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June 13, 2014

Government Report Shows that Nuclear Uranium Deal Was Illegal

Paducah USECThis week the U.S. Government Accountability Office (GAO) confirmed a major secret that the Sierra Club's anti-nuclear activists have been shouting about for two years now:

The Energy Department, in an effort to prop up a troubled uranium enrichment company, arranged for uranium transfers that failed to comply with laws about fair pricing, national security determinations and limits to prevent the department from flooding the domestic uranium market.

This illegal hustle stars the Department of Energy (DOE), USEC (a now bankrupt uranium enrichment company in Paducah, Kentucky), the Tennessee Valley Authority (TVA) and features these victims: Energy Northwest (a consortium of 27 Northwest Public Utilities formerly known as WPPS) and the American people.

In 2012, through some elaborate dealings, USEC sold enough nuclear fuel to last for 30 years to Columbia Generating Station (CGS), the lone nuclear reactor in the Pacific Northwest. At the time, Bonneville Power was quoted in a public announcement saying that the deal would generate $80 million for ratepayers.

They celebrated in Richland, Wash., where the nuclear reactor is located, and in Paducah, Ky., where jobs were saved for one year.  Almost immediately after the fuel deal was announced, the license for CGS was renewed for 20 years without any regard to public sentiment concerning the stability of the plant.

Sierra Club volunteers working in the Northwest and Midwest recognized these moves as a plan to keep the dirtiest uranium enrichment plant running.  

According to the GAO, the whole transaction was illegal. DOE did not have the authority to transfer the uranium for the fuel in the first place, Energy NW paid more than the market for the fuel, TVA got a bargain, and the DOE kept a source for tritium for weapons.  

Another point of dismay for activists was that USEC is the largest emitter of Freon in the U.S. You may have thought Freon was banned. It was...except that USEC, in the name of "national security," was allowed to stockpile it.

And yet another problem with USEC is that it requires eight coal plants located at Shawnee to run full time to keep this plant operating. The Sierra Club Beyond Coal Campaign has been actively working to retire these coal plants because of their massive pollution.

Long before this GAO report, environmental and social justice groups in the Northwest questioned whether it was really an economic boon to buy this fuel. We asked Robert McCullough, a well-known economist to look at the long term financial aspects of operating CGS. As part of the report, he evaluated the fuel deal. In an interview with the Willamette Weekly, McCullough said we could replace the plant with cheaper power and save ratepayers $1.7 billion over the next two decades. (If you want more detail about his conclusions, his report is over 400 pages and available here.)

We are thankful for the GAO's report issued June 9 that breaks this whole hustle apart. McCullough's conclusions are supported by the GAO report.

Obviously there's no happy ending to this story. The USEC plant is in bankruptcy.  DOE is accused of acting outside of their authority. The celebrating is over. All parties, including TVA, will be scrutinized when the President agrees to the outside investigation recommended by the GAO.  

We ask that the investigation be done with public scrutiny and that the Hustlers be held accountable. In the meantime, Energy NW needs to regain the faith of its rate payers and separate itself from this "dirty little secret."

-- Leslie March, Sierra Club

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