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Secretary of Energy Bill Richardson today made the following statement on the decision by the Board of the United States Enrichment Corporation (USEC), not to resign as the U.S. government's executive agent for the U.S.-Russia HEU (highly enriched uranium) Agreement and to continue to perform this responsibility:

"I'm pleased that USEC is standing by their role as our executive agent for the HEU Agreement. I look forward to continuing to work with them on this important agreement that is so critical to our nonproliferation goals. In the end, I think they realized that it was not in their interest to abandon an exclusive long-term market position that is of considerable financial value.

My immediate concern is about the related matter of the workers at our gaseous diffusion plants in Ohio and Kentucky. I expect USEC to meet their obligations to continue operation of the plants through 2004. I'm committed to do what's right for the critically important HEU Agreement with Russia for our national security, what is right for workers and citizens in communities around our gaseous diffusion plants who helped to win the Cold War and what's fair and proper by way of USEC. In turn, we expect that USEC fully perform on the HEU Agreement and on the privatization agreement that builds in workforce safeguards."

Background
The 1993 U.S.-Russian HEU Purchase Agreement involves the purchase over twenty years by the U.S. from Russia of the low enriched uranium derived from 500 metric tons of highly enriched uranium from Russian nuclear weapons for use in commercial nuclear reactors. USEC is currently the U.S. executive agent for the agreement. USEC became a private corporation in July 1998. If USEC gave notice on December 1, they would still have to perform their contractual obligations under the HEU Agreement until December 31, 2000. After December 1, for various reasons, the period extends to December 31, 2001. The US government can also introduce additional or alternative executive agents on 30 days notice. Annual scheduled quantities from to be ordered from Russia from 2000 to 2013 are some 30 metric tons per year, or roughly one-half of the U.S. market annually. USEC had recently sought additional funds from the U.S. government to compensate for what it characterized as the increasing costs of the implementing the HEU Agreement, but these funds were not provided by the Administration or the Congress.

The Department of Energy owns and leases to USEC the gaseous diffusion plants at Portsmouth Ohio, and Paducah, Kentucky. USEC prior to privatization in July 1998 signed an agreement with the Department of Treasury to keep both plants open through 2004 unless USEC's economic performance met several hardship tests, which USEC's September 10, 1999 10-K filing with the Security and Exchange Commission suggests do not now apply. Legislation has also been proposed that addresses future decontamination and decommission work at these locations, construction of DUF6 plants, and medical assistance for workers exposed during enrichment operations at the plants during the Cold War.

- DOE -

L-99-070