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coordinators work in a plant. |
Disillusioned investors have wiped out 95 percent of the company’s market value since 2007. Standard & Poor’s has saddled it with a dismal CCC-plus credit rating. And USEC’s chief executive John Welch says that “clearly we’re coming to crunch time here.”
When USEC was created by the U.S. government in the 1990s, the idea was to privatize the job of uranium enrichment. USEC leased an old Energy Department plant and under a program known as Megatons to Megawatts, it has blended down highly enriched uranium taken from 17,698 Russian warheads under a U.S.-Russia treaty.
Two decades later, however, the Bethesda-based firm is still struggling to stand on its own two feet. Its deal for inexpensive supplies from dismantled Russian nuclear weapons runs out at the end of 2013. A contract for electricity from the Tennessee Valley Authority expires in May and USEC’s outdated plant — which devours as much electricity as the city of Nashville — will be unable to compete with other companies.
USEC says it needs government help. It wants to build a new, more efficient facility that would house thousands of 43-foot-tall centrifuges. But the two-month budget measure Congress passed in December blocks a $150 million Energy Department grant that USEC needs to continue development. And USEC’s application for a $2 billion Energy Department loan guarantee has been stalled for nearly four years, despite lobbying by the entire congressional delegation from Ohio, where the company wants to build the plant.
Ohio is a battleground not only for USEC, but for President Obama and House Speaker John A. Boehner (R-Ohio). Obama needs votes in the swing state, and USEC says the American Centrifuge Project would provide 4,000 construction jobs and 400 long-term jobs.
While campaigning in 2008, Obama wrote to Gov. Ted Strickland that “under my administration, energy programs that promote safe and environmentally sound technologies and are domestically produced, such as the enrichment facility in Ohio, will have my full support.” He added, “I will work with the Department of Energy to help make loan guarantees available for this and other advanced energy programs that reduce carbon emissions and break the tie to high cost, foreign energy sources.”
Boehner wrote a glowing letter on Oct. 27, 2009, in support of the USEC loan guarantee. But in December, he insisted that the two-month budget measure should not include authorization for the Energy Department to direct $150 million to USEC because that would be an earmark. He says he supports passage of free-standing legislation that would let Congress weigh the grant on its merits.
The political fallout: Boehner blames Obama for failing to approve the loan guarantee. The Obama administration, burned by bad publicity over its loan to a now-bankrupt solar panel maker named Solyndra, says USEC’s credit rating is too low to qualify for a loan guarantee and blames Boehner for blocking the grant.
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