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

GAO discussed proposed legislation that would restructure the Department of Energy's (DOE) uranium enrichment program as a government corporation. GAO noted that: (1) DOE had limited ability to act quickly in a competitive enrichment market and to set flexible prices; (2) DOE did not recover total costs of its uranium enrichment program through revenues; (3) each of the proposed bills sanctioned an earlier DOE writeoff of unrecovered costs and eliminated all or most of the remaining unrecovered costs; (4) DOE estimated that the corporation could generate over $3 billion in gross income by the year 2000 and over $8 billion by 2008; (5) the cost of related environmental cleanup and decommissioning would discourage privatization of the corporation and could also threaten its survival; (6) DOE estimated in 1988 that decommissioning costs for the three uranium enrichment plants could total $3 billion; (7) DOE did not completely identify or characterize the waste sites at enrichment plants, and past experience indicated that those costs increased as more information became available; (8) DOE did not set aside any revenues for future cleanup costs; and (9) the administration's 1992 budget requested funds for completing the demonstration of the DOE atomic vapor laser isotope separation process but did not contemplate funding program activities, such as site selection. GAO believes that the proposed bills would: (1) establish clear objectives for the enrichment program; (2) allow it to operate in a more businesslike manner in a competitive market; and (3) address longstanding problems.