
October and have begun to empty indoor storage areas now.  We completed 
the accelerated decontamination and decommission of the plant nitrogen 
generating facility, issued initial documents for the removal of three 
more inactive facilities, and continue to make progress in the 250,000 
square-foot feed plant complex.
   Weï¿½ve also completed an investigation of two old landfills and the 
southwest groundwater plume and issued the initial work plan for 
investigation of the site burial group.
   With regard to the worker transition, shifting the transition, we 
will continue to diligently work with our Paducah employees, DOE, and 
the new remediation contractor to assure the safe, efficient, and 
effective transition of the remainder of our Paducah scope of work.  
To date, weï¿½ve completed five of the six necessary transitions of 
scope to other DOE prime contractors at Paducah and Portsmouth, Ohio, 
and to the best of our knowledge, these transitions have been fully 
satisfactory to the Department of Energy and to the contractors.
   We will continue to provide focused senior management leadership, 
subject matter experts, and a project management approach to assist 
all parties in a safe, efficient and effective transition of the 
remaining remediation work scope at Paducah.
   BJC has a separate arrangement with the Department of Energy to 
provide services for the administration of a Multi-Employer Pension 
Plan, which weï¿½ve been referring to as MEPP, and the Multi-Employer 
Welfare Agreement, MEWA, for the eligible covered employees of the 
four DOE prime contractors for remediation and infrastructure at 
Paducah and Portsmouth, Ohio.
   Bechtel Jacobs has been successful in providing benefits 
administration support for transitioned workforces over the past eight 
years from our Oak Ridge office.  Presently, this includes benefit 
administrations for 2,124 eligible active employees of Bechtel Jacobs 
Company, our 27 workforce transition subcontractors, and the remediation 
and infrastructure contractors and subcontractors in both Paducah and 
Portsmouth.  BJC Benefits Administration also provides benefit 
administration for approximately 400 retirees.
   On June 27th, 2005, Bechtel Jacobs Company was successful in the 
transition of 135 remediation and infrastructure eligible covered 
employees in Portsmouth and Paducah.  This included coordination with 
three prime contractors and seven subcontractors.  During this 
transition, none of the covered employees incurred any suspension or 
loss of benefits.
   To ensure a smooth transition for eligible employees, BJC Benefits 
Administration will work in conjunction with the BJC transition manager 
and remediation contractor and subcontractors to complete the following:  
Identify the responsible members of the Paducah remediation contractor 
and its subcontractors.  We will provide training facilitated by the 
Bechtel Jacobs Company Benefits administrative staff to familiarize 
the Paducah remediation contractor with the MEPP and MEWA.
   Weï¿½ll conduct formal presentations made by the plan administrator 
and the benefits manager on the Paducah remediation contractorï¿½s 
participation on the benefits and investment committee to help them 
understand their fiduciary responsibilities.
   Weï¿½ll ensure the Benefits Administration works closely with the 
contractor and subcontractors on the actual employee eligibility and 
administration; for example, enrollments for the various benefit 
providers.  And we will continue to provide quality benefit 
administration for the Paducah remediation eligible covered employees.
   Within the community, Bechtel Jacobs continues to work closely with 
the Paducah Gaseous Diffusion Plant Citizens Advisory Board when 
implementing DOEï¿½s Environmental Management decisions.  We appreciate 
their support and the recommendations.  This positive relationship 
with the CAB and the community is vital to the success of the cleanup 
program.
   Iï¿½d like to commend Paducahï¿½s elected officials, their business 
leaders and civic organizations for their support in the environmental 
cleanup program.  Bechtel Jacobs Company has always strived to be a 
good corporate citizen, and we have made many lasting friendships in 
this community.
   Let me also thank you, Chairman Whitfield, and fellow members of 
the Kentucky Delegation, particularly Senators Bunning and McConnell, 
for your continued support for the funding to continue this cleanup 
and extremely important environmental cleanup projects that have been 
ongoing.
   In conclusion, let me say that significant progress has been made 
in the environmental cleanup of the Paducah Gaseous Diffusion Plant 
during the tenure of Bechtel Jacobs Company.  We are very proud of 
our safety record, and weï¿½re also very proud of the accomplishments 
weï¿½ve made here.
   Weï¿½re committed to continuing our high level of professional support 
to the employees, the retirees, the community, Department of Energy, 
and the new contractor during this final phase of transition, and we 
will also continue to take seriously the responsibility to administer 
the pension and benefits beyond transition.
   Iï¿½d just like to say we are, in conclusion, extremely proud of what 
weï¿½ve been able to do here.  Weï¿½ve been very thankful to have the 
opportunity to serve the Department of Energy as the prime contractor 
here, and in the transition, we will continue to take care of people 
and that process and work with the community and the new contractors 
to make sure that thatï¿½s seamless.
   Thank you very much.
   MR. WHITFIELD.  Thank you, Mr. Hughes.  
   [The prepared statement of Michael Hughes follows:]

 PREPARED STATEMENT OF MICHAEL HUGHES, PRESIDENT, BECHTEL JACOBS, LLC 

SUMMARY
   Bechtel Jacobs Company LLC (BJC) is the Department of Energyï¿½s (DOE) 
Remediation contractor at the Paducah Gaseous Diffusion Plant in Paducah, 
Kentucky. Our primary mission is to effectively execute DOEï¿½s 
environmental cleanup program at the site.  We assumed responsibility 
for the Paducah work on April 1, 1998.  The Infrastructure and Cylinder 
Management scopes of work were transitioned to other DOE prime 
contractors in June 2005, and we are scheduled to transition the 
remaining Remediation scope to another DOE prime contractor prior to 
our current contract expiration date of April 23, 2006.  Under a 
separate arrangement with DOE, BJC will continue pension and benefit 
administration for eligible covered employees of the new DOE prime 
contractors.
   Safety of our workforce and the public is always our first priority.  
In September, we completed three million hours of work without a 
lost-time accident.  We have had notable environmental remediation 
successes during the past year in the cleanup of groundwater and surface 
water contamination, removal of scrap metal, decontamination and 
decommissioning of inactive facilities, and treatment and disposal 
of contaminated waste.  We are proud of our safety record and 
accomplishments.
   We commend Paducahï¿½s elected officials, business leaders, and civic 
organizations for their support to the environmental cleanup program.  
Let me also thank you, Representative Whitfield, and the fellow members 
of the Kentucky delegation, particularly Senators Bunning and McConnell, 
for your continued support for the funding of this extremely important 
work.

INTRODUCTION
   Good morning.  I am Mike Hughes, President and General Manager of 
Bechtel Jacobs Company LLC (BJC), the Department of Energyï¿½s (DOE) 
environmental management contractor for Oak Ridge, Tennessee; Paducah, 
Kentucky; and formerly at Portsmouth, Ohio.  Our primary mission is 
to effectively execute DOEï¿½s environmental cleanup program at the site 
and support an effective workforce transition program.  We assumed 
responsibility for the Paducah work on April 1, 1998.  The 
Infrastructure and Cylinder Management scopes of work were transitioned 
to other DOE prime contractors in June 2005, and we are scheduled to 
transition the remaining Remediation scope to another DOE prime 
contractor prior to our current contract expiration date of April 23, 
2006.  Under a separate arrangement with DOE, BJC will continue pension 
and benefit administration for eligible covered employees of the new 
DOE prime contractors.


ENVIRONMENTAL MANAGEMENT
   BJC has achieved notable successes in environmental management on 
the Paducah Project.  We have made significant progress in legacy 
waste disposition, decontamination and decommissioning (D&D), scrap 
metal removal, and the characterization and disposition of materials 
in storage sites across the plant.  We have advanced the groundwater 
program and completed several studies needed for future cleanup decisions.
   By the anticipated end of our contract at the Paducah Gaseous 
Diffusion Plant, we will have completed disposal of more than half of 
the legacy waste inventory at the Paducah site.  Since the start of 
Fiscal Year 2005, we have disposed of more than 72,000 cubic feet of 
legacy waste.  This included a special effort to examine and dispose 
of nearly three million pounds of uranium tetrafluoride two years 
ahead of schedule, and we accelerated disposition of legacy wastes 
that have been stored outdoors for many years.
   Our scrap metal removal project has disposed of approximately 5,000 
tons of scrap metal over the last year.  We have disposed of more than 
12,000 tons of scrap metal to date, and a recent restructuring of our 
principal subcontract for scrap metal disposition is allowing us to 
increase the pace of disposal, while reducing shipping vulnerabilities. 
A special effort to dispose of more than 250 tons of metal turnings 
in 2005 was highly successful.  
   Under DOEï¿½s 2003 Agreed Order with the Commonwealth of Kentucky, 
we have completed characterization of 75 percent of the estimated 
855,000 cubic feet of material in 160 DOE Material Storage Areas 
(DMSAs) located throughout the Paducah Gaseous Diffusion Plant site. 
In October 2005, we emptied the last of 17 outdoor DMSAs and have now 
turned our focus to the indoor locations.  Some of the areas have been 
returned to DOE or USEC use, and we have 20 formal Resource Conservation 
and Recovery Act Closure Plans where the work has been completed and 
we are awaiting regulatory review and approval.
   We have accelerated the D&D of several inactive Paducah facilities 
and completed the removal of the Nitrogen Generating Facility in October 
2005, five years ahead of schedule.  Essential evaluations and cost 
analyses have been completed for the D&D of three other inactive 
facilities, and we continue to make progress in the D&D of the 250,000 
square foot Feed Plant complex.
   The August 9, 2005, signing of the Record of Decision on the C-400 
Groundwater Action has allowed us to proceed with the planning document 
for the remediation of the major groundwater contamination source at 
the site.  Direct Heating Technology, shown to remove 98 percent of the 
volatile organic contamination in the target area during our earlier 
Six-Phase Heating Treatability Study, can now be applied with confidence 
to the dominant source of risk at the site.  In the interim, we have 
continued to treat the most contaminated portions of the groundwater 
plumes, bringing the total volume of groundwater treated to 1.8 billion 
gallons. We have also continued to protect residents north of the plant 
through administration of DOEï¿½s Water Policy Box lease agreements.
   These and other environmental efforts - including extensive ongoing 
environmental monitoring, completion of the Final Remedial Action Report 
on the North-South Diversion Ditch, and key studies of the Southwest 
groundwater plume, the former S and T Landfills, and site-wide surface 
water - have reduced risk to the public and site workers from actual 
and potential environmental contamination.  As we close out our work 
with DOE at the Paducah plant, we can transition DOEï¿½s environmental 
management work to the incoming contractor with strong momentum and 
on sound footing.

CONTRACT TRANSITION
   DOE divided the Management and Integration contracts at Paducah 
and Portsmouth into distinct work scope elements at each site.  These 
work scope elements are Infrastructure, Cylinder Management, and 
Remediation at both sites, and Citizens Advisory Board support at 
Paducah.  Only one work scope element, Remediation at Paducah, remains 
to be transitioned to a new contractor.  BJC is committed to fully 
supporting the DOEï¿½s transition of the remaining remediation work 
scope. 
   During the past year, our company has completed the safe, efficient, 
and effective transition of the Cylinder Management program and the 
Infrastructure scope of work at Paducah. The success of our transition 
program can be attributed to a three-tiered management approach that 
includes:  focused senior management leadership, a subject matter 
expert transition team, and a proven project management approach.
   The General Manager of the Paducah Project has overall responsibility, 
the Operations Manager ensures that ongoing activities continue 
unimpeded during transition, and the Transition Manager is responsible 
for the specific transition activities.  The focused management team 
has delivered very successful transitions to date and will do so for 
the remaining work scope.
   We have identified 40 distinct work scope areas for remediation 
that have subject matter expert leads in Paducah supported by Oak Ridge 
counterparts.  This arrangement allows us to utilize the companyï¿½s 
full expertise to assist the Remediation contractor in identifying, 
coordinating, and closing out key activities and issues of concern.  
Through our project management approach, a comprehensive schedule 
containing 400 action items was developed and tracked to completion 
during the Infrastructure transition.  The current Remediation transition 
project schedule also contains approximately 400 action items, more 
than 100 of which have already been completed. 

