A REVIEW OF DOE PADUCAH SITE 

OPERATIONS 

HEARING 

BEFORE THE 

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE 

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED NINTH CONGRESS 

SECOND SESSION 

JANUARY 19, 2006 

Serial No. 109-60 

Printed for the use of the Committee on Energy and Commerce 

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

U.S. GOVERNMENT PRINTING OFFICE 

WASHINGTON : 2005 

For sale by the Superintendent of Documents, U.S. Government Printing Office 

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26-814PDF 
COMMITTEE ON ENERGY AND COMMERCE 

JOE BARTON, Texas, Chairman 

RALPH M. HALL, Texas 

MICHAEL BILIRAKIS, Florida 

 Vice Chairman 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

PAUL E. GILLMOR, Ohio 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

CHARLIE NORWOOD, Georgia 

BARBARA CUBIN, Wyoming 

JOHN SHIMKUS, Illinois 

HEATHER WILSON, New Mexico 

JOHN B. SHADEGG, Arizona 

CHARLES W. “CHIP” PICKERING, Mississippi 

 Vice Chairman

VITO FOSSELLA, New York 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

CHARLES F. BASS, New Hampshire 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE FERGUSON, New Jersey 

MIKE ROGERS, Michigan 

C.L. “BUTCH” OTTER, Idaho 

SUE MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

GRESHAM BARRETT, South Carolina 

JOHN D. DINGELL, Michigan 

 Ranking Member 

HENRY A. WAXMAN, California 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

EDOLPHUS TOWNS, New York 

FRANK PALLONE, JR., New Jersey 

SHERROD BROWN, Ohio 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

ALBERT R. WYNN, Maryland 

GENE GREEN, Texas 

TED STRICKLAND, Ohio 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MIKE DOYLE, Pennsylvania 

TOM ALLEN, Maine 

JIM DAVIS, Florida 

JAN SCHAKOWSKY, Illinois 

HILDA L. SOLIS, California 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

BUD ALBRIGHT, Staff Director 

DAVID CAVICKE, General Counsel

REID P. F. STUNTZ, Minority Staff Director and Chief Counsel

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS 

ED WHITFIELD, Kentucky, Chairman 

CLIFF STEARNS, Florida 

CHARLES W. “CHIP” PICKERING, Mississippi 

CHARLES F. BASS, New Hampshire 

GREG WALDEN, Oregon 

MIKE FERGUSON, New Jersey 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

JOE BARTON, Texas 

 (EX OFFICIO)

BART STUPAK, Michigan 

 Ranking Member 

DIANA DEGETTE, Colorado 

JAN SCHAKOWSKY, Illinois 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

HENRY A. WAXMAN, California 

JOHN D. DINGELL, Michigan 

 (EX OFFICIO)

(II) 
CONTENTS 

Page 

Testimony of: 

Rispoli, James, Assistant Secretary of Environmental Management, U.S. Department 

of Energy ...................................................................................................................... 11 

Paxton, William F., Mayor, Paducah, Kentucky ............................................................... 29 

Orazine, Daniel, County Judge Executive, McCracken County, Kentucky ...................... 34 

Hughes, Michael, President, Bechtel Jacobs, LLC ............................................................ 40 

Ervin, Rob, President, United Steel Workers Local 5-550 ................................................ 47 

Additional material submitted for the record: 

Ervin, Rob, President, United Steel Workers Local 5-550: 

Letter dated February 16, 2006, to Hon. Ed Whitfield, enclosing response for 

the record............................................................................................................. 65 

Hughes, Michael, President, Bechtel Jacobs, LLC: 

Letter dated February 21, 2006, to Hon. Ed Whitfield, enclosing response for 

the record.............................................................................................................. 66 

Rispoli, James, Assistant Secretary of Environmental Management, U.S. Department 

of Energy: 

Letter dated March 20, 2006, to Hon. Ed Whitfield, enclosing response for the 

record.................................................................................................................... 68 

Rispoli, James, Assistant Secretary of Environmental Management, U.S. Department 

of Energy: 

Letter dated March 2, 2006, to Hon. Ed Whitfield, enclosing clarification for the 

record.................................................................................................................... 78 

Sigal, Jill A., Assistant Secretary, Congressional and Intergovernmental Affairs, U.S. 

