[Congressional Record (Bound Edition), Volume 146 (2000), Part 10]
[House]
[Pages 14153-14154]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 14153]]

   PRIVATIZATION OF THE URANIUM ENRICHMENT INDUSTRY: HOW IT AFFECTS 
                                AMERICA

  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, I have addressed this House several 
times in the last week and a half regarding a matter that is of great 
importance to this entire Nation, and that is the uranium enrichment 
industry which was privatized, an industry which was privatized 2 years 
ago.
  Just recently, this privatized company made the announcement that one 
of the two enrichment facilities in this country would be closed, thus 
displacing nearly 2000 workers from jobs, and, I believe, endangering 
the economic and the energy security of this Nation.
  I come to the House floor today because I want to share with Members 
of this House and with the country a letter which was sent to the CEO 
of this privatized company by the chairman of my committee, the 
Committee on Commerce. This letter was sent by the gentleman from 
Virginia (Mr. Bliley). I would just like to read one paragraph from the 
letter, because I think it is relevant to what has happened with this 
industry.
  Mr. Bliley writes to Mr. Timbers: ``According to a Wall Street 
Journal editorial dated Thursday, June 28, you indicated that USEC's,'' 
the private company, that its ``recent decision to close the Department 
of Energy's Portsmouth Gaseous Diffusion plant was made in response to 
congressional intent in privatization language. Specifically, you state 
that USEC's decision to close the Portsmouth plant was the reason 
Congress privatized the company.''
  Then Mr. Bliley says to Mr. Timbers: ``I can assure you that this is 
not the case. A single operating gaseous diffusion plant with no 
credible plan for a succeeding enrichment technology is not what 
Congress intended for the privatized company.''
  Mr. Speaker, the reason this is so relevant is the fact that 
approximately 23 percent of all of the electric generated in our 
country is generated through nuclear power. Mr. Timbers, through his 
actions and this private company's decision to close one of our two 
plants, I believe, puts in grave danger this Nation's economic and 
energy security.
  In the letter to Mr. Timbers, the gentleman from Virginia (Mr. 
Bliley) asks several questions, and I would like to share one of those 
questions and requests for information. He says to Mr. Timbers: ``In 
the event of an interruption of the deliveries of material from Russia 
over the next 5 years, how does USEC plan to meet its committed demands 
for SWU?'' That is, the nuclear fuel. And then he says: ``Please answer 
this question separately for each of the following scenarios: What 
happens if there is a 3-month delay in Russian deliveries, a 6-month 
delay in Russian deliveries, a 1-year delay in Russian deliveries, a 2-
year delay in Russian deliveries, and a delay in Russian deliveries 
sustained beyond a 2-year period? For each of these scenarios, please 
assume that the delays begin after USEC has deactivated the Portsmouth 
plant.''
  Mr. Speaker, the Nuclear Regulatory Commission will be issuing a 
report soon, and they must verify that USEC can continue to be depended 
upon to provide a reliable supply of domestic fuel to meet the Nation's 
energy needs. It is imperative that we define domestic as the material 
which is produced within the United States of America, and reliable 
must be defined as providing for 100 percent of our Nation's need for 
nuclear fuel.
  If USEC cannot do this, then they can no longer be licensed to 
operate these gaseous diffusion plants, and that is all the more reason 
why this Congress should reconsider the privatization of this industry.
  Next week I will introduce legislation that will enable us to do what 
we need to do, and that is to assume the Government's ownership of this 
industry once again and, therefore, protect our country from having to 
depend upon foreign sources for nuclear fuel for some 23 percent of our 
Nation's electric needs.

                              {time}  1630

  Mr. Speaker, I include for the Record a letter from the gentleman 
from Virginia (Mr. Bliley) to Mr. William Timbers:
  The letter referred to is as follows:

