[Issues Relating to DOE Uranium Enrichment Program]

In response to a congressional request, GAO addressed a number of issues relating to the Department of Energy's (DOE) uranium enrichment program. GAO noted that DOE had decided: (1) not to use any portion of the Gas Centrifuge Enrichment Plant (GCEP) that had been under construction at Portsmouth, Ohio, but had not been placed in operation; and (2) to take a gaseous diffusion plant at Oak Ridge, Tennessee, out of operation and place it on standby. Congress is concerned that DOE may not recover the investment in GCEP and the government's undepreciated investment in the Oak Ridge facility. The Atomic Energy Act requires DOE to price its uranium enrichment services so as to recover, over a reasonable period of time, the costs to the government of providing enrichment services. GAO has determined that the DOE write-off of $1.2 billion of the government's investment in gaseous diffusion plants without including the amount of that cost in the formula for computing the 1985 unit price and future prices had violated the cost recovery requirements. GAO requested the DOE views on: (1) the interest cost to the government of the investment in the incomplete GCEP facility; (2) the investment's price that remains undepreciated in the Oak Ridge facility; (3) its plans and actions for the pricing for uranium enrichment services and on any anticipated repayments to the Treasury with respect to GCEP and/or its Oak Ridge facility; (4) the total amount of the outstanding government investment in the uranium enrichment program; and (5) the amendment to the utility services contract that permits utilities to purchase 30 percent of contracted needs at an incentive price.