ADMINISTRATION OF BENEFITS
   BJC will continue to provide services for benefit and pension 
administration of the Multiple Employer Pension Plan (MEPP) and the 
Multiple Employer Welfare Agreement (MEWA) for the eligible covered 
employees of four DOE prime contractors for Remediation and 
Infrastructure at Paducah and Portsmouth.  On April 25, 2005, DOE 
directed execution of service agreements with the Infrastructure and 
Remediation contractors.  BJC serves as the plan administrator and 
executes the plan as set forth by DOE in our contract.
   BJC has been successful in providing benefits administration and 
support for transitioned workforces over the past eight years.   
Beginning with the transition of Lockheed Martin incumbent employees 
to BJC and its first- and second-tier subcontractors, BJC has provided 
benefits administration and support from our Oak Ridge office.  
Presently this includes benefits administration for 2,124 eligible 
active employees of BJC, our 27 workforce transition subcontractors, 
and the Remediation and Infrastructure contractors/subcontractors in 
Paducah and Portsmouth.  BJC Benefits Administration also provides 
benefit administration for approximately 400 retirees.
   On June 27, 2005, BJC was successful in the transition of 135 
Remediation and Infrastructure covered employees in Portsmouth and 
Paducah.  This included coordination with the three prime contractors 
and seven subcontractors.  During this transition none of the covered 
employees incurred any suspension or loss of benefits.
   To ensure a smooth transition for the Paducah Remediation eligible 
covered employees, BJC Benefits Administration is working with the BJC 
Transition Manager and Remediation contractor/subcontractors to:
   * identify the responsible members of the Paducah Remediation 
     contractor and its subcontractors,
   * provide training, facilitated by BJC Benefits Administration, 
     to familiarize the Paducah Remediation contractor with the MEPP and 
     MEWA, 
   * conduct formal presentations, made by the Plan Administrator and 
     the Benefits Manager, on the Paducah Remediation contractorï¿½s 
     participation on the Benefits and Investment Committee to help 
     them understand their fiduciary responsibilities,
   * work closely with the Paducah Remediation contractor/subcontractors 
     on the actual employee eligibility and administration (e.g., 
     enrollments for the various benefits providers), and
   * continue to provide quality benefit administration for the Paducah 
     Remediation eligible covered employees.
   The new Remediation contractor and subcontractors will sign a Benefits 
Accounting and Administration Services Agreement and an Adoption 
Agreement to allow continued participation for eligible transitioned 
employees.  BJC will ensure a successful transition and continued 
benefits administration for the Paducah Remediation contractorï¿½s eligible 
covered employees.

CLOSING
   Significant progress has been made in the environmental cleanup of 
the Paducah Gaseous Diffusion Plant during the tenure of BJC.  We are 
proud of our safety record and accomplishments.  We are committed to 
continue our high level of professional support to our employees, 
retirees, the community, DOE, and the new contractor during this final 
phase of transition, and we will continue to take seriously the 
responsibility to administer the pension and benefits beyond transition.  
   We commend Paducahï¿½s elected officials, business leaders, and civic 
organizations for their support to the environmental cleanup program.  
Let me also thank you, Representative Whitfield, and the fellow members 
of the Kentucky delegation, particularly Senators Bunning and McConnell, 
for your continued support for the funding of this extremely important 
work.
   Thank you.

   MR. WHITFIELD.  And at this time, weï¿½ll recognize Mr.ï¿½Rob Ervin for 
his opening statement.
   MR. ERVIN.  Good morning.  I want to thank the Chairman and ranking 
member for holding this hearing today in Paducah and inviting me to 
testify.
   My name is Rob Ervin, and I have worked at the Paducah Gaseous 
Diffusion Plant for 17 years.  I am currently employed by USEC as an 
instrumentation and controls technician.  In addition, I serve as the 
President of USW Local 550, which represents over 700 hourly workers 
employed by USEC and Department of Energy Environmental Management 
Program contractors and subcontractors at the Paducah plant, including 
Bechtel Jacobs, Swift & Staley, Weskem, and Uranium Disposition Services.
   At the outset, I would like to recognize the leadership provided 
by Congressman Ed Whitfield over the many years he has represented 
our plant.  His work covers pension protections in the USEC Privatization 
Act of 1996, holding oversight hearings on the problems created by 
privatization, negotiating a memorandum of agreement to guarantee 
operations of the Paducah enrichment plant through the year 2010, and 
expanding the Former Worker Medical Screening Program.
   He helped enact legislation to dispose of the 50-year legacy of 
depleted uranium hexafluoride at Paducah and serve as a lead House 
sponsor of the Energy Employees Occupational Illness Compensation 
Program Act.  He used his perch on Energy and Commerce to track DOEï¿½s 
failures in implementing its part of the compensation program and 
then worked to transfer the DOEï¿½s program over to the Department of 
Labor in 2004.
   Most recently, he joined on a bipartisan basis with Representative 
Ted Strickland in enacting legislation to protect the pensions and 
retiree health care benefits of USEC and Bechtel workers.
   This list seems long because there has been a lot accomplished.  Our 
membership thanks him and his staff for these and many other efforts.
   I would be remiss if I did not mention how much the workers at 
Paducah plant have appreciated the tireless efforts of Karen Long.  We 
will miss her.
   Today, my testimony will focus on two areas, ensuring portability 
of the pension and retiree health care benefits for USEC hourly workers 
who transfer to the DOE cleanup contractors and continuing the DOE 
Former Worker Medical Screening Program at Paducah.
   Today, workers employed at Paducah have the right to carry pension 
service credits and retiree medical benefits from USEC to cleanup 
contractors.  Unfortunately, DOE is bringing this practice to an abrupt 
halt.
   Regardless of the changes to employment arrangements, such as USEC 
privatization, the shift to an integrating contractor with multiple 
subcontractors or the replacement of the management and operations 
contractor, pension portability has been the rule at the Paducah 
plant throughout its 50-year history.
   In 1998, DOE directed Bechtel Jacobs to establish the Multiple 
Employer Pension Plan, or the MEPP, a defined benefit plan which 
welcomed displaced USEC workers and facilitated pension portability 
between DOE prime contractors and their subcontractors.
   When DOE issued requests for proposals for remediation and 
infrastructure contractors in November 2003 to replace Bechtel Jacobs, 
it severely narrowed the definition of which workers will be grandfathered 
and, therefore, eligible to participate or transfer into the MEPP.  
USEC workers and Bechtel Jacobs workers above first tier supervision 
were excluded.
   Two key documents govern benefit portability at Portsmouth and 
Paducah, the Bechtel Jacobs Multiple Employer Pension Plan and the 
Bargaining Unit Transition Agreement.
   In response to concerns about DOEï¿½s request for proposals, Mr. 
Whitfield sent then Secretary of Energy Abraham a December 18th, 2003 
letter expressing concerns about the loss of pension continuity.  
Senators McConnell and Bunning followed with a December 19th, 2003 letter.
   DOE has questioned whether permitting USEC employees to transfer 
into the MEPP with their full service credits but without corresponding 
proportionate transfer of pension plan assets might result in fiscal 
impairment of the plan.  DOE received a briefing showing this concern 
is misplaced.
   Benefits are paid under the MEPP on a pro rata basis proportional 
to years of employment if employees are also participating in the USEC 
plan.  USEC is separately obligated to make pension payments from its 
pension plan on a pro rata basis.  Employees simply receive two pension 
checks.  DOEï¿½s concerns about pension transfers are a red herring.
   When DOE announced the award of new contracts in Portsmouth and 
Paducah in the spring of 2005, the pension portability issues were 
not resolved.  Representatives Whitfield and Strickland then attached 
Section 633 to the Energy Policy Act of 2005.  Section 633 codifies 
the benefit continuity arrangements at Portsmouth and Paducah that 
were in effect on April 1st of 2005.
   DOE vigorously lobbied against this pension provision during the 
House/Senate conference during July 2005.  Following its legislative 
loss, DOE issued a September 13th, 2005 implementation plan which 
excludes USEC hourly workers.  On October 3rd, Representatives Whitfield 
and Strickland challenged the interpretation by pointing out that 
Section 633 specifically includes USEC workers.
   On January 12th, 2006, DOE responded that USEC workers will not 
have a right to transfer their pension benefits with them when employed 
by new DOE contractors if the DOE contractors they go to work for were 
not previously parties to a Bargaining Unit Transition Agreement on 
April 1st, 2005.
   Nowhere does Section 633 require that new DOE contractors had to 
already have been signatories to a Bargaining Unit Transition Agreement 
back on April 1st, 2005.  The law is unambiguous.  DOE has a 
forward-looking obligation to continue pension continuity for all 
employees who had these rights on the benchmark date of April 1st, 
2005.
   As an immediate matter, DOEï¿½s position is that USEC hourly employees 
cannot bring their pension service credit with them to Paducah 
Remediation Services, the new Paducah remediation contractor who was 
awarded a DOE contract on December 27th, 2005, because Paducah 
Remediation Services was not a signatory to the Bargaining Unit 
Transition Agreement back on the April 1st benchmark date.
   DOE wants to reduce the number of workers in its contractorsï¿½ 
defined pension plan as a part of a national pension agenda.  While 
cutting off employees from defined benefit plans is an unfortunate 
trend in the private sector, it is not the DOEï¿½s job to second-guess 
a Congressional directive which continues such benefits.  DOE has 
fixed its legal position around its policy to reduce their legacy 
pension costs by taking it out of the pockets of the workers.
   As much as we all want the Paducah plant to remain operational, we 
are mindful of the economic challenges presented by rising electricity 
costs and the development of lower cost centrifuge technology.
   In the future, as USEC workers seek to fill available openings with 
the cleanup contractors, the loss of pension continuity is a concern.  
The possibility of further downsizing coupled with the potential for 
further DOE decommissioning jobs makes pension continuity at Paducah 
an imperative for a much larger number of workers and a precedent that 
should not be tampered with.
   In sum, DOE should be asked whether they intend to comply with the 
letter and intent of Section 633.  We hope that DOE will not make it 
a routine practice to require two acts of Congress to implement a given 
Congressional directive as it did with the DUF6 Project.  Without 
pension portability assured for USEC hourly workers, we believe it 
will be difficult to ensure a seamless transition to the new remediation 
contractor.
   The DOEï¿½s Former Worker Medical Screening Program has screened 2,597 
workers who were exposed to radioactive or toxic substances at Paducah 
between May 1st, 1999, and December 31st, 2005.  The basic screening 
program was expanded in November 2000 to include an early lung cancer 
screening program and to allow current workers to participate.
   Using a low dose CT spiral scanner on a mobile unit traveling between 
Portsmouth and Paducah and Oak Ridge, 1,620 individuals have received 
lung scans in Paducah and 5,829 at the three gaseous diffusion plants.  
Forty-four lung cancers were identified at Stage I, when treatment has 
a very high probability of saving a life.  The low dose CT spiral scan 
is four times more likely than a chest x-ray to detect cancer at an 
early stage.
   DOEï¿½s Former Worker Medical Screening Program is going to be operating 
with a smaller footprint for the next two years beginning this spring.  
Appropriations legislation has secured funding for screening at the 
gaseous diffusion plants in past years, and a provision may be required 
for fiscal year 2007.
   Thank you for your consideration.
   MR. WHITFIELD.  Mr. Ervin, thank you. 
   [The prepared statement of Rob Ervin follows:]

PREPARED STATEMENT OF ROB ERVIN, PRESIDENT, UNITED STEEL WORKERS LOCAL 5-550

   My name is Rob Ervin and I have worked at the Paducah Gaseous 
Diffusion Plant for 17 years. I am currently employed by USEC as an 
Instrumentation and Controls Technician. In addition to my craft 
responsibilities, I serve as the President of USW Local 550, which 
represents over 700 hourly workers involved in production for USEC 
and Environmental Management program activities for Department of 
Energy ("DOE") contractors and subcontractors at the Paducah plant, 
including Bechtel Jacobs, Swift and Staley, Weskem, and Uranium 
Disposition Services (the DUF6 disposition project). My home address 
is 398 Country Club Estates, La Center, KY 42056. Please contact me 
at 270-442-3668.
   At the outset, I would like to recognize the leadership provided 
by Congressman Ed Whitfield over the many years he has represented 
our plant.  His work covers pension protections in the USEC Privatization 
Act of 1996, holding oversight hearings on the problems created by 
privatization, negotiating a Memorandum of Agreement to guarantee 
operations of the Paducah enrichment plant through the year 2010, and 
expanding the former worker medical screening program. He helped enact 
legislation to dispose of a 50-year legacy of depleted uranium 
hexaflouride ("DUF6") at Paducah, and served as a lead House sponsor 
of the Energy Employees Occupational Illness Compensation Program Act 
("EEOICPA").  He used his perch on Energy and Commerce to track DOEï¿½s 
failures in implementing its part of EEOICPA, and then worked with the 
House Armed Services Committee to transfer the DOEï¿½s program over to 
the Department of Labor in 2004.  Most recently he joined on a bipartisan 
basis with Representative Ted Strickland in enacting legislation to 
protect the pensions and retiree health care benefits of USEC and Bechtel 
workers. This list seems long, because there has been a lot accomplished. 
Our membership thanks him and his staff for these and many other efforts.
   Today my testimony will focus on: 

   1) Ensuring that the pension and retiree health care benefit 
      continuity continue undisturbed at the Paducah site for USEC 
      workers who transfer to the DOEï¿½s cleanup contractors, and the 
      transition to the new remediation contractor is seamless; and 
   2) Continuing the DOE former worker medical screening program at 
      Paducah.