                                         House of Representatives,


                                        Committee on Commerce,

                                    Washington, DC, July 11, 2000.
     Mr. William H. Timbers,
     President and CEO, USEC, Inc.,
     Bethesda, MD.
       Dear Mr. Timbers: As you know, the Committee is continuing 
     its review of USEC privatization and its impact on national 
     security and the domestic uranium industry. I am writing to 
     you with respect to recent, troubling statements you have 
     made on this subject, and to obtain additional documents and 
     information related to USEC privatization.
       According to a Wall Street Journal editorial dated 
     Thursday, June 28, 2000, you indicated that USEC's recent 
     decision to close the Department of Energy's (DOE) Portsmouth 
     Gaseous Diffusion Plant (Portsmouth plant) was made in 
     response to Congressional intent in privatization 
     legislation. Specifically, you state that USEC's decision to 
     close the Portsmouth plant was ``the reason Congress 
     privatized the company.'' I can assure you that this is not 
     the case. A single operating gaseous diffusion plant with no 
     credible plan for a succeeding enrichment technology is not 
     what Congress intended for the privatized company.
       In a recent letter to Energy Secretary Bill Richardson 
     dated June 20, 2000, you also stated that USEC has 
     ``successfully implemented the HEU agreement,'' and that 
     ``recent Congressional hearings have confirmed [the HEU 
     agreement] has succeeded at the expense of USEC.'' I should 
     remind you that USEC freely negotiated and bound itself to 
     the terms of the current 5-year implementing contract, and in 
     1998 made public disclosures in support of an Initial Public 
     Offering (IPO) of stock, which included a complete analysis 
     of what impact the HEU agreement could have on a privatized 
     company. Given the USEC Board of Directors' fiduciary 
     responsibilities to its shareholders, I must believe that 
     USEC's decisions last November to continue as Executive 
     Agent--after threats of resignation--was supported by a 
     thorough assessment and conclusions that the HEU agreement is 
     important for USEC's survival.
       I also am perplexed by the extreme about-face you and your 
     company have demonstrated on several issues in the months 
     since privatization. For instance, in less than 12 months 
     after privatization, the AVLIS technology went from USEC's 
     low-cost solution for future uranium enrichment production, 
     to a useless technology that will not see commercialization. 
     Furthermore, I find it hard to believe that ``global business 
     realities'' that ``no one could have foreseen at the time of 
     privatization'' are the cause of USEC's precipitous decline 
     over the past 22 months, as you indicated in your letter to 
     Secretary Richardson. I am now more convinced that USEC's 
     flagging business performance and the threat it presents to 
     domestic energy security is directly related to questionable 
     representations made by USEC to its Board in support of your 
     bid for an IPO, as well as questionable business decisions 
     made by the company since privatization.
       Accordingly, in order to obtain a better understanding of 
     these issues, I am requesting that, pursuant to Rules X and 
     XI of the U.S. House of Representatives, you provide the 
     Committee with the following documents and information by 
     July 25, 2000:
       1. Please identify the total amount of SWU USEC expects to 
     sell over the next five years. Of this amount, please 
     identify the total amount of SWU USEC expects to sell to 
     domestic nuclear power companies.
       2. Please identify the total amount of SWU USEC will 
     efficiently produce at the Paducah Gaseous Diffusion Plant 
     (Paducah plant) per year, for over the next five years.
       3. Please identify the total amount of SWU USEC currently 
     has in inventory.
       4. Please indicate when USEC expects to obtain a license 
     amendment from the Nuclear Regulatory Commission to increase 
     its uranium enrichment capacity at the Paducah plant.
       5. Please discuss the earliest date USEC can reasonably 
     construct and begin to operate a new uranium enrichment 
     plant, and at what capacity this new plant would produce SWU.
       6. In the event of an interruption in HEU deliveries from 
     Russia over the next five years, how does USEC plan to meet 
     its committed demand for SWU? Please answer this question 
     separately for each of the following scenarios: a three-month 
     delay in Russian deliveries, a six-month delay in Russian 
     deliveries, a one-year delay in Russian deliveries, a two-
     year delay in Russian deliveries, and a delay in Russian 
     deliveries sustained beyond a two-year period. For each of 
     these scenarios, please assume that the delays begin after 
     USEC has deactivated the Portsmouth plant.
       7. If the United States Government decides to terminate 
     USEC as Executive Agent to

[[Page 14154]]

     the HEU agreement, in part or in full, please describe how 
     this would affect USEC and whether the company could meet its 
     committed demand for SWU.
       8. Please provide all records relating to communications 
     between USEC or its board (or any of their directors, 
     officers, employees, agents or contractors) and any outside 
     individual or entity, whether governmental or private, 
     regarding the decision whether to proceed with privatization 
     or the choice among competing privatization options. For 
     purposes of this request, you may limit your production to 
     those records created on or after January 1, 1997. Please 
     refer to the attachment for definitions of the terms 
     ``records'' and ``relating.''
       Thank you for your cooperation with this request. If you 
     have any questions, please contact me directly, or have a 
     member of your staff contact Dwight Cotes of the Committee 
     staff at (202) 226-2424.
           Sincerely,
                                                       Tom Bliley,
     Chairman.

                          ____________________