[Congressional Record Volume 146, Number 79 (Wednesday, June 21, 2000)]
[House]
[Pages H4912-H4913]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ON USEC DECISION TO CLOSE PORTSMOUTH
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Ohio (Mr. Strickland) is recognized for 5 minutes.
Mr. STRICKLAND. Mr. Speaker, a very sad and tragic thing happened
today, and I think the American people need to know about it. But
before I explain that in detail, I would like to give a little history
regarding this occurrence.
From the mid-1950s, there have been two facilities in this country
that have produced enriched uranium, first of all for our nuclear
arsenal and, more recently, for fuel for our nuclear power plants.
Approximately 23 percent of our Nation's electricity is generated
through nuclear power, and most of the fuel that generates that
electricity is produced in these two domestic plants.
A couple of years ago, this Congress and the administration unwisely
decided to privatize this vital industry. At the time of privatization,
the private company was obligated to continue to operate these two
facilities through the year 2004. Today, this privatized company and
their irresponsible and parasitic leadership and their board of
directors decided to close one of those two facilities. I would like to
share with my colleagues why that is so unwise and so unacceptable.
We know what happens to our country when we are overly dependent upon
foreign sources for energy. We see that in the high gas prices that we
are all experiencing today. What will it be when 23 percent of the
electricity in this country is dependent upon foreign sources?
To their credit, the Department of Energy sent an emergency letter to
the director of the United States Enrichment Corporation and the
members of the board of directors today explicitly asking them not to
take this action. I would read from the letter from Under Secretary
Gary Gensler. He said, ``I am writing to urge you and the other members
of the board not to vote to initiate a plant closing at today's board
meeting.''
In addition to this letter, Secretary Richardson sent a very strongly
worded letter to this CEO and to the members of the board asking that
they not proceed. Unbelievably, unbelievably, this industry, which was
privatized less than 2 years ago, and has very definite public policy
purposes and obligations, decided to thumb their nose at the Department
of Treasury and the Department of Energy, the governor of Ohio,
multiple Members of this House, and Ohio's two Senators and they
proceeded to vote to close this vital facility.
USEC's announcement that it will seek to close this facility is
unwise, unwarranted and unacceptable; and I serve notice that I will
fight this plant closure with every fiber of my being. The thousands of
working families in my part of Ohio who depend on this industry for
their livelihood deserve better from this government and from this
corporation. For generations these brave men and women have sacrificed
for our national security, and now they are being abandoned by a USEC
management that is driven more by short-term profit and self-
preservation than by common sense.
USEC appears to be dead set on decimating America's ability to
produce the fuel that supplies 23 percent of our Nation's electricity.
There is a clear solution to this problem, however. I will introduce
legislation in this Congress to direct the Federal Government to buy
back USEC and to continue operating both the Portsmouth, Ohio, and
Paducah, Kentucky, plants.
I am also calling for an Inspector General investigation into this
decision and into USEC's privatization. It is becoming more and more
apparent that national security, energy security, and thousands of
hardworking southern Ohioans are suffering as a result of the decisions
of this corporation. I cannot overstate my anger at this decision or my
ironclad commitment to protect our workers and to make sure that all
responsible parties are held accountable.
Earlier today, after USEC made this announcement, Secretary
Richardson responded, and I read from his response. He says, ``I am
extremely disappointed by the United States Enrichment Corporation's
decision to close the uranium enrichment plant in Portsmouth, Ohio.
First and foremost, I am very concerned about the effect of this
closure on the workers. They deserve better treatment than they are
getting from USEC.''
Mr. Speaker, this is a serious matter. I call it to attention of this
House, and I am submitting for the Record additional documents relating
to this topic.