1. Pension continuity: DOE is not complying with Section 633 of the 
   Energy Policy Act of 2005
   Today, workers employed at Paducah have the right to carry pension 
service credits and vesting in retiree medical benefits from USEC to 
the cleanup contractors at Paducah and Portsmouth.  But DOE wants that 
to end. No matter the changes to employment arrangements--such as USEC 
privatization, the shift to an integrating contractor with multiple 
subcontractors, or the replacement of the Management and Operation 
contractor--pension and retiree benefit portability has been the rule 
at the Paducah Gaseous Diffusion Plant ("PGDP") throughout its 50+ 
year history.
   In 1998, Bechtel Jacobs established the Multiple Employer Pension 
Plan ("MEPP"), a defined benefit plan, to continue the practice of 
assuring pension portability at a time when employment relationships 
were changing frequently. The MEPP welcomed USEC employees who 
transitioned to DOE contractors after losing their jobs from the 
downsizing or closure of a uranium enrichment plant. The MEPP also 
enhanced employee mobility by allowing workers to move between Bechtel 
Jacobs and its various tiers of subcontractors performing work for 
the Environmental Management Program while assuring seamless pension 
portability.
   When DOE issued Requests for Proposals ("RFPs") for remediation 
and infrastructure contractors in November 2003 to replace Bechtel-Jacobs 
("BJC") at Portsmouth and Paducah, it narrowed the definition of which 
workers will be "grandfathered" and therefore eligible to participate 
or transfer into the MEPP.\\1\\  USEC workers and those BJC workers above 
first tier supervision were excluded.  These DOE changes undermined 
the enlightened social policy embodied in the MEPP: to promote and 
ensure pension/retiree medical portability. 
   Two documents govern benefit portability at Portsmouth and Paducah:

   1)  The Bechtel Jacobs Multiple Employer Pension Plan ("MEPP"). 
       This plan sets forth the definition of "Grandfathered" employees 
       covered under the plan. Grandfathered employees include hourly 
       USEC workers who were covered by a "bargaining unit transition 
       agreement" ("BUTA"). The DOEï¿½s new Infrastructure and Remediation 
       Contractors are required to become participants in the MEPP 
       within 90 days of starting work.
   2)  The Bargaining Unit Transition Agreement ("BUTA"). This allows 
       hourly workers to transition from USEC or from DOEï¿½s former 
       contractor, Lockheed Martin Energy Systems over to Bechtel Jacobs 
       and its subcontractors. This agreement, which was approved in 
       February 2000 and is in effect at Paducah today, authorizes 
       "grandfathered" hourly employees to retain their USEC pension 
       service credit and vesting in the retiree medical benefits plan.\\2\\ 

   The Bargaining Unit Transition Agreement (Section 8(c)) states: 

   "For clarification purposes, any employee who transfers from USEC 
   to Bechtel Jacobs or its first or second tier subcontractors, who 
   was employed on the date that this addendum is ratified [February 
   22, 2000] and formally concluded shall be classified as a 
   "Grandfathered Employee" without regard to the date that he or she 
   transfers from USEC to Bechtel Jacobs or its subcontractors."

   In addition there is a chart in the BUTA which spells out the 
categories of USEC workers who will be allowed to transfer pension and 
retiree health care service credit when they move from USEC to Bechtel 
Jacobs and/or its subcontractors, including: 
   1) Employees whose jobs were transitioned from USEC to Bechtel;
   2) Employees who voluntarily quit USEC and are employed by Bechtel; and
   3) Employees who are laid off and receive severance from USEC.
   The BUTA states that it is intended to be binding on successor 
contractors at Paducah. DOE does not dispute that pension portability 
has been and is in effect today. However, DOE has put in place the 
mechanics to eliminate this arrangement on a going forward basis with 
new contractors, such as Paducah Remediation Services.  It has indicated 
to cleanup and infrastructure contractors that the government will only 
reimburse a contractorï¿½s pension plan contributions for a narrow group 
of employees: those non-managerial employees of Bechtel Jacobs or its 
subcontractors who are vested participants in the MEPP at the time of 
contract transition.  Specifically excluded are pension and retiree 
benefits continuity for USEC hourly workers.
   In response to concerns about the DOEï¿½s Request for Proposals, 
Representatives Whitfield, Strickland and Portman, as well as Senators 
Bunning, McConnell, DeWine and Voinovich asked DOE to ensure that 
USEC workers could keep their pension transfer rights as DOE changed 
contractors.   Mr. Whitfield sent then-Secretary of Energy Abraham a 
December 18, 2003 letter expressing concerns about the loss of pension 
continuity. Senators McConnell and Bunning followed with a December 
19, 2003 letter. These concerns were raised in a field hearing before 
the Senate Energy Committee held here in Paducah on December 8, 2003.
   After the RFPs were issued, meetings ensued with senior DOE officials, 
questions were asked at Congressional hearings, and letters were 
written without a satisfactory response.  DOE received a detailed 
briefing showing there would be a negligible economic impact to the 
government from permitting USEC workers to retain pension continuity 
when they transfer into the MEPP.  A so-called "carve out" provision 
in the pension plan provides that the DOE contractors are only 
responsible for a pro rata allocation of liability based on an 
employeeï¿½s years of service with the cleanup contractors. USEC is 
liable for the balance.  This means workers will receive 2 pension 
checks instead of one. However, since earned benefits are effectively 
back loaded in later years as workersï¿½ earnings increase, it is 
important to keep pension service credit intact between contractors. 
   In the Spring of 2005, DOE had already announced the award of new 
contracts in Portsmouth and Paducah, but the pension portability 
issues were not resolved. Representatives Whitfield and Strickland 
attached an amendment during markup to the Energy Policy Act of 2005 
(H.R. 6). This provision codifies the benefit continuity arrangements 
at Portsmouth and Paducah that were in effect on April 1, 2005 (the 
date coincides with the committeeï¿½s deliberations) and ensures that 
USEC workers will be eligible to participate in or transfer into the 
MEPP and its related retiree medical benefit plan. 
   As signed by the President on August 8, 2005, Section 633 of the 
Energy Policy Act of 2005 (P.L.109-58) states:

   To the extent appropriations are provided in advance for this purpose 
or are otherwise available, not later than 30 days after the date of 
enactment of this paragraph, the Secretary shall take such actions as 
are necessary to ensure that any employee who--
      (A) is involved in providing infrastructure or environmental 
      remediation services at the Portsmouth, Ohio, or the Paducah, 
      Kentucky, Gaseous Diffusion Plant;
      (B) has been an employee of the Department of Energyï¿½s predecessor 
      management and integrating contractor (or its first or second tier 
      subcontractors), or of the Corporation\\3\\, at the Portsmouth, 
      Ohio,       or the Paducah, Kentucky, facility; and
      (C) was eligible as of April 1, 2005, to participate in or transfer 
      into the Multiple Employer Pension Plan or the associated multiple 
      employer retiree health care benefit plans, as defined in those 
      plans, shall continue to be eligible to participate in or transfer 
      into such pension or health care benefit plans. (emphasis added)

   This legislation obligates the Secretary of Energy to ensure that 
pension and retiree benefits rights that were in place on April 1, 2005 
for USEC and DOE contractor workers will continue to be in place for 
workers at Portsmouth and Paducah who will be performing DOE cleanup 
work. 
   DOE vigorously lobbied against this pension provision during the 
House-Senate conference during July, 2005. Having lost the legislative 
fight, DOE rewrote the legislation through a September 13, 2005 
implementation plan which excludes USEC workers (see: Attachment "A").
   DOEï¿½s plan states that employees eligible to participate in the MEPP 
are only those "who were participating in the MEPP (both vested and 
non-vested) on April 1, 2005."  This implementation plan means that 
universe of employees who will be able to participate in the MEPP and 
the related health insurance plan is much narrower than Congress had 
specified in Section 633.  It reads coverage for USEC workers right out 
of the law.
   Representatives Whitfield and Strickland challenged that 
interpretation in an October 3, 2005 letter to DOE. A January 12, 
2006, DOE response contends that USEC workers at Portsmouth and Paducah 
will not have a right to transfer their pension benefits with them when 
employed by new DOE contractors, if the DOE contractors they go to work 
for were not previously parties to a BUTA on April 1, 2005.
   This analysis ignores the purpose of the law, which was to ensure 
pension continuity for the new contractors being hired by the DOE, who, 
by definition, could never have been signatories to the Bargaining Unit 
Transition Agreements before they were hired.  DOE has chosen to 
overlook the language which confers a clear cut obligation by the 
Secretary of Energy to continue benefit eligibility. Section 633 
states:

   "the Secretary shall implement such actions as are necessary to 
   ensure that any employee who ... [was eligible to participate or 
   transfer into the MEPP and related retiree plans on April 1, 2005] 
   ... shall continue to be eligible to participate in or transferï¿½
   into such pension or health care benefit plans." 

   This language is clear: DOE has a forward looking obligation to 
continue pension continuity for all employees who had certain rights 
on April 1, 2005.  This could be accomplished by DOE allowing its new 
contractors to become signatories to the BUTA and ensuring that employer 
contributions to the benefit plans will be deemed an allowable cost.  
Nowhere does Section 633 require that new contractors had to already 
have been signatories to a BUTA back on April 1, 2005.  Even if a 
strained reading of the law could be construed this way, Congress never 
intended such an illogical result, because it knew that new contractors 
would begin work at Portsmouth and Paducah sometime after June 2005 and 
could not have been signatories at a site where they had never worked 
before.
   Using this erroneous reading of the law, DOE recently advised that 
USEC workers who transfer to the Paducah "infrastructure" contractor, 
Swift and Staley, will be able to bring their pension service credit 
with them, because Swift and Staley (coincidentally) was a signatory 
to the bargaining unit transition agreement on April 1, 2005--as a 
former subcontractor to Bechtel Jacobs.  Swift and Staley was unable 
to confirm this change in DOEï¿½s position. DOE has, heretofore, barred 
the transfer of pension service credit to Swift and Staley for USEC 
workers.
   DOEï¿½s position is that USEC employees cannot bring their service 
credit with them to Paducah Remediation Services, the new Paducah 
"remediation" contractor, because Paducah Remediation Services was 
not a signatory to the BUTA.  This disparate treatment arises out of 
DOEï¿½s misplaced reading of the law, wherein they link pension continuity 
to whether a given DOE contractor participated in the BUTA on April 1, 
2005, rather than to the plain language in 633 which links pension 
continuity to the universe of employees who had the eligibility to 
participate in or transfer into these multi employer benefit plans on 
April 1, 2005. 
   DOE wants to reduce the number of workers in its contractorsï¿½ defined 
benefits plans as part of a national pension agenda. While cutting off 
employees from defined benefit plans is an unfortunate trend in the 
private sector, it is not the governmentï¿½s job to second guess 
Congressional directives to continue such benefits.  Using a groundless 
legal position which overlooks the Secretaryï¿½s legal obligation in 
Section 633, DOE is determined to reduce their legacy pension costs by 
taking it out of the pocket of workers.
   As much as we all want the Paducah plant to remain competitive in 
the enrichment business, we are mindful of the economic challenges 
presented by rising electricity costs and the development of lower 
cost centrifuge technology.    In the short term, as USEC workers seek 
to fill available openings with the cleanup contractors, the loss in 
pension continuity is a concern--though the number of workers impacted 
will not be large. However, the possibility of further downsizing, 
coupled with the potential for future DOE decommissioning jobs, makes 
pension continuity at Paducah an imperative for a much larger number 
of workers and a precedent that should not be tampered with.
   If DOE is not prepared to comply with Section 633, Congress may 
need to take further steps to enforce compliance. Without pension 
continuity assured for USEC workers, we believe it will be difficult 
to ensure a seamless transition to the new remediation contractor.
 
