PRE-HEARING QUESTIONS AND ANSWERS

RELATING TO THE

MARCH 5, 1985 HEARING

BEFORE THE

HOUSE COMMITTEE ON INTERIOR AND INSULAR AFFAIRS

SUBCOMMITTEE ON ENERGY AND THE ENVIRONMENT

WITNESS: JOHN S. HERRINGTON

SECRETARY OF ENERGY

Answer:

Why didn't the Department of Energy submit its Utility
Services contract to the Congress for review?

Prior to release, the Department determined that the issuance of the Utility Services (US) contract was within the Department's existing statutory authority including Section 161v of the Atomic Energy Act. The Department considered its actions proper and necessary to prevent

further erosion of the U.S. position in the world enrichment market.

Consistent with DOE practice to keep the Congress and
enrichment customers fully informed on significant matters,
the Department did provide timely notice of its intentions
to affected customers and the appropriate segments of the
Congress. The need for a revised uranium enrichment
contract was discussed with Congress during an October,
1983 hearing before the Subcommittee on Energy Conservation
and Power. A copy of the draft contract, a fact sheet
outlining its major features and objectives, and a copy of
the letter transmitting the contract to industry for comment
were sent to cognizant authorization and appropriations
committees by DOE on December 30, 1983. Briefings, informal
discussions, and telephone communications were conducted
with congressional members, committees, and staff that
requested additional information. The final contract form
was sent to customers on January 18, 1984. On the same
date, the contract, a descriptive fact sheet, and a copy of

URANIUM ENRICHMENT

1.a.cont'd

the letter transmitting the final contract to the customers were sent to all cognizant committees.

URANIUM ENRICHMENT

1. cont'd

Answer:

b. Please include an explanation of why the Department
views its contract as being consistent with Section
161(v) of the Atomic Energy Act.

The Department considers the manner of adoption was consistent
with the provisions of Section 161(v) of the Atomic Energy
Act, as well as the Department's prior practices in developing
and executing uranium enrichment contracts. Section 161(v)
of the Atomic Energy Act of 1954, as amended, provides that
"the Commission shall establish criteria in writing setting
forth the terms and conditions under which services provided
under this subsection shall be made available," and that before
the Commission establishes such criteria "the proposed criteria
shall be submitted to the Joint Committee, and a period of 45
days shall elapse while Congress is in session...unless the
Joint Committee by resolution in writing waives the conditions of
all or any portion of such 45-day period."

The Department considers that contract provisions are within

the existing criteria. The legislative history of Section 161(v) indicates that the Uranium Enrichment Services Criteria,

among other things, are to include the general features of

standard contracts for uranium enrichment services but

Section 161(v) was not intended to require formal review by the

Joint Committee of all the terms and conditions of the contracts

themselves.

Answer:

What preparations are being made in the event that the contract is struck down by the court in the Western Nuclear suit?

The Department considers it took lawful and proper actions in the issuance of the Utility Services contract and, accordingly, has a high level of confidence that its

position will prevail in the District Court. We expect that

the lawsuit will be vigorously defended, including

appropriate appellate review in the event of an adverse

decision in the District Court.