In yet another attempt to revive the struggling United States Enrichment Corporation (USEC), the Department of Energy (DOE) has offered USEC $88 million in cash immediately and promised another $200 million to the financially troubled company, pending additional congressional appropriations. While the deal is touted by DOE to be a cost-shared cooperative agreement, USEC was required to provide only $22 million, far less than the DOE contribution.
Despite continued federal subsidies, USEC has been in financial straits for years. In 2009, Moody’s Credit Rating Service gave them junk bond status, after four consecutive credit downgrades. Today the company is valued at less than $115 million—far less than the deal DOE is handing them. Their stocks are valued now at about 94 cents/share.
The money DOE is providing would go to USEC’s American Centrifuge Project, but this massive uranium-enrichment project that USEC is trying to deploy continues to run into technical hurdles. Recently, the Nuclear Regulatory Commission reported that six of the project’s centrifuges failed. USEC has already spent ten years and more than $2.2 billion to develop these machines but still needs $3 billion to finish.
Taxpayer money has been used to provide bailout, after bailout to the struggling company, but the time has come to end this sweetheart deal. Reps. Markey (D-MA) and Burgess (R-TX) have sent a letter to the Government Accountability Office requesting an investigation into DOE’s continued support for USEC.
In the meantime, we hope Congress weighs in to stop this gravy train. But so far every attempt to stop USEC subsidies has failed. The Appropriations Committees in the House and Senate have slated $100 million and $150 million respectively, into their Fiscal Year 2013 Energy and Water spending bills. In the House, Reps. Michael Burgess (R-TX) and Ed Markey (D-MA) offered an amendment to stop the $100 million and it was voted down 168 to 249. The House Armed Services Committee also stuck $150 million for USEC into the Chairman’s mark of the National Defense Authorization Bill and defeated efforts led by Reps. Steve Pearce (R-NM) and Ed Markey (D-MA) to remove it.
With trillion dollar deficits and a $15 trillion debt, DOE should cut USEC loose and stop wasting money. Taxpayers should not be asked to provide an additional dime to this troubled project.
For more information, please contact Autumn Hanna at (202) 546-8500 x112 or autumn[at]taxpayer.net.