2. DOE Former Worker Medical Screening Program at Paducah
   The DOEï¿½s former worker medical screening program, which is run by a 
Queens College-USW consortium, has screened 2,597 workers at Paducah 
between May 1, 1999 and December 31, 2005.  The "basic" screening 
program was expanded in November 2000-- after the discovery of 
unmonitored worker exposures to transuranics at the gaseous diffusion 
plants-- to include an Early Lung Cancer Screening Program and allowed 
current workers to participate. Using a low-dose CT spiral scanner on 
a mobile unit traveling between Portsmouth, Paducah and Oak Ridge, 
1,620 individuals have received early lung scans in Paducah and 5,829 
at the three gaseous diffusion plants.  Follow up scans have been 
provided where suspicious lung nodules are found.
   The low dose CT Spiral Scan is 4 times more likely than a chest 
X-ray to detect cancer at an early stage, and has been very popular 
with workers.  So far, the program has identified 44 cancers using 
the CT scan.  Eighty-one percent (81%) of these cancers were detected 
at Stage I, when the cancers are most operable and the chances of 
saving a life is the greatest. Preliminary results published by Cornell 
indicate that if lung cancers are detected at Stage I, there is a 
curability rate of more than 90%.  This compares with a survival rate 
of 5%-15% for those whose lung cancers are detected at Stage III.  
The results from the Queens-USW medical screening program are being 
shared with the International Early Lung Cancer Program (www.IELCAP.org).
   As participation has started to wane at the GDPs, DOE has asked that 
the early lung cancer screening program ramp down in February 2006. For 
most individuals, early lung cancer screening will not be available 
after June 1, 2006.  Current and former gaseous diffusion plant workers 
are being sent notices advising them that this their last chance for 
free early lung cancer screening. However, beginning June 1, DOE has 
budgeted resources for outreach and the continuation of the basic 
medical screening program for approximately 125 participants/year for 
the next two years (as compared with 321 in 2005.) 
   Historically, the Energy and Water Appropriations Act has contained 
language for the medical screening program as part of the budget for 
DOEï¿½s Office of Environment, Safety and Health (Defense), and a 
provision may be required in FY 07 to continue this program.

Conclusion
   The Department of Energy is in violation of Section 633 of the Energy 
Policy Act of 2005 with respect to assuring pension and retiree health 
care benefit continuity for USEC hourly workers.  If DOE is not going 
to comply with Section 633, then Congress may need to take further steps 
to ensure compliance. We hope that DOE has not made it a routine practice 
to require two acts of Congress to implement a given Congressional 
direction, as it did with the DUF6 project.  Absent a resolution of this 
issue, it will be difficult to manage a seamless transition from Bechtel 
Jacobs to the new contractor at Paducah. 
   DOEï¿½s former worker medical screening program is going to be operating 
with a smaller footprint for the next two years beginning June 1, 2006. 
Historically, appropriations legislation has secured funding for 
screening at the gaseous diffusion plants, and a provision may be 
required for FY 07.  

                              Attachment "A"
               (September 13, 2005 Implementation Plan)

                   DOE Implementation of Section 633
                   of the Energy Policy Act of 2005

*  Bechtel Jacobs Company (BJC) will continue to administer the Multiple 
   Employer Pension Plan (MEPP) and the Multiple Employer Retiree Health 
   Care Benefit Plan (MEWA) (the "Plans") for employees of the new 
   infrastructure and environmental remediation contractors at the 
   Portsmouth, Ohio, and the Paducah, Kentucky, Gaseous Diffusion Plant 
   sites who are eligible to participate in the Plans as of April 1, 2005. 

*  Employees of either BJC or its first-tier and second-tier 
   subcontractors who were participating in the MEPP (both vested and 
   non-vested) on April 1, 2005, will continue to be eligible to 
   participate in the MEPP, provided that they: (1) are employed by one 
   of the new infrastructure or environmental remediation contractors; 
   and (2) continue to meet the criteria for the definition of a 
   "Grandfathered Employee" in the MEPP.

*  Employees of either BJC or its first-tier and second-tier subcontractors 
   who were participating in the MEWA on April 1, 2005, will continue to be 
   eligible to participate in the MEWA provided that they: (1) are employed 
   by one of the new infrastructure or environmental remediation 
   contractors, and (2) continue to meet the criteria for the definition 
   of a "Grandfathered Employee" in the MEWA.

*  BJC has submitted draft language to amend the MEPP and MEWA to the 
   Contracting Officers for the new contracts for approval of the language 
   and the costs associated with amending the Plans.  The proposed 
   amendments provide for the new contractorsï¿½ participation as Plan 
   sponsors.  DOE is reviewing the language of the proposed amendments 
   to ensure that employees eligible to participate in the Plans as of 
   April 1, 2005, retain their eligibility.  DOE anticipates approval 
   of the draft language in the near future.

