United States Enrichment Corporation

USEC was created by the Energy Policy Act of 1992 (EPACT) as an initial step in transferring to the private sector the uranium enrichment activities formerly held by the U.S. Department of Energy (DOE). As a wholly owned Government corporation, all of USEC’s stock issued and outstanding is held by the U.S. Treasury. Similarly, all net revenues not required for operating expenses, investments, or working capital are required to be paid as dividends to the U.S. Treasury. However, USEC’s enabling legislation intended that it be operated as a market-oriented business, without many of the constraints faced by Government agencies, while preparing for privatization.

USEC began operating as a business on July 1, 1993. It manages the operation of gaseous diffusion plants for uranium enrichment in Paducah, Kentucky, and Portsmouth, Ohio. Both plants are leased from DOE. For the fiscal year ending June 30, 1997, USEC reported revenues of about $1.6 billion from sales of enrichment services to electric utilities in 14 countries, including the United States. Net income for the year was around $250 million. As a U.S. Government corporation, USEC is exempt from Federal, State, and local taxes.

USEC is also demonstrating the commercial application of the Atomic Vapor Laser Isotope Separation (AVLIS) technology for uranium enrichment. The ownership of AVLIS had been transferred from DOE to USEC pursuant to EPACT. AVLIS differs from the gaseous diffusion and centrifuge technologies that are currently being operated. It utilizes uranium metal, rather than gaseous UF6 , as the feedstock for enrichment. USEC expects to operate AVLIS commercially in 2004.

Pursuant to EPACT, USEC’s Board of Directors submitted its privatization plan to Congress and President Clinton in June 1995. The privatization plan recommends a “dual-path approach,” whereby a negotiated sale to private investors is pursued simultaneously with an initial public offering of common stock. However, privatization will depend on meeting several criteria, including the maintenance of a reliable domestic supply of enrichment service and securing the maximum financial return to the U.S. Government. The United States Enrichment Corporation Privatization Act, signed in April 1996, provides for certain restrictions on privatization. For example, no one person may own more than 10 percent of the corporation within 3 years of privatization. USEC’s Board of Directors is authorized to select the final terms of the sale as well as the purchaser. The Secretary of Treasury is also required to approve the terms of the sale. On July 25, 1997, President Clinton approved the initiation of privatization. This approval directs USEC to work with the Treasury Department, Nuclear Regulatory Commission, and other relevant Government agencies to implement the final privatization transaction.

Contact:
Dan Nikodem
zdenek.nikodem@eia.doe.gov
Phone: (202) 287-1759

http://www.eia.doe.gov/cneaf/nuclear/page/at_a_glance/enrich_priv_box.html