[News Release from Congressman Ted Strickland, June 21, 2000]
Strickland Statement on Uranium Plant Closure
Washington, D.C.--USEC's announcement that it will seek to
close the Portsmouth Uranium Enrichment Plant is unwise,
unwarranted and unacceptable. I will fight this plant closure
with every fiber of my being. The thousands of working
families in our part of Ohio who depend on this industry for
their livelihood deserve much better. For generations these
brave, hard-working men and women have sacrificed for our
national security. Now they are being abandoned by a USEC
management that is driven more by short term profit and self-
preservation than by common sense. USEC appears to be dead
set on decimating America's ability to produce the fuel that
supplies 23 percent of our nation's electricity. There is a
clear solution to this problem: I will introduce legislation
in Congress to direct the Federal Government to buy back USEC
and continue operating both the Portsmouth and Paducah
plants. I will also call for an Inspector General
investigation into this decision and USEC's privatization. It
is becoming more and more apparent that this is simply a case
of insider enrichment for USEC's management--enrichment at
the expense of national security, energy security and
thousands of hard-working southern Ohioans. I cannot
overstate my anger at this decision or my ironclad commitment
to protect our workers and make sure that all responsible are
held accountable.
____
Department of the Treasury,
Washington, DC, June 21, 2000.
Mr. James R. Mellor,
Chairman of the Board, USEC, Inc., Bethesda, MD.
Mr. William H. Timbers,
President and Chief Executive Officer, USEC Inc., Bethesda,
MD.
Dear Messrs. Mellor and Timbers: I have received Mr.
Timbers' letter dated Friday, June 16, 2000, in which he
wrote to inform Treasury that the Board of Directors, of
[[Page H4913]]
USEC Inc. ``must contemplate the termination of enrichment
operations at one plant'' and that the next meeting of the
Board is scheduled for today.
I am writing to urge that you and the other members of the
Board vote not to initiate a plant closing at today's Board
meeting. It is deeply disturbing that the USEC Board is even
considering the precipitous step of initiating a plant
closing less than two years after USEC privatization. Before
any closing, every possible alternative should be pursued.
The Board should give full consideration to the impact of its
actions on effected communities and USEC's employees.
Sincerely,
Gart Gensler.
____
[DOE News, June 21, 2000]
Statement of Secretary Bill Richardson on USEC decision to close
Portsmouth
``I am extremely disappointed by the United States
Enrichment Corporation's (USEC) decision today to close the
uranium enrichment plant at Portsmouth. First and foremost, I
am very concerned about the effect this closure will have on
USEC workers. Many of these men and women spent their entire
working lives helping our nation win the Cold War. They
deserve better treatment than they are getting from USEC.
``The decision is just the latest in a series of short-
sighted decisions aimed at bolstering the corporation's near-
term standing on Wall Street. The decision announced today
leaves unanswered fundamental questions affecting the
employees, the Corporation's future and USEC's ability to
carry out important national security obligations to the
United States.
``This decision was not inevitable. When USEC was
privatized in 1998, it inherited a healthy business with a
bright future. A series of decisions by the corporation's
present management have weakened the Corporation and the
domestic uranium industry and, coupled with a faltering long-
term business strategy, have led to this unfortunate outcome
that will result in several hundred Ohioans being put out of
work.
``We have opposed layoffs from the start. Earlier this
year, when USEC announced it would be downsizing at Paducah
and Portsmouth, I urged USEC to provide early retirement and
other benefits to help these workers, but the company
refused. Now they're leaving even more workers up in the air
by announcing closure of this plant, without any credible
indication of their commitment or ability to deploy a
replacement enrichment technology, necessary for long-term
viability. The Energy Department has worked hard to increase
funding for its cleanup activities at these sites and for
workers displaced from USEC's downsizing to move to the
cleanup.
``The administration is committed to doing all it can to
mitigate the effects of this action on the workers and the
community. We will be reviewing all our options in the days
ahead and intend to vigorously pursue every possible means to
mitigate the impacts of USEC's management failures on the
workers at Portsmouth. I will also recommend fundamental
changes in the future relationship between the U.S.
government and USEC, including serious consideration of
replacing USEC as executive agent for the Russia deal.''
____
The Secretary of Energy,
Washington, DC, June 21, 2000.
Mr. William Timbers,
Chairman and CEO, United States Enrichment Corporation,
Bethesda, MD.
