Piketon plant funding faces fresh battle

PIKETON – Another front in the battle for adequate funding at the former Portsmouth Gaseous Diffusion Plant in Piketon has opened with a potential $45 million threat in 2016 to a program that makes up the majority of the project’s funding.

The decontamination and decommissioning work is funded through two primary sources. The most highly publicized in the past year has been federal appropriations, a shortfall of which nearly resulted in hundreds of layoffs in December before a last-minute boost was provided by Congress that kept operations moving at their current levels.

Those appropriations, however, make up only about 30 percent of all cleanup funding. The remaining 70 percent comes from a barter program that allows the sale of uranium inventory from the site on the open market.

The Department of Energy determines the amount of that inventory that can be bartered each quarter, with limits set in an effort to balance the needs of the project with the needs of the domestic uranium mining, conversion and enrichment industries.

It’s that area of funding that’s become the latest battleground for keeping the cleanup work on track.

Energy Secretary Ernest Moniz, in a May 1 secretarial determination on the barter program, stated that the program itself does not hurt the industry as a whole.

Having said that, however, he also noted the amount of uranium that the DOE allows for bartering does not need to be as high as the 2,705 metric tons allowed during 2014 for both the Piketon work and for contractors involved with down-blending highly enriched uranium.

“After balancing the Department’s goals regarding the projects being partly supported by uranium transactions with the Department’s goal to help maintain healthy domestic nuclear industries, and reviewing responses to the Department’s solicitations for public input, I have concluded that the lower rates of uranium transfers described herein are appropriate in the near term,” Moniz wrote in his determination.

“I have therefore determined to permit transfers only at the lower rates described below. To avoid disruption to the projects involved, the Department will continue transferring at the pre-existing rates for approximately two months.”

Of the 2,705 metric tons allowed during 2014, about 2,055 were allocated for the Piketon work, an amount that translates to somewhere between $210 million and $270 million depending on price fluctuations on the market at the time of sale.

The secretarial determination limits that amount to 2,000 metric tons this year and 1,600 metric tons for 2016 and each of the following years unless a new determination is made.

Based on the current uranium market, the roughly 22 percent decrease could result in a loss of around $45 million — an amount that could end up higher or lower depending on what the price is at the time of sale.

A spokesperson for primary site contractor Fluor-B&W Portsmouth said the company cannot comment on the energy secretary’s determination.

In a memo obtained by The Gazette that was sent May 5 to the nearly 2,000 employees involved with the cleanup work from site director Dennis Carr, however, the company says it’s too early to speculate on what the 2016 impact will be on operations.

Carr does note that the 2016 congressional appropriation that appeared to bring enough stable funding for next year’s operations will not be enough to offset the losses through the barter program.

“Our work is now cut out for us,” Carr wrote. “We must again rally to try to offset this forecasted $45 million shortfall in FY16 through increased austerity measures this (fiscal year), potentially deferring work scope planned for this year until later years, and increased communications with the Ohio delegation and appropriators.”

The Ohio congressional delegation, across party lines, has been very vocal in advocating for adequate funding. In a letter sent to Moniz late Thursday by Republican Sen. Rob Portman and Reps. Brad Wenstrup and Bill Johnson, the three take the DOE and the administration to task for the funding roller coaster the project has been on in recent years.

“The result of underfunding this clean-up project is instability, inefficiency and reduced effectiveness,” the letter reads. “Some have estimated that the unstable economic environment results in annual lost productivity of $120 million, caused in part by the contractor’s inability to stick to a multi-year plan.”

The letter asks the DOE to explain how work is supposed to proceed at current staffing levels with the funding reduction in 2016 and attacks the administration for finding somewhere else to make a cut after the House of Representatives approved $213 million for the Piketon operations in the 2016 Energy and Water Development Appropriations bill May 1 — a $48 million increase over what the administration had requested in its budget.

“Unfortunately, DOE’s latest Determination could undo the progress being made by Congress in keeping this project on track by reducing a critical funding source for the D&D work by tens of millions of dollars,” the letter states. “Clearly, such a reduction in funding is not compatible with the Administration’s stated goal of completing the work by 2024.”

The work to clean up the former Cold War-era uranium enrichment facility is being done to prepare the land for future development use.

cbalusik@nncogannett.com

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Twitter: @Chris_Balusik