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REVISION OF THE URANIUM ENRICHMENT SERVICES CRITERIA

The Uranium Enrichment Services Criteria describe the terms and

conditions under which the Department provides enrichment

services. The criteria were first established in 1966 and have changed very little since. Revision was needed so that DOE could more effectively compete in the dramatically altered enrichment market of the 1980's and beyond.

In 1986, the Department submitted revised criteria for
Congressional review. Congress accepted the revised criteria

with certain restrictions as part of the FY 1987 Continuing

Resolution. In the new criteria, key aspects of the original criteria remain unaltered--prices will be set to recover, over a reasonable period of time, the costs of providing enrichment services. Although additional flexibility is allowed in contracting with individual customers, services will still be provided on a nondiscriminatory basis with similarly situated customers receiving identical treatment. DOE is now better able to respond to the unique needs of different market sectors and extend the current range of customer services. The criteria constitute a crucial part of the Department's efforts to

restructure the enterprise and implement our competitive strategy

by providing ground rules that are compatible with today's

marketplace.

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The Department believes strongly in enhancing and maintaining the value of this national asset, whether in the public or private sector. Since Congress has traditionally held this same view, the basis would seen to exist for forging a consensus as to the proper role for this country's uranium enrichment business through the remainder of the century.

Mr. Chairman, this completes my statement. My colleagues and I would be pleased to respond to your questions at this time.

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Dr. A. David Rossin was confirmed by the Senate on August 16, 1986, as Assistant Secretary for Nuclear Energy, U.S. Department of Energy (DOE). In this capacity, Dr. Rossin serves as the principal policy advisor to the Secretary of Energy and Administration spokesman on nuclear energy. Dr. Rossin manages an organization responsible for reactor development and demonstration programs; advanced reactor research and development; programs to develop and apply advanced nuclear systems technology to space and defense power systems, including power supply systems for the President's Strategic Defense Initiative; remedial action and waste technology activities; and manages the U.S. uranium enrichment enterprise.

Prior to his nomination by the President and subsequent Senate confirmation to this position, Dr. Rosin directed the Nuclear Safety Analysis Center at the Electric Power Research Institute (EPRI) in Palo Alto, California. From 1972 to 1981, Dr. Rossin served in various positions at Commonwealth Edison Company in Chicago, Illinois. His last position was Director of Research for the company. While associated with Commonwealth Edison, Dr. Rossin served on a number of corporate, industry, and scientific advisory committees and chaired advisory Committees for the EPRI Safety and Analysis Department and the Systems and Materials Department.

Dr. Rossin served in a variety of technical and managerial positions at Argonne National Laboratory from 1955 to 1972. His work at Argonne involved the design of experimental power reactors, particularly the radiation shielding design and safety analyses. During this period, Dr. Rossin began research on the effects of intense neutron radiation on the steel pressure vessles surrounding the core of light water reactors. This field of research was the subject of his doctoral thesis and numerous publications. He served for ten years on Argonne's Reactor Safety Review Committee, one year as its Chairman.

A native of Cleveland, Ohio, Dr. Rossin received his B.S. degree in engineering physics from Cornell University in 1954; his M.s. degree in nuclear engineering from the Massachusetts Institute of Technology in 1955; his M.B.A. degree from Northwestern University in 1963; and, his Ph.D. degree in metallurgy from Case Institute of Technology in 1966.

Dr. Rossin and his wife, Sandra, have two daughters.

August 1986

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John R. Longenecker is the Deputy Assistant Secretary for Uranium Enrichment, Office of Nuclear Energy, U.S. Department of Energy (DOE). In this position Mr. Longenecker is responsible for overall management and execution of the Uranium Enrichment Program including gaseous diffusion, atomic vapor laser isotope separation, and enrichment business operations.

The position involves the direction and administration of Government programs that provide uranium enrichment services to domestic and nonU.S. customers. Mr. Longenecker is responsible to the Assistant Secretary for Nuclear Energy for directing the operation of the Government enrichment facilities in Oak Ridge, Tennessee; Paducah, Kentucky; and Portsmouth, Ohio. He directs the development of advanced technologies for the enrichment of uranium.

Prior to this assignment, Mr. Longenecker served as Director of the Office of Breeder Demonstration Projects, where he was responsible for program management of the clinch River Breeder Reactor Plant (CRBRP) Project, licensing of breeder demonstration projects, and conceptual design of the Liquid Metal Fast Breeder Reactor (LMFBR) Large Scale Prototype Breeder.

Previously, Mr. Longenecker served as Director, Plant Development Division; Chief, Conceptual Design Study Division of Reactor Research and Technology; Technical Assistant to the Program Director, Nuclear Energy of DOE; and in various capacities in the Energy Research and Development Administration's (ERDA) Division of Reactor Research and Development, including Special Assistant to the Director, Acting Assistant Project Director for Procurement for CRBRP, Acting Chief of the CRBRP Mechanical Components Branch, and Reactor Engineer for various LMPBR projects. He joined the Atomic Energy Commission in 1973 and served in the Division of Reactor Development and Technology prior to the formation of ERDA in 1975, and DOE in 1977.

Prior to entering Government service, Mr. Longenecker was employed by the Ford Motor Company as a research engineer and by the firm of John Robinson and Associates as a structural engineer.

Mr. Longenecker received both his B.s. and M.S. degrees in engineering mechanics from the Pennsylvania State University.

Mr. Longenecker was born in Port Royal, Pennsylvania, on July 27, 1949, and resides in Monrovia, Maryland with his wife Bonnie and daughter Laura.

February 1986

Dr. Rossin. Modest modifications to the budget authority schedule could be accommodated without impacting the projects' schedules.

Mr. BEVILL. At what minimum production level (power and SWU) will the Paducah plant have to be operated in order to achieve the benefits of the proposed new substation and process inventory control systems? At what level does the Department project this facility will operate over the next 10 fiscal years?

Dr. Rossin. In the future, the Paducah plant is expected to be operated at a base power level of 735 to 750 megawatt-years. This power will be purchased from EEInc. Additional power will be purchased, as needed, above this base level. The substation project will provide the capability to purchase power from non-TVA sources above the 735 to 750 megawatt-year level, and thus generate about 3 million SWUs per year.

In order to fully utilize the expanded process inventory control system, the Paducah plant would be operated at a base level of 1,000 to 1,200 megawatts with production of 4.1 to 4.9 million SWUs per year.

These two projects are scheduled to be completed in the early 1990s. Based on the current long range operating plan, the Paducah plant will be operating at sufficient power levels to fully utilize these projects beginning in FY 1989 and continue to do so at least through the Year 2000.

ENVIRONMENT, HEALTH AND SAFETY Mr. Bevill. Please provide, for each major facility, a breakout of costs for the past 5 years associated with meeting environmental, health, safety, security and related requirements.

Dr. Rossin. The actual operating and capital costs in FY 1982 through FY 1986 for environmental, health, safety, safeguards and security, and related requirements are shown in two tables that I would like to insert for the record.

[The information follows:)

ACTUAL URANIUM ENRICHMENT COSTS FOR ENVIRONMENTAL, HEALTH AND SAFETY AND RELATED

REQUIREMENTS

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Total

31.4

31.1

502

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