   MR. WHITFIELD.  I tell you what, I would love to get that speech from 
you.
   We should have asked Mr. Ervin to come up and ask some questions to 
Mr. Rispoli.
   [Laughter.]
   MR. WHITFIELD.  I thank all of you for your testimony.  It was very 
good, and there are so many important issues.  We genuinely appreciate 
that.
   Mr. Ervin, let me ask you this question, weï¿½re hopeful that DOE will 
reverse their position on this issue, and if not, then maybe we will 
be required to pursue some additional legislation.  But I was curious, 
have you all considered a lawsuit on this issue?
   I do know we live in a litigious society, and I donï¿½t like to 
recommend lawsuits, but I was just curious if you all have discussed it.
   MR. ERVIN.  There has been some discussions both with myself and 
the president of the local at the Portsmouth plant.
   MR. WHITFIELD.  And I know that Mr. Miller here is an attorney 
himself.  Are you, Mr. Miller?
   MR. MILLER.  No, sir, Iï¿½m not.
   MR. WHITFIELD.  Well, Iï¿½ve talked to you so many times that when 
I leave you, my headï¿½s usually spinning, so I assumed you were.
   [Laughter.]
   MR. WHITFIELD.  But from your knowledge of this language in this 
Energy Policy Act, thereï¿½s not anything vague about that language is 
there?
   MR. MILLER.  Sir, I think both the legislation which makes it very 
clear that there is a forward-looking obligation and particularly -- 
just not to restate what the law is -- because the law is what it is.  
Presumably, youï¿½ll put a copy of this in the record so that anyone 
who looks at it can see it.
   But it makes it very clear that the Secretary shall implement such 
actions as are necessary to ensure that employees who were eligible 
shall continue to be eligible to participate or transfer into such 
pension plan or health care benefit plan.  I donï¿½t know whatï¿½s 
ambiguous about this.
   Now, whether the Secretary, as Mr. Ervin pointed out, is simply 
just deciding to fix his legal position around a national preordained 
pension agenda or not, I donï¿½t know, but Mr. Rispoli certainly led us 
to believe, well, we have to consider our legal position in the context 
of our national pension policy plan.  Well, I donï¿½t know that he has 
that liberty to do that.  I thought Congress enacted the laws and that 
the Administration was supposed to follow them.
   So I think itï¿½s pretty clear.  The report language is pretty clear.  
I think the real sticking point is that the people who lost the 
legislative fight arenï¿½t prepared to say, "Okay.  Weï¿½re ready to move 
on and comply with the Congressional directive."  And I think itï¿½s 
pretty clear.
   MR. WHITFIELD.  Well, it has been totally baffling to us, because 
it is very clear, the report language was very clear.
   And, Mr. Ervin, thank you again for your testimony.
   MR. ERVIN.  Thank you.
   MR. MILLER.  Mr. Whitfield, if I could just follow up on one other 
point, that maybe if DOE could be considered just rethinking this issue 
one more time, as you suggested, there might be one thing theyï¿½ve 
overlooked, and that is that the Bargaining Unit Transition Agreement 
that is in place on April 1st had a clause in it which said it is 
intended to be binding on successors, upon future contractors that 
come to the site.
   And maybe their lawyers overlooked that and could reconsider that 
in their re-evaluation so we wouldnï¿½t have to go down this road any 
further.
   MR. WHITFIELD.  Well, weï¿½ve had a number of meetings with them, 
and weï¿½re going to be having more.  So thank you for that suggestion.
   Mr. Hughes, your contract, youï¿½ve testified, expires on April 23rd 
of 2006.  When do you actually leave, and when does Paducah Remediation 
Services actually take over?
   MR. HUGHES.  We will leave on that day.  And in the case of 
Portsmouth, actually we left sometime after that, because there was 
some things that the subcontractors or the new, I should say, the 
new prime contractors needed some additional help with.  And working 
with the Department of Energy, we agreed to continue to provide that 
help with them until they could fully get up and operate on their own.
   So the intent is to be completed in April and be off, but -- if it 
takes a little longer -- weï¿½ll continue to help them.  I should say 
that in the transition itself, I believe why these have been so 
successful is the transition is starting immediately, and the 
transition, as I mentioned in my testimony there, we treat it like 
we treat a project.
   Thereï¿½s a detailed schedule for that transition.  Thereï¿½s over 
400 elements associated with the transition.  We have a full-time 
project transition manager assigned to manage just that, while we 
also have a full-time project manager that will continue to focus on 
the operations piece so that we donï¿½t get distracted.
   So the turnover, those 400 elements, some of those will get turned 
over and completed quicker with the intent to complete them all by 
that date so that we can move on.  So far itï¿½s worked very well, I 
believe, in the previous transitions, and thatï¿½s our commitment, to 
make sure it works well on this one, too, so that they donï¿½t miss a 
beat in the process.
   MR. WHITFIELD.  Now, Bechtel Jacobs has a contract, separate 
contract, with the government to implement or administer the Multiple 
Employer Pension Plan program.
   When does that contract expire?
   MR. HUGHES.  Thatï¿½s true, Mr. Chairman.  That contract is part of 
our overall contract where weï¿½re operating down at Oak Ridge as the 
accelerated cleanup contract.  It currently expires, that is supposed 
to be up in September of 2008.  And under that contract, thatï¿½s the 
mechanism by which we will continue to manage both the pension and 
benefits at Portsmouth and Paducah.
   MR. WHITFIELD.  Have you or your attorneys at Bechtel Jacobs 
looked at Section 633 and come to any conclusions, or do you feel 
like you canï¿½t talk about that?  
   [Laughter.]
   MR. HUGHES.  What I heard you say, Mr. Chairman, and also, Assistant 
Secretary Rispoli, is that there has been a letter response from the 
Department.  You are going to look at that in more detail.  The 
Departmentï¿½s looking at that currently.  And as part of that, we need 
to have the opportunity to also look at that.  We have not taken a 
look at the legislation and tried to do our own analysis.  I donï¿½t 
think thatï¿½s appropriate to do right now.
   But we certainly will help or support or review that as part of 
trying to sort this out, if needed.  I havenï¿½t had a chance to do any 
of that yet.
   MR. WHITFIELD.  Judge Orazine, you mentioned this payment in lieu 
of taxes, and it was my understanding that in the agreement that USEC 
had in leasing this property from the government that they had agreed 
to pay taxes.
   Is that your understanding?
   JUDGE ORAZINE.  Looking at copies of the Privatization Act now, it 
looks like theyï¿½re directed to pay property taxes or in lieu of taxes.  
But as you say, we may have to get some lawyers to determine that.  
But we do not receive anything from USEC or DOE.
   MR. WHITFIELD.  You havenï¿½t received any checks at all.
   JUDGE ORAZINE.  Not for property or in lieu of property taxes.
   MR. WHITFIELD.  But I think it is set out in there, I thought.  I 
donï¿½t want to leave this hearing and everybody filing lawsuits against 
everybody.
   [Laughter.]
   JUDGE ORAZINE.  Mr. Chairman, I did have one other comment that I 
neglected to make.  It wasnï¿½t in my written statements.
   But I heard Congressman Stupak ask Mr. Rispoli talk about the 
contract with Bechtel Jacobs, and we worked well with them.  But the 
length of the new contract, I think, is three or three and a half 
years, and we would much rather see a longer contract, because he 
talked about 400 issues in the transition.  Thereï¿½s just an awful 
lot of work and time lost in the changing of these companies and the 
new contracts.  Itï¿½s been kind of regrettable.
   MR. WHITFIELD.  You and Mayor Paxton both placed a great deal of 
emphasis on economic development.  You both talked about 
reindustrialization, and we all talked about the fact that Oak Ridge 
has DOE employees there for that explicit purpose.  And you referred 
to this letter of December 14th that you all wrote to me in which you 
were asking that we try to obtain an appropriation for 2007 of $150,000 --
   JUDGE ORAZINE.  Correct.
   MR. WHITFIELD.  -- for a person at this location for that purpose.  
And as I said, I mean, if Oak Ridge, if theyï¿½re going to have people 
paid for at government expense for this, then we most certainly should.
   Now, as you know, for the last five, six, seven years, weï¿½ve had 
the CRO here that has helped in that.  They have been involved in a 
number of efforts, including some spec buildings, including all sorts 
of things, and I want to commend Mr. Anderson and others who have been 
involved in that.
   As you know, in 2006, there was not any appropriation for the CRO.  
And that doesnï¿½t reflect about whatï¿½s going on in Paducah, that is 
nationwide, and basically they just shut down the funding for that.
   But if we are successful in getting $150,000 or so to get some 
government employees under the Department of Energy working on this 
issue, are you all still going to make an effort to obtain funding 
for the CRO, or do you feel like that, I mean, Iï¿½m not optimistic that 
weï¿½re going to be very successful in that, but it seems like you might 
be moving in two different directions here.
   JUDGE ORAZINE.  The Mayor and I talked about, you know, the loss 
of the CRO, especially the funding.  I mean, we talked about setting 
up a task force, and we also talked about maybe hiring or putting some 
money together.
   You want to relate to that?
MR. PAXTON.  Well, we understand, Mr. Chairman, that CRO is no longer 
functioning.  Itï¿½s impossible for the Judge and I to stay on top of 
all the issues that are going on out at the plant.  We realize that.  
So if the CRO is not going to be the vehicle, then maybe we need to 
set up some other vehicle.
   And if youï¿½ll remember, we did set up a task force with the centrifuge 
plant.  Mr. Ken Wheeler was the Chairman, and whether it is you, whether 
it is Senator McConnell, or Senator Bunning, or the Governor or whoever 
had a question about the centrifuge plant in Paducah, Kentucky, they 
knew to call Mr. Wheeler and he would address it.
   So maybe we need to bring new people that are well respected by our 
delegation, by our Governor, who we meet with on a regular basis that 
can give us ideas on how we can be more successful, because hereï¿½s 
what we want.  We want to continue the cleanup while the plant is open, 
like is going on now.  We want the plant to stay open as long as we 
possibly can keep it open.  Once it closes, we want to ratchet up the 
cleanup and, as soon as possible, make that area available for 
reindustrialization.
   I was talking to Congressman Stupak today and told him thereï¿½s 4,000 
acres out there.  Maybe half of that could be a nature preserve, and 
part of it could be an industrial park.  Right next to our airport, 
itï¿½s a wonderful site.
   So weï¿½re interested in getting this cleanup accomplished as soon 
as we possibly can.  We donï¿½t want DOE constantly in here.  Although 
we love the money thatï¿½s coming in and itï¿½s very beneficial, we want 
it cleaned up.  We want our property so we can create jobs and more 
opportunities.
   MR. WHITFIELD.  Thank you.
   MR. STUPAK.  I know Iï¿½m from up north, but whatï¿½s CRO?  
   JUDGE ORAZINE.  Community Reuse Organization.
   MR. STUPAK.  Is that just confined to Paducah then?  
   JUDGE ORAZINE.  No.  They were set up, I donï¿½t know how many years 
ago.  We kind of got in on the tail end of it.  Itï¿½s been very 
beneficial for our community.  They focused on cleanup issues, the 
assets out there.  They had a pretty broad agenda, but theyï¿½ve been 
very useful.  And the money that come through CRO weï¿½ve used for 
economic development.  I mean, they have funds that weï¿½ve built spec 
buildings and other such things, industrial parks.
   MR. PAXTON.  It was very successful throughout the country for 
many, many years, but Congress decided no longer to fund it.  And we 
got in, like the Judge said, on the tail end of this thing.  It was 
successful for a few years, but now itï¿½s no longer successful.  So 
weï¿½ve got to look for new ways to make things happen.
   MR. WHITFIELD.  Well, Mr. Stupak, any questions you want.
   MR. STUPAK.  Thanks, Mr. Chairman.
   Mr. Hughes, getting back to the pension, youï¿½re going to be 
administering it until September ï¿½08, correct?  
   MR. HUGHES.  Thatï¿½s correct.
   MR. STUPAK.  So who determines if employees are eligible, then, 
to participate in that pension between now and September of ï¿½08?  You 
or DOE?
   MR. HUGHES.  Well, we carry out the responsibility of looking at 
each potential eligible employee based on the guidelines that are 
established.  So, you know, it would be our responsibility that if 
somebody were to be hired in, weï¿½d look at our guidelines, look if 
they meet this qualification, such as grandfathered, and then we would 
review whether they would be eligible or not eligible under that.
   MR. STUPAK.  So you wouldnï¿½t have to get permission from DOE?  
   MR. HUGHES. We would go back to DOE under certain circumstances 
and ask them if there was a need to, like in this situation, weï¿½d wait 
until they make a determination based on the contractor.
   MR. STUPAK.  How many years do you have to have before youï¿½re vested 
in this pension system?  
   MR. HUGHES.  I donï¿½t know the answer to that.
   MR. STUPAK.  Okay.
   MR. HUGHES.  Iï¿½m sure weï¿½ve got that.
   MR. STUPAK.  Mr. Miller.
   MR. MILLER.  Five years.
   MR. STUPAK.  Five years.
   Are there any other -- besides five years, any other guidelines 
you could give us to determine whether or not an employee would be 
vested or be able to participate between now and September ï¿½08?
   MR. HUGHES.  There are specific guidelines, and instead of me just 
saying those, I can provide those to you.  Iï¿½d like to provide those 
to you in writing instead of just saying what they are here off the top.
   Would you like that to be done?
   MR. STUPAK.  Yes, please.
   MR. HUGHES.  Okay.  Iï¿½ll do that.
   MR. STUPAK.  You know, after we wrote the law in the Energy Conference 
Report, which I was part of, did we -- did you get any new guidance 
from DOE, then, based on Section 633 that we should do something 
different.
   Youï¿½ve got your pension system has not received any new guidance 
or guidelines?
   MR. HUGHES.  Iï¿½m not aware that we received any guidelines, but 
weï¿½re waiting for the interpretation of that legislation.
   MR. STUPAK.  So theyï¿½re coming probably.
   Mr. Hughes, I mentioned earlier this memorandum of September 30th, 
and I asked the Assistant Secretary about this phosgene that was first 
noted in October of 2002.  It indicated that -- on the second page -- 
that we spoke with management officials for the conversion facility 
who agreed with potential safety concerns.  The official advised us 
