House preserves 'backdoor earmark' for Ohio nuclear facility

WASHINGTON -- A $150 million "backdoor earmark" for a uranium processing facility survived a vote in the House on Friday, keeping the Ohio project alive while the company seeks $2 billion in federal loan guarantees.

The 121-300 vote followed an after-midnight debate in which members of the Ohio delegation rallied to the defense of USEC, the struggling company fighting for federal support for its American Centrifuge Project. The $150 million is part of a larger $300 million package proposed by the Obama administration after USEC failed to qualify for a requested $2 billion loan guarantee.

The provision in the defense programs bill doesn't name USEC and therefore isn't an earmark under new House rules barring members from steering pork to their districts. But it does make the money available for "domestic national-security-related enrichment technologies," and USEC subsidiary United States Enrichment Corp. is the sole American-owned provider of enriched uranium to the government.

"This company should actually be renamed the United States Earmark Corp.," said Rep. Ed Markey, D.-Mass., a longtime nuclear critic.

Rep. Steve Pearce, R-N.M., compared USEC to the failed solar company that went bankrupt after a $535 million loan guarantee from the Energy Department. "USEC is Solyndra on steroids," he said.

Pearce's district includes centrifuges operated by URENCO, which invested $3 billion in a centrifuge plant in New Mexico— without federal subsidies.

URENCO is owned by the Dutch government and German and British energy companies.

Rep. Michael Turner, R-Ohio, a nuclear supporter who represents a district neighboring USEC, said the issue is one of national security. "This is for our nuclear weapons programs. This is not like for a truck fleet," he said. "If you're not going to be doing domestic, you're going to have the United States be subject to foreign sources, and again these are critical components for our nuclear infrastructure and our nuclear Navy."

The vote follows a high-stakes, behind-the-scenes lobbying effort this week. Rep. Jean Schmidt, R-Ohio, sent a letter to colleagues this week pointing out URENCO's ties to A.Q. Khan, the nuclear scientist that stole centrifuge technology secrets for Pakistan. URENCO lobbyist Clint Williamson accused USEC supporters — which include Republicans and Democrats — of "picking winners and losers" in the uranium market.

The provision still must be negotiated with the Senate, which included similar language in a 2012 transportation bill.

The measure wouldn't require the Energy Department to spend the money, but Energy Secretary Steven Chu has already said he would do so if given a "clear signal" from Congress. "Over the last three years, the Obama administration has worked tirelessly to support the American Centrifuge Plant," said DOE spokeswoman Jen Stutsman in a statement before the vote. "The administration is focused on advancing this technology in a way that protects the taxpayers."

Time is running out for USEC. In regulatory filings, it has said its ability to borrow money to keep the existing test centrifuges running — about $15 million a month — will run out in June. Its stock price closed at an all-time low 68 cents Thursday, a level that could cause it to be unlisted from the New York Stock Exchange. And credit rating agency Standard & Poor's downgraded its debt this week to CCC+, citing its high debt levels.

Still, the Department of Energy announced a separate deal this week to keep the company's Cold War-era uranium processing plant in Paducah, Ky., running for at least another year. The DOE gave 9,075 metric tons of uranium to a Washington state utility, which will contract with USEC to process it for its nuclear plants.