Dear Mr. Timbers: I am in receipt of a copy of your
response of June 20 to my recent letter concerning the HEU
agreement, the impacts of the proposed commercial SWU deal on
domestic production, your ability to sustain the Treasury
agreement, and USEC's need for a future enrichment
technology.
While I have yet to receive a formal reply to my letter, I
must assume that the copy I received from the press
constitutes your views on these matters. As such, I would
like to comment on some of your key points.
The privatization of USEC in July 1998 was premised on
USEC's judgment that the HEU Agreement was an asset to USEC,
that it would keep two plants open until 2005, and that it
would develop a future enrichment technology. USEC was
provided many assets to this end. Your letter, in contrast,
now reports that you consider the HEU Agreement to be a
burden, that you have long contemplated closing a plant, and
that you require substantial federal assistance for a
different enrichment technology.
I am pleased that you share our views about the national
security importance of the HEU Agreement. I am confused,
however, by the assertion in your letter that the important
nonproliferation objective of the HEU agreement ``. . . has
succeeded at the expense of USEC.'' Last December, USEC made
a decision to continue as sole executive agent for the
Russian HEU agreement. Presumably this reflected your
business judgment that continuing on as the executive agent
was in the best business interests of your company and USEC
stockholders. Actions speak louder than words.
DOE remains concerned about the impacts of the proposed
commercial SWU deal on our domestic industry. As you know,
the HEU Agreement was put together to balance carefully
national security and energy security objectives, a balance
that could be upset by the proposed commercial SWU side
deal. While DOE supports the effort to move toward a new
pricing mechanism with Russia for the HEU Agreement, given
the potential impacts, we continue to maintain that the
commercial SWU proposal deserves serious and thoughtful
review.
Also, I must make clear that we do not agree with your
characterization of the commercial SWU proposal as conforming
to guidance from the subcommittee of the EOC on commercial
SWU levels that affect the domestic industry. Further, we
were surprised by your characterization of the domestic
impact of the proposed commercial SWU deal as ``modest,''
since USEC recently filed objections to the introduction of
even smaller amounts of SWU from another foreign country,
based specifically on concerns about its impacts on the
domestic market.
In my view, your meeting with me last January in no way
provided a justification for early plant closure. In addition
to the potential energy security impacts of such an action, I
remain deeply concerned about its regional employment and
economic impacts. The same management decisions that led you
to notify Treasury of USEC's downgraded credit rating, and
your lack of follow through on the very commitments that
engendered broad support for USEC privatization in the first
place, could ultimately mean ongoing efforts on USEC's part
to receive open-ended federal assistance without reciprocity
on significant public policy concerns.
On the development of enrichment technology, I would note
that DOE has never been provided an analysis supporting the
discontinuation of AVLIS, in which, as a government-owned
corporation, USEC spent several hundred million dollars of
public money. DOE is now being asked to start down a new path
of public investment but has yet to receive a comprehensive
proposal from USEC, let alone a strategic plan on its
proposed path forward for centrifuge technology development.
While we do not know how you specifically intend to proceed
on technology development, this is what we do know: USEC
wants DOE to invest outright $50 million in centrifuge
technology development; USEC wants $1.2 billion in federal
loan guarantees for building a centrifuge facility; USEC
wants use of DOE's GCEP facility (which would save USEC $300
million but cost DOE $150 million), and; USEC wants a gas
centrifuge CRADA with DOE (which I note our organizations
have been negotiating for at least two months).
USEC's list of ``wants'' from the federal government is a
long one and is not backed up by a reasoned plan to justify
such a significant investment of the public's money. Surely
you must acknowledge that if DOE and other agencies in the
federal government are going to invest substantial public
funds in a private enterprise, we are owed more than
piecemeal requests for federal assistance.
Many of the questions I asked in my original letter to you
remain unanswered or were answered as indirectly as the
avenue through which I received your response. I hope to
receive more enlightening answers to my concerns and ask that
the views I expressed in this letter will be shared with your
board members immediately.
We look forward to hearing from you.
Yours sincerely,
Bill Richardson.
____________________