that the contractor operating the conversion facility had not been 
told by DOE to expect phosgene or fluorophosgene in the cylinders.
   Was anyone from your company aware of phosgene from October of 
2000 until recently?  Do you know?
   MR. HUGHES.  Unfortunately, I wasnï¿½t here, either, at that point 
in time.  So I donï¿½t know what knowledge there was, Iï¿½ll say, 
specifically within Bechtel Jacobs for our responsibility of managing 
the cylinders themselves.
   However, I will say once we were made aware of the situation from 
the alert, we immediately took action, as was noted earlier, to ensure 
that we based all the information that was provided by the IG, that 
we knew what the potential was, what to do, and we took action to make 
sure that we understood and communicated that to all parties.
   MR. STUPAK.  But the alert is dated September 30th, 2005.
   MR. HUGHES.  Correct.
   MR. STUPAK.  So from that point forward, I understand you have been 
very active in getting this resolved.  Until then, you probably had 
no knowledge of the phosgene?
   Because it says here not to tell DOE -- had not told by DOE.
   MR. HUGHES.  I canï¿½t go back to the 2000 and 2002.
   MR. STUPAK.  Sure.
   MR. HUGHES.  But we were actively working with the IG as they were 
doing their investigation.
   MR. STUPAK.  Do you know what time frame?  
   MR. HUGHES.  It was -- Iï¿½ll just say from September back -- I donï¿½t 
remember how long their investigation went on.  But as they initiated 
this, we cooperated with them.  We also, as part of that, were interested 
in pulling records, reviewing things.  So we didnï¿½t wait until that 
alert came out to make folks at least knowledgeable of that within our 
own working group and that we were responsible for managing that.  
Thereï¿½s a potential there.
   MR. STUPAK.  Sure.
   MR. HUGHES.  I think once the alert came out, the IG felt they had 
enough information to at least issue that.  We then more formally went 
into taking action on this.
   MR. STUPAK.  Mr. Ervin, would the union know anything about this, 
the phosgene?  
   MR. ERVIN.  As I understand it, the only notice that we received 
was when we read "The Courier Journal" article.
   MR. STUPAK.  And that was recently?
   MR. ERVIN.  Yes.
   MR. STUPAK.  Would this discovery of phosgene being available as 
early as 2000, would that lead to more credence to have more testing?
   You testified that your funding for testing -- the cancer 
testing/screening runs out in ï¿½06.  Based upon this information, would 
that cause you concern on behalf of the health and safety of your 
workers that maybe we should continue testing, especially with the 
idea of phosgene being around?
   MR. ERVIN.  Absolutely.  Itï¿½s an additional hazardous element thatï¿½s 
now been discovered in our work environment.
   MR. STUPAK.  Okay.  Mr. Ervin, if I may, how many USEC employees 
do you think might transition over to the new cleanup contractor where 
these pension issues are?
   MR. ERVIN.  I donï¿½t have any employment figures right now.  There 
are 159 workers currently employed by Bechtel and Weskem.
   MR. STUPAK.  Okay.  So by that answer then, the 159, do you mean 
thatï¿½s 159 former USEC employees?
   MR. ERVIN.  No, sir.  Thereï¿½s 159 employees currently employed by 
Bechtel Jacobs and Weskem, their subcontractor.
   MR. STUPAK.  Okay.
   MR. ERVIN.  Weï¿½ve not had any contact as of yet with Paducah 
Remediation Services.  We donï¿½t know what their employment target 
levels are or what might become available after they take over.
   MR. STUPAK.  Okay.  Judge or Mayor either one, you have this CRO 
here, Community Reuse, but do you specifically, McCracken County or 
Paducah, do you have a local reuse authority specifically assigned 
to the Paducah Gaseous Diffusion Plant site?
   JUDGE ORAZINE.  Well, thatï¿½s primarily what the CRO did.  They 
worked on reuse of it.  And the moneys that were appropriated to the 
CRO, they tried to utilize those for the entire community.  It went 
outside of McCracken County, because it was based on --
   MR. STUPAK.  Sure.
   JUDGE ORAZINE.  They would loan money for, like, spec buildings 
based on how many employees you had there.  We even went over into 
Southern Illinois.  So it was a great benefit to us.
   Does that answer your question?
   MR. STUPAK.  Reuse based -- Iï¿½m more familiar with military base 
reuse, and we had some in my district where we actually had the local 
units of government be the reuse authority.  Move the Federal government 
out and move the state out, and once we had local people making local 
decisions as to what should occur on the property, it was much easier 
and much more successful.
   And we had a base reuse fund, much like your CRO, that we could 
tap into for certain aspects.  That has also expired.  Weï¿½ve also 
decommissioned a nuclear power plant in my district in which cleanup 
remediation has gone through.  And, again, weï¿½ve had local reuse 
people.  The Mayor may be on there, a doctor may be on there, a teacher 
may be on there.
   But weï¿½ve just found that when youï¿½re trying to reuse an area that 
was controlled by a larger governmental unit -- in this case, the Federal 
government -- it always went better, because instead of having the 
Federal government or state people make the decision, the local people 
made the decision, and it was much more successful.  Thatï¿½s why I asked 
that question, and thatï¿½s why I want to know about the CRO.  I figure 
it was along that line.
   The Secretary said in his testimony in the questions I asked that 
he would be willing to work in a partnership.  Has that been occurring?
   You mentioned you had to go to Federal court to do that or something 
to get some kind of feedback into whatï¿½s going on.  Has there been a 
good working relationship with DOE on reuse of this property?
   JUDGE ORAZINE.  Weï¿½ve had a very good relationship with DOE, and 
weï¿½ve tried to assist them when theyï¿½ve had issues with the EPA or 
the State on their permits, things like that.  You know, if it took 
some kind of political muscle, if you want to call it, we would try to 
help them on issues, and we even had the task force to try to keep the 
local elected officials, you know, focused on this.
   When the Mayor and I leave a meeting, you know, there are alligators 
that get a hold of us and our attention.  So weï¿½ve used our task force 
on cleanup issues.  And thatï¿½s why we --
   MR. STUPAK.  I didnï¿½t think you had alligators this far north.
   [Laughter.]
   JUDGE ORAZINE.  Well, theyï¿½re not very big, but there is a hell of 
a lot of them.
   MR. STUPAK.  On this 4,000 acres, Mayor, that you mentioned, have 
you approached DOE and said, "Look, youï¿½re not using X amount.  Let 
us start using it now for an industrial park or reuse or conservancy 
or whatever."
   MR. PAXTON.  Well, the problem with that is that we donï¿½t know what 
part of that is clean and what part of it is not clean.  So at this 
particular time, I donï¿½t believe that DOE is capable of allowing us 
to use part of that.  If theyï¿½re aware of an area that is available 
for economic development use out there, Iï¿½m not aware of it.
   And, you know, we have a great relationship with Bill Murphie.  
Bill Murphieï¿½s located in Lexington and is doing a good job.  But my 
understanding is that the whole area is going to have to be cleaned 
up.  Thereï¿½s water contamination, underground contamination.
   MR. STUPAK.  Sure.  But not all the 4,000 acres are being used, 
right?  
   MR. PAXTON.  No.
   MR. STUPAK.  So why would DOE not want to hand over some of that 
if you want to start development of it?  
   You in your testimony here on page six said, "Pursuant to that 
decision, local governments must be allowed to participate in the 
planning and selection of a remedy.  How does the community help 
determine cleanup priority?"  I think you have to be at the table now 
as opposed to later --
   MR. PAXTON.  Absolutely.
   MR. STUPAK.  -- to get these things cleaned up.
   MR. PAXTON.  Absolutely.
   JUDGE ORAZINE.  Excuse me.  Go ahead.
   MR. STUPAK.  Go ahead.
   JUDGE ORAZINE.  To personally answer your question about being 
involved with DOE maybe more as a community, had we got involved in 
the CRO several years ago and progressed, we probably would have 
gone that way.
   MR. STUPAK.  Well, when you speak of cleanup, if you donï¿½t know 
who the tenant of the propertyï¿½s going to be and what the use of that 
propertyï¿½s going to be, you donï¿½t know what degree it has to be cleaned 
up to.
   JUDGE ORAZINE.  True.
   MR. STUPAK.  You know, thereï¿½s Brownfield moneys out there to take 
it.  If itï¿½s going to be a school, itï¿½s probably going to have to be 
cleaned up extremely well.  But if itï¿½s going to be a manufacturing 
site, maybe not.
   But I know you mentioned something about putting an industrial park 
in.  So until you know the use or potential use of that property, how 
do you determine the degree of cleanup?  And thatï¿½s where I think the 
local folks have to get involved.
   MR. PAXTON.  Thatï¿½s exactly right.  And Iï¿½m not sure that anybody 
really knows that can articulate that to us.  What is the degree that 
the cleanup is going to be?  Is it going to be adequate for economic 
development, or is it not?  Weï¿½re having a hard time getting the answer 
to that.
   MR. STUPAK.  But under CERCLA, you should have those answers.
   MR. PAXTON.  Absolutely.
   MR. STUPAK.  There is a standard there, and I think itï¿½s been set 
in other areas.  And Iï¿½m sure DOEï¿½s going to say, "Well, I want to 
clean it up to CERCLA standard, but if we did this with it, then we 
wonï¿½t have to clean up that far."
   MR. PAXTON.  Right.
   MR. STUPAK.  What Iï¿½m saying, donï¿½t let DOE make that decision.  
Your communities have to make that decision.
   MR. PAXTON.  Absolutely.
   MR. STUPAK.  And you mentioned something about hand wringing in 
your opening statement.  In my short time in this community, thereï¿½s 
not been any hand wringing by any local officials or your Congressmen.  
Youï¿½ve done a great job here.  This is a great booming community.
   MR. PAXTON.  Thank you.
   MR. STUPAK.  And youï¿½ve got a real potential redevelopment site, 
and I just urge you to do everything you can to get that decision-making 
away from DOE and put it in the local hands.
   MR. PAXTON.  I think that is why weï¿½re so interested in the contract 
for the cleanup.  Weï¿½ve had an excellent relationship with Bechtel 
Jacobs.  We thought that North Wind was going to get the new contract.  
There was a challenge.  And so weï¿½re excited, and what we want is the 
new contractor to hit the ground running and start working.
   We want the contract to be long enough to where they can accomplish 
something, and letï¿½s get this place cleaned up.  We know that only a 
limited amount can be done until the plant closes.  But then after the 
plant closes, they can shift into high gear, and weï¿½ll get that cleaned 
up and we can move forward.
   MR. STUPAK.  No doubt.  Go ahead, Judge.
   JUDGE ORAZINE.  I hate to keep interrupting.  Thatï¿½s one of the 
reasons why weï¿½re so focused on the nickel assets.  With the CRO funding 
now gone, they still have some moneys that they can loan out on spec 
buildings and things, but itï¿½s going to phase out.
   But if we had the nickel assets, we wouldnï¿½t put that in the general 
budget.  Now, we would the payment in lieu of taxes, because thatï¿½s 
for county services.  But the nickel assets, if we could realize some 
dollars off of that, we could use that for people like weï¿½re talking 
about, reindustrialization.
   Weï¿½d be glad to, I mean, but we donï¿½t have the funds of that magnitude 
to hire a staff just from the city and the county to work on those 
issues.  We just donï¿½t have it.
   MR. STUPAK.  Well, youï¿½ve got a Congressman here who does pretty 
good finding you funds, so I wouldnï¿½t worry too much about that.
   JUDGE ORAZINE.  Amen to that.
   MR. STUPAK.  Mr. Hughes, I just want to say thanks.  It looks like 
Bechtel has done really a pretty good job as far as to not have that 
in the contract.  And a three-and-a-half-year contract, this all would 
have took -- 18 months or so of goofing around with contracts just 
trying to get a bid has probably slowed down the process.  And if itï¿½s 
only a three-and-a-half-year contract that the new people have, I think 
itï¿½s just going to continue to slow us down.
   MR. HUGHES.  I appreciate that.  And weï¿½re going to do everything 
to make sure that this new contractor coming in, just like we did at 
Portsmouth, fully hits the ground running and they donï¿½t miss any beats.  
And with the Department of Energy, weï¿½ve been, you know, working for 
them, weï¿½ve been very proud to be part of this.
   And even during this time of uncertainty here, I think you heard 
the Undersecretary, or Assistant Secretary say and I think the rest 
would say we kept things moving at a good pace so that for the moneys 
that were put in from Congress that there were results shown back.  
And weï¿½re pretty proud of that, actually very proud of that.  Weï¿½re 
going to make sure that this new prime subcontractor is, or contractor 
is, successful, and weï¿½ll help them get fully up to gear.
   MR. STUPAK.  Nothing further, Mr. Chairman.  Thank you.
   MR. WHITFIELD.  Well, Congressman Stupak, I want to thank you once 
again for taking the time to be with us today.  We value your input.
   And, Edith, thank you for coming.
   I want to thank all of the witnesses and for those who attended 
todayï¿½s hearing.
   Mayor, you and Judge Orazine have provided great leadership.  And 
speaking on behalf of those in Washington, we may not always agree on 
all of these issues, obviously, but I do think we have a good working 
relationship, and weï¿½ve been truthful with each other.  I think if you 
can do that, you can make great progress.
   Mr. Hughes, we genuinely appreciate the great job of Bechtel Jacobs, 
and I think you all have done a fantastic job and look forward to 
working with you.
   Mr. Ervin, congratulations on being selected as the new President 
of the Local Steel Workers.  I look forward to working with you.
   Richard Miller, thank you once again, and I wanted to thank you 
for mentioning Karen Long.  Karen Long, although she wonï¿½t be 40 for, 
I guess, another month or two, has worked on Capitol Hill for 30 years, 
and sheï¿½s been my Chief of Staff since the day I was elected to 
Congress.  She was the first person I hired.  She told me once that 
she knew nothing about the Paducah Gaseous Diffusion Plant, and she 
knows a lot more now than she ever wanted to.  So weï¿½re going to miss 
her.
   And, Karen, thank you for everything you did.
   MS. LONG.  Thank you.  I appreciate it.
   MR. WHITFIELD.  And we have a lot of issues affecting this community 
and this plant.  Weï¿½re going to remain focused on it.  We touched on 
many of them today.
   And with that, weï¿½ll adjourn the hearing.  Thank you.
   [Whereupon, at 12:10 p.m., the subcommittee was adjourned.]
   [Additional material submitted for the record follows:]
   
