Senate OKs Government Nuclear Fuel Corporation

WASHINGTON —  The Senate today approved legislation to convert the Energy Department’s nuclear fuel operations to a government corporation, a move environmentalists said would amount to a $9-billion bailout for nuclear utilities.

The vote was 73 to 26. A similar House bill has not moved out of committee.

The Senate bill, strongly supported by the Bush Administration, would create an independent federal corporation to run uranium enrichment plants at Portsmouth, Ohio, and Paducah, Ky. A plant at Oak Ridge, Tenn., has been inactive since 1985.

The proposed corporation would be independent of the federal bureaucracy and could make financing and operating decisions without prior approval from Congress.

The Administration says this conversion would make the uranium enrichment operation more sound and capable of competing against foreign suppliers of enrichment services--including the Soviet Union, which now supplies some U.S. nuclear utilities.

The Energy Department facilities are the only domestic suppliers of enriched uranium, which is the fuel used in nuclear reactors. The department’s plants increase, or “enrich,” uranium-235 atoms beyond their natural concentration.

The plants also enrich uranium for use in government reactors that make materials for nuclear warheads.

The American Nuclear Energy Council, representing utilities and others with interests in the nuclear industry, applauded the Senate vote and said it hopes that the House will move quickly to pass its own version.

“Electricity consumers will benefit because competitively priced enrichment services will keep nuclear fuel costs low,” Edward M. Davis, president of the nuclear group, said in a statement.

Environmentalists and some other citizen groups have criticized the Senate bill as an unjustified bailout of the commercial nuclear industry. They contend that since the utilities benefit from operation of plants built with taxpayers’ money, the industry should be held responsible for the debt incurred by the plants.

The Energy Department says the industry should not be held accountable because the plants’ operations benefit the whole country. It also says there is $3 billion in outstanding debt, not the $9 billion claimed by Public Citizen, a Ralph Nader organization that had pressed for defeat of the Senate legislation.