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Uranium Enrichment

Question: In your testimony (p. 64) you have stated that "the key to the survival of the U.S. uranium enrichment business is to get near-term prices down into the competitive range by aggressively reducing costs." And yet, DOE is also proposing to return $100 million to the Treasury as part of the repayment in 86, and $235 in 87. Except to liquidate your stockpile and inventory of uranium, can the program afford to reduce price and to make payments at the same time?

Answer: The FY 1987 budget request does enable the Department to reduce our selling price from $125 to $119 per SWU and yet make a $235 million payment to the Treasury. This was achievable by our cost reduction efforts and by introducing an initiative to transfer the AVLIS technology to the private sector. Also, we will be reducing our enriched uranium inventory to minimum working levels over the next 2 years and overfeeding some uranium from our natural uranium stockpile. We believe future prices can be further reduced and payments made to the Treasury with continuation of cost reduction activities and successful transfer of the AVLIS technology.

Question: Your budget request assumes that the private sector would pick up the development of the world's most advanced enrichment technology, the AVLIS process, in 1988. I understand that it will require at least $800 million to continue the feasibility study and demonstration process and another $1.2 to $1.5 billion for capital outlay to start the project. Do you have any takers from private sectors?

Answer: The Department will be evaluating appropriate means to assess private sector interest in participating in uranium enrichment activities. To date the Department has not identified any private sector participants willing to invest in AVLIS technology and deployment.

Question: Will the fund to be used for repayments be otherwise used to update your production facilities and to apply AVLIS process?

• Answer: In the past, funds that could have been used for payments to the Treasury were used for reinvestment in uranium enrichment. However, the Administration is proposing that these funds be paid to the Treasury to assist in deficit reduction activities.

Subseabed Disposal

Question: Mr. Rusche said that DOE may desire to "go back" to the Subseabed Project in the future. How much would it cost to restart the Subseabed Project if it is terminated this year?

Answer: To carry the subseabed program through an assessment of concept feasibility to the level previously envisioned, it is estimated to require at least $100 million based on 1986 dollars. Because of the steps aurrently being taken for the orderly closeout of the subseabed program,

including the documentation of results available to date and the storage of specially fabricated test equipment, additional costs for start-up are expected to be minimized. Although additional costs for equipment and repetition of work is expected to be minimized, some losses caused by dissolving and reconstituting research teams will be unavoidable.

Question; Mr. Rusche mentioned the institutional and political questions regarding subseabed disposal. What is DOE doing to address these issues? Specifically, how does DOE plan to address these issues in the London Convention?

The DOE, through its prime contractor Sandia National Laboratories, has been conducting a limited program to address institutional and political issues related to the subseabed disposal optim. This program has been coordinated with similar activities undertaken by the Seabed Working Group of the NEA/OECD. The subseabed program has provided expertise on technical, environmental, and scientific matters for the U.S. government representatives to the London Dumping Convention; expert advice an legal, political, and institutional issues has similarly been provided. However, because the subseabed program is entering an orderly closeout, it is necessary to devote the program resources to documenting and finalizing, to the extent possible, the scientific research performed to date. Therefore, support for the U.S. delegation to the London Dumping Convention will be limited for both scientific and institutional issues. However, to the extent possible, we will continue to support requests for technical assistance and, of course, will continue to monitor activities of foreign entities in the areas of subseabed disposal.

Question: What is the present financial status of the Subseabed Project? Have all of the funds authorized and appropriated for FY 86 been made available so that the Project can be terminated in an orderly fashion? I understand that the Subseabed Project needs to reprogram $1.2 million of equipment funds to expenses. Has this reprogramming request been filed? If not, when will the necessary reprogramming request be filed? I understand that the Subseabed Project has $1.4 million in its current financial plan available for forward financing and that the Project needs these funds in order to complete an orderly termination. Has DOE made the funds available? If not, why?

Answer: All the funds authorized and appropriated for the Subseabed program for FY 1986 have been made available to the appropriate financial plan allottees. The Office of Civilian Radioactive Waste Management (OCRWM) developed a detailed list of commitments for the balance of funds in operating and equipment necessary to provide for an orderly termination of the project, and prepared a draft request for reprogramming incorporating the list of commitments. OCRWM is working closely with the Department's Office of Budget and it is anticipated that the request for reprogramming will be submitted in the near future. The $1.4 million for forward financing has been made available.

SUBCOMMITTEE RECESS Chairman HATFIELD. Whereupon, at 3:15 p.m., the subcommittee was recessed, subject to the call of the Chair.

(Whereupon, at 3:15 p.m. Thursday, March 13, the subcommittee was recessed to reconvene at 2 p.m. Thursday, March 20.)




Washington, DC.
The subcommittee met at 2:07 p.m. in room SD-192, Dirksen Senate
Office Building, Hon. Mark O. Hatfield (chairman) presiding.
Present: Senators Hatfield, Abdnor, and Burdick.


eto Ordeo receive for the. W


Chairman HATFIELD. The hearing will come to order.

The purpose of our hearing this afternoon is to receive testimony from the five Federal Power Marketing Administrations for the last time (laughter)—which are within the subcommittee's jurisdiction. We extend a warm welcome to each of the Administrators and look forward to receiving your status reports and statements on your 1987 budgets.

Also, we welcome again Donna Fitzpatrick, Assistant Secretary for Conservation and Renewable Energy, as our first witness today.

Madam Secretary, we will receive your testimony first, and then if you have other schedules, we will excuse you or you may remain, depending on your testimony. (Laughter.]

We will put your full statement in the record, and you may proceed to summarize.

Miss FITZPATRICK. Thank you, Mr. Chairman and members of the subcommittee.

INTRODUCTION OF ASSOCIATES I am pleased to be here today with the power marketing Administrators to present their budget requests for fiscal year 1987. First, I would like to introduce my colleagues. Beginning on your right is Mr. Robert Cross, who is Administrator of the Alaska Power Administration; Mr. Peter Johnson, Administrator of the Bonneville Power Administration; Mr. Harry Geisinger of the Southeastern Power Ad

pend have other sary, we will recergy, as our

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