   RESPONSES FOR THE RECORD SUBMITTED BY ROB ERVIN, PRESIDENT, UNITED STEEL 
                     WORKERS LOCAL 5-550
   
                     February 16, 2006
   
  Questions from the Honorable Bart Stupak. Ranking Member of the Subcommittee 
                on Oversight and Investigations.
   
Question 1. What is the basis for your conclusion that early lung cancer 
               screening using a low dose CT scan will extend life 
               expectancy of nuclear weapons plant workers?
   
Answer to Congressman Stupak:      
            According to medical studies, the low dose Spiral CT Scan 
            is four times more likely than a chest X-ray to detect cancer 
            at an early stage. Currently, the program has identified 44 
            cancers of which 81% were detected in the first stage. 
            Results published by Cornell University indicate that if 
            lung cancers are detected during Stage I, there is a 
            curability rate of more than 90%. This compares to a 
            survival rate of only 5% - 15% for those cancers detected 
            at Stage III.
   
Question 2. How many USEC workers at the Paducah Plant have been affected 
            by the lack of pension portability at the Paducah Plant? How 
            many at the Portsmouth site?
   
Answer to Congressman Stupak: 
            There are currently 545 USEC Bargaining Unit employees at 
            the Paducah Plant. Of those 545 employees, approximately 
            480 employees would be affected by the lack of pension 
            portability if they were to transition to D.O.E. contractors 
            performing Infrastructure and Remediation activities at 
            Paducah.  The remaining USEC employees do not qualify as 
            "Grandfathered" employees and therefore are not eligible 
            for, or affected by, pension portability.
   
            There are approximately 600 USEC Bargaining Unit employees 
            at the Portsmouth site.  Approximately 130 are currently 
            affected by the lack of pension portability, and 460 
            additional employees would be affected if they were to 
            transition to D.O.E. contractors performing Infrastructure 
            and Remediation activities at the Portsmouth site. The 
            remaining employees do not qualify as "Grandfathered" 
            employees and therefore are not eligible for, or affected 
            by, pension portability. 
   
                              Respectfully submitted,
                              
                              
                              Rob Ervin
                              




RESPONSES FOR THE RECORD SUBMITTED BY MICHAEL C. HUGHES, PRESIDENT, BECHTEL 
                             JACOBS, LLC


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        RESPONSES FOR THE RECORD SUBMITTED BY JAMES A. RISPOLI, ASSISTANT 
        SECRETARY FOR ENVIRONMENTAL MANAGEMENT, U.S. DEPARTMENT OF ENERGY

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                     QUESTION FROM CONGRESSMAN STUPAK

Q1.     A year ago, the Department of Energy (DOE) awarded a $303 million 
clean-up contract for the Paducah site to a consortium headed by North 
Wind, a minority-owned business.  A losing bidder protested that 
contract, and DOE re-bid the work.  Eleven months later, DOE awarded 
a $191 million clean-up contract for the Paducah site to another minority 
consortium led by Portage Environmental Services.  Please explain the 
difference in the size of these two contracts.  Was the $112 million 
difference between the two contracts because of work completed by 
Bechtel, the previous clean-up contractor, during those eleven months, 
was the scope of the contract reduced, or was there another reason? 

A1.    The reason for the difference is three-fold:  1) the original 
contract period of performance was for approximately five years and 
the most recent contract period of performance is reduced to three 
and a half-years based on maintaining the original September 30, 2009, 
contract end date; 2) the scope or work changed based on progress and 
accomplishments on the Paducah project by Bechtel Jacobs while the 
competition was on-going; and 3) the  Management of Uranium Cylinders 
scope was transitioned directly to the receiving contractor (Uranium 
Disposition Services).  The original remediation contract included 
managing the cylinders on an interim basis.

                   QUESTION FROM CONGRESSMAN STUPAK

Q2.    DOE has determined that Section 633 of the Energy Policy Act 
of 2005, which was designed to protect and maintain the full pension 
and medical benefits of eligible former USEC Inc. employees who were 
later employed by DOE contractors and the Paducah and Portsmouth sites, 
is a basis for denying them those benefits.  What documents did DOE use 
in its attempt to ascertain Congressional intent behind Section 633 
of the 2005 Act prior to drafting its letter of January 12, 2006?

A2.   The document relied upon was the text of section 633 itself.  
That text clearly defined the transfer eligibility in question, and 
our analysis was governed by the statutory text enacted by Congress.  
In considering this matter, we carefully considered the analysis 
presented in the October 3, 2005, letter from Congressmen Whitfield 
and Strickland on this subject.

                   QUESTION FROM CONGRESSMAN STUPAK

Q3.    DOE referenced the Bargaining Unit Transition Agreement (BUTA) 
in its January 12, 2006, letter to Chairman Whitfield and Representative 
Strickland and stated that employees of contractors not parties to the 
BUTA could not transfer into the Multi- Employer Pension Plan (MEPP) 
and retain their pension credits. The terms of the BUTA, however, which 
were approved by DOE prior to its signature by Bechtel Jacobs and the 
unions, include a provision that states that such BUTA "is meant to 
be binding upon any successor contractor at this facility."  Has DOE 
required its successor contractors at Paducah and Portsmouth to honor 
this successorship provision?  If DOE requires its contractors to honor 
this provision, how does this affect DOEï¿½s legal analysis of which 
workers are eligible for the MEPP?

A3.    The quoted text from the Bargaining Unit Transition Agreement 
(BUTAs) reflects that a successor employer may decide to adopt its 
predecessorï¿½s Collective Bargaining Agreement (CBA).  However, the 
Department of Energy (DOE) has the right to approve CBAs as appropriate.  
DOE has not chosen to require the Paducah and Portsmouth successor 
contractors to adopt their predecessorsï¿½ CBAs, which include the BUTAs.   
This circumstance does not affect the DOEï¿½s determination of what 
section 633 requires.

                    QUESTION FROM CONGRESSMAN STUPAK

Q4.    You testified at the hearing that workers formerly employed 
by USEC have the right to transfer into the MEPP if Swift and Staley 
at Paducah subsequently employ them, as Swift and Staley was an eligible 
subcontractor on April 1, 2005.  Your statement was similar to that 
in a January 12, 2006, letter to Chairman Whitfield and Representative 
Strickland from Eric Fygi, DOEï¿½s deputy counsel.  However, according 
to the written testimony of Rob Ervin, President of the United 
Steelworkers Local 5-550, DOE has not advised Swift and Staley in 
writing of this decision so that the costs of the MEPP for those 
employees are deemed allowable costs. 
       Do you agree that former USEC employees who are hired by Swift 
and Staley are eligible to transfer into the MEPP if they meet all 
other eligibility requirements?  Has DOE communicated this position 
to Swift and Staley so that pension costs for these employees are 
deemed allowable costs?  Is so, please provide a copy of that 
communications.  If not, please explain why this position has not 
been communicated 

A4.    The Department of Energy (DOE) agrees that United States 
Enrichment Corporation (USEC) workers who are members of the United 
Steelworkers of America and who are hired by Swift and Staley 
Mechanical Contractors, Inc., (S&S) will be eligible to transfer 
into the Multiple Employer Pension Plan (MEPP) if they meet all 
other Plan eligibility requirements.  This is because S&S had been 
a subcontractor to the Bechtel Jacobs Company (BJC) prior to being 
awarded the contract to provide infrastructure services at Paducah 
and was a signatory to a Collective Bargaining Agreement (CBA) that 
allowed USEC employees who were hired by BJC or a first- or second-tier 
subcontractor to transfer into the MEPP.  S&S and USW have signed a 
one-year extension to the CBA, although the CBA as extended no longer 
gives USEC employees the right to bump S&S employees and be hired by 
S&S.  While the DOE has not provided written direction to S&S on this 
issue, S&S has confirmed to the Portsmouth Paducah Project Office that 
it understands that if S&S hires USEC employees who are covered by the 
CBA and otherwise meet MEPP eligibility requirements, the related costs 
would be allowable if consistent with the Federal acquisition regulations 
governing the allowability of costs.

                   QUESTION FROM CONGRESSMAN STUPAK

Q5.    How many former USEC workers at the Portsmouth, Ohio, site are 
affected by DOEï¿½s decision to refuse to allow those workers to transfer 
to Theta Pro2 Serve Management Company (TPMC) and Los Alamos Technical 
Associates (LATA) (the infrastructure and remediation contractors) with 
their past pension service and medical benefits plan intact?  What 
written guidance has DOE provided to those contractors about the right 
of former USEC to transfer their benefits?  Please provide copies of 
all such communications and/or guidance documents.

A5.    There is a total of 104 individuals who presently remain employed 
by the United States Enrichment Corporation (USEC), but who are currently 
made available to Theta Pro2Serve Management Company (TPMC) and 
LATA/Parallax Portsmouth, LLC (LPP):  TPMC arrangements cover 41 USEC 
United Steelworkers (USW) employees and LPP covers 63 USEC USW 
employees.  DOE has provided no written guidance about whether former 
USEC employees may transfer their USEC-accrued benefits to either TPMC 
or LPP.  As was explained in the Department of Energyï¿½s (DOE) letter 
dated January 12, 2006, to Congressmen Whitfield and Strickland, section 
633 of the Energy Policy Act of 2005 does not make any and all USEC 
workers eligible to participate in the Bechtel Jacobs Company Multiple 
Employer Pension Plan; instead section 633 specifies that those USEC 
employees who were not otherwise eligible to participate in that plan 
prior to April 1, 2005, are not accorded the unfunded transfer rights 
afforded by section 633.  USEC employees who are hired by LPP and TPMC 
are eligible to participate in pension plans offered by LPP and TPMC 
and will receive credit for their current service with these employees.  
Those hired USEC employees remain participants in USECï¿½s defined benefit 
pension plan and USEC remains obligated to pay any vested pension and 
medical benefits that those employees earned while at USEC.  


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                  QUESTION FROM CONGRESSMAN STUPAK

Q6.    DOEï¿½s contracts with TPMC and LATA at the Portsmouth site call 
for hiring the incumbent workforce.  However, DOE has authorized LATA a
nd TPMC to violate their contract and lease such workers from USEC. 
Why is DOE directing its contractors to lease workers from USEC instead 
of hiring them?

A6.    The new small business contractors, LATA/Parallax Portsmouth, 
LLC (LPP) and Theta Pro2Serve Management Company, LLC (TPMC), have not 
violated their contracts by leasing United States Enrichment Corporation 
(USEC) employees.  Leasing USEC employees had been a long-standing 
practice at the Portsmouth site by the prior contractor at the site, 
Bechtel Jacobs Company.   

                  QUESTION FROM CONGRESSMAN STUPAK

Q7.    There was a substantial amount of Freon left at the Portsmouth 
site that has a value in the millions of dollars.  What is the position 
of DOE on the ownership of this Freon?  Has DOE transferred to USEC the 
Freon that is being removed from equipment at Portsmouth?  Are there 
discussions underway about such a transfer?  Is there an existing 
memorandum of understanding concerning the ownership of and payment 
for the Freon?  Is so, please provide it for the record.  

A7.     The Department of Energy (DOE) believes it is clear that the 
Freon at Portsmouth is owned by the Federal government, and, so far 
as we are aware, the United States Enrichment Corporation (USEC) has 
not seriously contended otherwise.  The principal issue of disagreement 
between DOE and USEC has been whether the Freon at Portsmouth was or 
was not already under lease to USEC under the Gaseous Diffusion Plant 
(GDP) lease.  On the one hand, there is no express provision in the 
lease (or its Exhibits setting forth the leased property) that 
specifically sets out Freon as leased personal property; however, the 
lease exhibits do identify as leased property certain Portsmouth GDP 
process facilities which contain Freon.  These facilities have not been 
used by USEC to enrich uranium since that plant was shut down by USEC 
several years ago.  That said, the GDP lease, which was required to be 
transferred to USEC when it privatized by the USEC Privatization Act, 
does contain a provision allowing for the lease of additional personal 
property at USECï¿½s request upon DOEï¿½s consent which "shall not be 
unreasonably withheld."    
       In the past year, the DOE has deferred several USEC requests 
to move Freon from Portsmouth to replenish the inventory at the Paducah 
GDP until the partiesï¿½ respective rights and future obligations were 
discussed and resolved to DOEï¿½s satisfaction.  At this point, none of 
the excess Freon currently at Portsmouth has been transferred to USEC 
for its operations at the Paducah GDP.  A December 16, 2005, letter 
from David Garman, Under Secretary for Energy, Science and Environment 
to USEC, proposed terms of an arrangement with USEC that would address 
the immediate operational concerns while the unresolved issues are 
addressed.   

                  QUESTION FROM CONGRESSMAN STUPAK

Q8.    How many pounds of smelted nickel ingot are stored at the Paducah 
Plant?  What are the contaminants that were identified in the 
environmental assessment performed for the DOE in evaluating the sale 
of this nickel to Spain several years ago?  Has anything changed in the 
nickelï¿½s content since that assessment was made?

