Uranium Enrichment:

Congressional Action Needed To Revitalize the Program

RCED-88-18: Published: Oct 19, 1987. Publicly Released: Nov 4, 1987.

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In response to a congressional request, GAO assessed the problems of the Department of Energy's (DOE) uranium enrichment program and identified options to revitalize it.

GAO found that: (1) the program's financial problems include $8.8 billion in unrecovered costs, multibillion-dollar payments for unused power, market uncertainties due to ongoing litigation, and potentially large decommissioning costs; (2) DOE proposed to write off its unproductive assets, which would leave about $3.4 billion in unrecovered costs; (3) price flexibility would allow DOE to balance cost recovery objectives with other program objectives; (4) DOE lowered its production levels to meet the objectives even though the continued low production would cost more than $80 million over the next few years; and (5) DOE proposed to restructure the program as a federal corporation to increase competition, free it from budget restrictions, and permit flexible pricing.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: As of August 1992, the Senate and House had passed S. 2166 and H.R. 776, respectively, which would restructure the DOE enrichment program as a government corporation with flexible pricing authority. The bills would also establish a decommissioning fund. A conference committee met in late 1992 and resolved differences between the bills.

    Matter: In order to place the enrichment program on firm financial footing, Congress should enact legislation to define a reasonable amount of costs the program needs to recover. In defining the amount of costs to be recovered, Congress should allow the write-off of unproductive assets and consider freezing total interest charges.

  2. Status: Closed - Implemented

    Comments: As of August 1992, the Senate and House had passed S. 2166 and H.R. 776, respectively, which would restructure the DOE enrichment program as a government corporation with flexible pricing authority. The bills would also establish a decommissioning fund. A conference committee met in late 1992 and resolved differences between the bills.

    Matter: In order to place the enrichment program on firm financial footing, Congress should enact legislation to provide the enrichment program with sufficient budget and management flexibility to ensure that optimum production schedules are followed and long-term customer commitments are not compromised.

  3. Status: Closed - Implemented

    Comments: As of August 1992, the Senate and House had passed S. 2166 and H.R. 776, respectively, which would restructure the DOE enrichment program as a government corporation with flexible pricing authority. The bills would also establish a decommissioning fund. A conference committee met in late 1992 and resolved differences between the bills.

    Matter: In order to place the enrichment program on firm financial footing, Congress should enact legislation to allow DOE sufficient flexibility in setting its pricing strategy to allow it to meet market competition.

  4. Status: Closed - Implemented

    Comments: As of August 1992, the Senate and House had passed S. 2166 and H.R. 776, respectively, which would restructure the DOE enrichment program as a government corporation with flexible pricing authority. The bills would also establish a decommissioning fund. A conference committee met in late 1992 and resolved differences between the bills.

    Matter: In order to place the enrichment program on firm financial footing, Congress should enact legislation to require that DOE include future decontamination and decommissioning costs in its base of costs to be recovered.

 

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