The United States Enrichment Corp (USEC) has been petitioning the Clinton administration and Congress for financial aid. USEC’s request follows the company’s public flotation in July 1998.
USEC is concerned that its obligation to purchase enriched uranium from Russia, under the Department of Energy’s ‘Megatons to Megawatts’ programme, will put the company in the red. The programme is designed to convert Russia’s stockpiled nuclear weapons into fuel for nuclear plants.
USEC has reportedly warned it could lose $2-300 million over the next two years because of the high price it must pay for the Russian enriched uranium. USEC is also concerned about potential environmental liability at its gaseous diffusion enrichment plants in Paducah, Kentucky, and Portsmouth, Ohio. The Senate Committee on Governmental Affairs is planning hearings on whether workers at the two enrichment plants who have contracted illnesses should be compensated.
Cost pressures were a factor in USEC’s recent decision to abandon plans for a new enrichment plant using atomic vapour laser isotope separation (AVLIS) technology.
USEC’s stock, which traded at $14.50 a share at the time of the initial public offering, was in the $9-$10 range by autumn 1999, despite the company’s recent $100 million stock buyback programme.
Federal aid could include tax credits for utility companies that purchase enriched uranium from Russia, relief from potential environmental liability, and help in renegotiating the last two years of the contract with the Russians.