A8.    Approximately 9,700 tons (19.4 million pounds) of nickel ingots 
are stored at the Paducah site.  In October 1995, the Department of 
Energyï¿½s (DOE) Oak Ridge Operations Office performed an "Environmental 
Assessment of the Proposed Sale of Radioactively Contaminated Nickel 
Ingots Located at the Paducah Gaseous Diffusion Plant" (EA).  Radioactive 
contaminants identified in the nickel by the EA are technetium, uranium, 
neptunium, and plutonium.ï¿½ Technetium is the primary contaminant.ï¿½ï¿½
There has been no change in the content of the nickel since the 1995 EA. 

                  QUESTION FROM CONGRESSMAN STUPAK

Q9.    The DOE contract with Portage requires Portage to "develop and 
evaluate alternate uses of the nickel ingots and acquire competitive 
bids for its reuse" within six months of signing the contract.  But 
DOE has a moratorium on selling radioactively contaminated metals, 
and there is no national or international standard for the release 
of radioactively contaminated nickel.  It may be difficult for Portage 
to obtain bids with this moratorium in place.  Does DOE intend to lift 
the moratorium prior to the bidding process?

A9.     This response assumes that the questionï¿½s references to a 
Department of Energy (DOE) contract with Portage are references to 
the DOE Paducah remediation contract with Paducah Remediation Services, 
LLC, which has Portage as one of its parent companies.  On  January 12, 
2000, former Secretary of Energy Richardson imposed a moratorium on 
the unrestricted release of volumetrically contaminated metal, including 
nickel, into commerce.  DOE will fully review the contractorï¿½s proposed 
alternatives for use of the nickel before deciding on what, if any, 
action it will take.    

                QUESTION FROM CONGRESSMAN STUPAK

Q10.   Has DOE consulted with the steel or other metal industry groups 
about its requirement that Portage develop a plan to sell the Paducah 
nickel?  With whom has DOE consulted and on what dates?	

A10.     This response assumes that the questionï¿½s references to a 
Department of Energy (DOE) contract with Portage are references to 
the DOE Paducah remediation contract with Paducah Remediation Services, 
LLC, which has Portage as one of its parent companies.    While several 
companies have advised the DOE of their interest in the nickel, DOE 
has not formally consulted the metal industry during or since issuance 
of the contract.  

                 QUESTION FROM CONGRESSMAN STUPAK

Q11.   Has DOE completed its preliminary environmental impact statement 
(PEIS) on radioactively contaminated metals reuse?  Please provide a 
status report and projected completion date on this PEIS.	

A11.   A Programmatic Environmental Impact Statement for the Disposition 
of Scrap Metal (SM PEIS) was proposed to evaluate policy alternatives 
for the disposition of Department of Energy (DOE) scrap metal potentially 
having residual radioactivity.  The SM PEIS activity was put on hold 
pending a decision from the U.S. Nuclear Regulatory Commission (NRC) 
regarding its rulemaking on controlling the disposition of solid 
materials from NRC-licensed facilities.  On June 1, 2005, the NRC decided 
to defer its rulemaking.  The DOE is currently re-evaluating the path 
forward for the SM PEIS in light of the NRCï¿½s decision to defer the 
rulemaking.  

                 QUESTION FROM CONGRESSMAN STUPAK

Q12.   What is the current market price of clean nickel?  What is the 
market price of contaminated nickel for "restricted" end use (as opposed 
to free release)?

A12.   In January and February 2006, the market price of publicly traded 
nickel varied from $6.50 to $7 per pound.  The commodities market for 
publicly traded nickel does not reflect a market price for "contaminated" 
nickel.   

                 QUESTION FROM CONGRESSMAN STUPAK

Q13.   As you know, officials from McCracken County and the City of 
Paducah are supporting the sale of this nickel and asking for some of 
the proceeds.  However, the nickel is Federal property, and the contract 
with Portage states that all revenue in excess of costs would go to 
the Federal Government.  What proposal has DOE made to share these 
proceeds with the local communities?  How would that be accomplished?

A13.   This response assumes that the questionï¿½s references to a 
Department of Energy (DOE) contract with Portage are references to 
the DOE Paducah remediation contract with Paducah Remediation 
Services, LLC, which has Portage as one of its parent companies.   
It is premature to estimate the amount of revenue that may be generated 
from the potential sale and re-use of the nickel.  Any proceeds from 
these efforts will be managed pursuant to applicable laws.  

                QUESTION FROM CONGRESSMAN STUPAK

Q14.   We have been told that the privatization agreement between DOE 
and USEC requires USEC to make payment in lieu of taxes for the USEC 
facility in Paducah, which USEC leases from DOE.  But it appears that 
USEC has never made those payments.  Has DOE taken any steps to enforce 
that provision?  Why or why not?

A14.   Nothing in the privatization agreement between the Department 
of Energy (DOE) and the United States Enrichment Corporation (USEC) 
addresses payment-in-lieu of taxes (PILT). ï¿½A statutory provision had 
been enacted in the Energy Policy Act of 1992 that would have required 
USEC to make payments-in-lieu of taxes upon privatization 
    (July 28, 1998); however, that statutory provision was repealed 
(April 26, 1996) prior to privatization.ï¿½ DOE was never responsible 
either under the privatization agreement or by statute to enforce 
such payments.

                QUESTION FROM CONGRESSMAN STUPAK

Q15.   Is there some reason why Paducah and McCracken County have not 
received payments in lieu of taxes for these Federal facilities?

A15.   McCracken County has requested, and the Department of Energy 
(DOE) has made payments to the county in lieu of taxes over several 
years.ï¿½ The requests and DOE payments were made through the McCracken 
County School Board.ï¿½ From 1973 through tax year 1993 (paid in 1994), 
DOE paid more than $230,000.ï¿½ The requests for payments- in-lieu of 
taxes (PILT) are required to be made by the taxing entity on an annual 
basis. The most recent request and payment found in DOEï¿½s records 
appears to have been made in 1995 for $18,348.ï¿½ 
       The United States Enrichment Corporation (USEC) is not subject 
to PILT. ï¿½A statutory provision had been enacted in the Energy Policy 
Act of 1992 that would have required USEC to make PILT upon privatization 
(July 28, 1998); however, that statutory provision was repealed (April 
26, 1996) prior to privatization.ï¿½ This statutory requirement was 
limited to real and personal property owned by USEC.
ï¿½
                QUESTION FROM CONGRESSMAN STUPAK

Q16.   DOE has issued several very large contracts to Native 
American-owned corporations that partner with large traditional clean-up 
corporations for contracts that are many times larger than their normal 
contracts.  But there are no such contracts with African American firms.  
Please describe why this is and what your outreach has been to African 
American firms for these large clean-up contracts.

A16.   Since November 2003, the Department of Energy (DOE) has set 
aside 11 significant environmental cleanup competitive procurements 
for award to small business firms.  All of these contracts were 
awarded competitively in accordance with relevant provisions of the 
Federal Acquisition Regulation and applicable regulations of the U.S. 
Small Business Administration.  In each case, award was 	made 
consistent with the evaluation criteria of the respective Request for 
Proposals to the small business whose proposal represented the best 
value to the Federal government.  The ethnicity of a particular small 
business or joint venture member played no part in the evaluation and 
award.
       The DOE has an extensive program of outreach to all small and 
small disadvantaged business firms, including: DOEï¿½s annual Small 
Business Conference, featuring matchmaking sessions for subcontracting 
opportunities with DOEï¿½s large facility management contractors; 
one-on-one consultations between small and small disadvantaged firms 
and DOE technical experts, Federal and contractor small business program 
advocates and small business program officials; publication of a forecast 
of contracting and subcontracting opportunities; DOEï¿½s Mentor-Protï¿½gï¿½ 
program providing opportunities for small companies to be mentored by 
a large firm doing business with DOE; DOE site-sponsored local small 
business meetings; and  pre-solicitation and pre-proposal conferences 
in which all firms interested in competing for the specific scope of 
work are invited to participate.  


LETTER FOR THE RECORD SUBMITTED BY JAMES A. RISPOLI, ASSISTANT SECRETARY 
     FOR ENVIRONMENTAL MANAGEMENT, U.S. DEPARTMENT OF ENERGY


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RESPONSE FOR THE RECORD SUBMITTED ON BEHALF OF JAMES A. RISPOLI, ASSISTANT 
    SECRETARY FOR ENVIRONMENTAL MANAGEMENT, U.S. DEPARTMENT OF ENERGY

              [[Graphics not available in TIFF format]]



                    INSERT FOR THE RECORD
                    
           The conference report passage dealing with contractor
           employee benefits contained only the text of section
           633 itself.  To the extent section 633 imposed any
           legal obligations on a new Department of Energy (DOE)
           contractor, those obligations would have been recognized
           through the customary "laws, regulations and DOE directives"
           clause that requires the contractor to comply with all
           applicable law.  To the extent section 633 imposed legal
           obligations on the Secretary, that subject would not
           have been appropriate for inclusion in the contract.


                    INSERT FOR THE RECORD

           The Department did at that time take all necessary actions
           to address the safety of current workers from the possible
           presence of phosgene in the cylinders received from the 
           Chemical Warfare Service (CWS)
           
           The Independent Investigate of the East Tennessee Park,
           Volume 1, Past Environment, Safety, and Health Practices
           report noted workers from 1945 to 1947 were exposed to
           phosgene through a project to inspect CWS cylinders 
           previously containing phosgene.  The report also notes
           traces of welding-generated phosgene have occassionally
           been detected, a situation unrelated to the concern
           addressed by the Management Alert.  Since the cylinder
           phosgene issue mentioned in the report described past
           situations no longer in effect, no specific corrective
           actions were developed for this issue.  A review of 
           cylinder handling procedures in effect during the period
           of concern verified the requirement for modification and
           testing of CWS cylinders prior to their placed in uranium
           hexaflouride service, a process that would preclude the
           presence of residual phosgene.  This practive was confirmed
           through interviews with past operations staff.  On this
           basis, the potential for phosgene in cylinders was not 
           deemed a credible hazard necessitating specific phosgene
           characterization.
           
           




\\1\\ By way of history, both USEC and many of the DOE cleanup workers 
were once in the same pension plan: the Lockheed Martin Energy Systems 
plan. The MEPP and the USEC pension plan were spun out of the Lockheed 
Martin Plan in the 1998 and 1999, respectively. The MEPP allows USEC 
workers to rejoin a pension plan which they had previously been part 
of prior to privatization. 

\\2\\ The term grandfathered employee means:  "(A) The individual was 
either: 
(1) an employee of Lockheed Martin Energy Systems, Lockheed Martin 
Utility Services, or Lockheed Martin Energy Research (collectively, LM) 
on March 31, 1998; or (2) a bargaining unit member of the Paper, 
Allied-Industrial, Chemical and Energy Workers International Union, 
AFL-CIO (PACE) (at the East Tennessee Technology Park) who was on the 
LM recall list on March 31, 1998; or (3) a bargaining unit member of 
the Atomic Trades and Labor Council (ATLC) (at the Oak Ridge National 
Laboratory or Y-12 Plant), or PACE (at the Portsmouth Gaseous Diffusion 
Plant or Paducah Gaseous Diffusion Plant) who was either an LM employee, 
a United States Enrichment Corporation (USEC) employee, or on the LM 
or USEC recall list on the date of the applicable Bargaining Unit 
Transition Agreement; and (B) The individual was either: (1) 
subsequently employed by the Contractor or its first-tier or second-tier 
subcontractors for work under the Contract prior to April 1, 2000; or 
(2)  a USEC employee (at the Portsmouth Gaseous Diffusion Plant or 
Paducah Gaseous Diffusion Plant) who transitions directly to the 
Contractor or its first-tier or second-tier subcontractors for work 
under this Contract after March 31, 2000; or (3)  a former USEC employee 
(at the Portsmouth Gaseous Diffusion Plant or Paducah Gaseous Diffusion 
Plant) who received an involuntary reduction-in-force after March 31, 
2000, and is subsequently hired by the Contractor or its first-tier or 
second-tier subcontractors for work under the Contract before January 1, 
2001; or (4) covered by an applicable Bargaining Unit Transition 
Agreement for which no employment deadline is  specified." (emphasis 
added)

\\3\\ The term "or of the Corporation" specifically refers to USEC (post 
privatization) in the USEC Privatization Act of 1996.