[Congressional Record (Bound Edition), Volume 146 (2000), Part 8]
[House]
[Pages 11818-11820]
[From the U.S. 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.

[[Page 11819]]



     [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 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.

[[Page 11820]]

       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.

                          ____________________