Comments on Proposed Legislation to Restructure DOE's Uranium Enrichment Program

GAO discussed the future of the Department of Energy's (DOE) uranium enrichment program, focusing on three proposed bills and Representative Sharp's proposal. GAO noted that: (1) the proposed legislation and Representative Sharp's proposal would restructure the DOE uranium enrichment program as a government corporation and allow the corporation to set prices to maximize long-term returns; (2) as of April 1991, DOE estimated that environmental cleanup and decommissioning costs would be about $3 billion; (3) the three bills would transfer responsibility for the new DOE atomic vapor laser isotope separation processes to the new corporation, whereas Representative Sharp's proposal would license the technology rather than transfer ownership; and (4) two of the proposed bills and Representative Sharp's proposal would establish a program to help pay a share of the costs to clean up mining wastes generated under government contracts. GAO believes that: (1) since the existing uranium enrichment program could not generate sufficient revenues to repay past unrecovered costs, Congress needs to allow DOE to write off past costs associated with unproductive program assets; (2) the privatization of the government corporation has been an admirable legislative goal, but several statutorily imposed difficulties need to be overcome before the corporation can be sold; and (3) a $3-billion cost recovery goal would allow the corporation to remain competitive if environmental costs continue to increase or foreign competition continues to cut into U.S. markets.