Perry Seeks To Award A No-Bid Contract To A Failing Business With Ties To Russia
According to The Houston Chronicle, the attention of Senate Republicans has been drawn to Energy Secretary Rick Perry’s decision to give "a $115 million no-bid contract to develop an advanced nuclear enrichment facility in Ohio."
The Department of Energy said it would award the contract to a former government-owned contractor, Centrus Energy. In 2013, Centrus stopped enrichment operations and then declared Chapter 11 bankruptcy.
Senator John Barrasso (R-Wyo.), the chairman of the Senate Environment and Public Works Committee, mentioned to Perry that the company has not always fulfilled federal contracts for nuclear fuel. He questioned whether the money Centrus received would go towards supporting TENEX, the Russian state-owned firm where Centrus buys enriched uranium.
Barrasso wrote, “This contract appears to use American taxpayer funding to bailout Centrus, an unsuccessful business that relies on commercial relationships with Russian state-owned corporations to stay in business. Congress did not authorize or fund this project.”
Centrus was privatized in 1998 and operated until 2013 when a tsunami in Japan caused nuclear plants to shut down, and uranium prices to fall.
While Centrus took in over $1.9 billion in revenues in 2012, the next year the revenues were below $200 million, according to U.S. Securities and Exchange Commission filings. As was common practice in the U.S., the business centered on importing enriched uranium from abroad, including from Russia. Behind Canada and Australia, Russia is the third largest supplier of fuel, and nuclear plants in the U.S. import over 90% of their fuel.
The Ohio contract was pitched by the Energy Department as a way to develop a U.S. supply chain for uranium required by some nuclear reactors. This more concentrated uranium has both commercial and military potential.
Deputy Energy Secretary Dan Brouillette tweeted about the contract, saying The department is “on its way to creating fuel for the next generation of advanced reactors critical to our future.”
In a statement, Senator Rob Portman (R-Ohio) said “Getting Piketon back to its full potential benefits the skilled workforce here, the surrounding local economy, and strengthens national energy and defense security. I want to thank the Department of Energy and the Trump administration for reconsidering the Obama administration’s decision to end the domestic uranium enrichment demonstration program.”
According to Barrasso’s letter, the Obama administration canceled its 2015 contract with Centrus for a similar project after the work was deemed of “minimal incremental value.”
Now, the only companies with the capabilities to produce the enriched uranium are in Russia.
The Energy Department said that Centrus subsidiary American Centrifuge Operating was the only firm that qualified, although other enrichment companies do have the ability to perform the project.