USEC Portsmouth Gaseous Diffusion Plant 'Cold Standby' Plan

B-286661: Jan 19, 2001

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GAO reviewed the availability of funds for a reported plan of the Department of Energy (DOE) to (1) keep the Portsmouth gaseous diffusion plant, leased and operated by the United States Enrichment Corporation (USEC), in a "cold standby" status and (2) build an advanced centrifuge technology demonstration plant for gas centrifuge uranium enrichment. DOE intends to cover the cost of this plan from $725 million transferred from the USEC Fund to miscellaneous receipts of the Treasury. DOE maintains that the USEC Privatization Act of 1996 allows DOE to pay the costs of implementing its plan from the USEC Fund. GAO concluded that the $725 million was properly credited back to the USEC Fund and remains available for obligation. GAO further concluded, however, that "expenses of privatization" authorized by the USEC Privatization Act do not include costs such as those associated with the DOE plan and, accordingly, the USEC Fund is not available to cover such costs.