Department of Energy: 

Letter dated March 16 2006, to Hon. Ed Whitfield, enclosing inserts for the 

record on behalf of James Rispoli........................................................................ 80 

(III) 

(1) 

A REVIEW OF DOE PADUCAH SITE 

OPERATIONS 

THURSDAY, JANUARY 19, 2006 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON ENERGY AND COMMERCE, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

Paducah, KY. 

The subcommittee met, pursuant to notice, at 10:00 a.m., at the 

Paducah City Hall, 300 South 5th Street, Paducah, Kentucky, Hon. Ed 

Whitfield [chairman] presiding. 

Members Present: Representatives Whitfield and Stupak. 

Staff Present: Mark Paoletta, Chief Counsel for Oversight and 

Investigations; Dwight Cates, Professional Staff Member; Jonathan 

Pettibon, Legislative Clerk; and Edith Holleman, Minority Counsel. 

MR. WHITFIELD. If I could have everyone’s attention, please. I 

certainly want to thank all of you for being here this morning. As you 

know, this is the Subcommittee on Oversight and Investigations for the 

full Committee on Energy and Commerce, and today we’re going to have 

a hearing on simply reviewing DOE’s Paducah site operations. 

Before we start, I certainly want to welcome Holly Healy, who is a 

district aide for Congressman John Shimkus of Illinois, who serves on 

the Energy and Commerce Committee. 

And T.C. Freeman is here representing Senator Jim Bunning. We 

appreciate your being here, T.C. 

I will tell you this is the first field hearing that the Subcommittee on 

Oversight and Investigation of the House Energy and Commerce 

Committee has convened since I was chosen Chairman, and I cannot 

think of a better forum than here in Paducah to review DOE’s Paducah 

site operations. 

I certainly want to welcome the Ranking Member on the 

Subcommittee, Mr. Bart Stupak of Michigan, for whom it was not easy 

to get to Paducah, because he was caught on the tarmac in Detroit for a 

number of hours yesterday. But I really appreciate the extra effort that 

he made to get here, and I’ve enjoyed serving with him on this 

Subcommittee. 

And, of course, I want to welcome all of our distinguished witnesses 

and guests, and I will introduce the witnesses in just a moment. But 

we’re here today to focus on several issues relating to the operation of 

the Paducah Gaseous Diffusion Plant, a plant that has been operational 
2

for over 50 years and which today is the sole remaining domestic 

provider of enriched uranium which fuels our nation’s 103 nuclear power 

plants. 

Since my election to Congress over 11 years ago, I really cannot 

recall a time when my staff and I were not involved in some way on an 

issue relating to the plant and/or its workforce. As a matter of fact, one 

of my very first legislative endeavors was the enactment of two 

amendments in the USEC Privatization Bill to protect workers’ pension, 

health benefits, and collective bargaining rights during the transition 

from USEC, the quasi government entity, to USEC, the private 

corporation. 

Since that time, we’ve enacted legislation to restore the arming and 

arrest authority of the security guard force. We’ve examined foreign 

competition and the impact of the Russian HEU Deal on our on domestic 

uranium industry. And as a result of DOE’s acknowledgement that 

workers on the plant were unknowingly exposed through the years to 

dangerous levels of radiation and other toxic substances, we’ve enacted 

two separate entitlement compensation programs to provide financial 

assistance and health care benefits to workers who became ill as a result 

of their exposure to radiation, beryllium, silica, and other toxic 

chemicals. And to date, I might mention that 2,599 workers here in the 

Paducah area from the Paducah plant have received compensation for 

health care in an amount totaling $277 million plus their medical 

benefits. 

We’ve also enacted legislation to require the construction of two 

depleted uranium hexafluoride conversion facilities, one at Portsmouth 

and one in Paducah, to safely convert the contaminated material in over 

37,000 cylinders. And this, of course, will create a lot of new jobs. 

We secured the seed money for the former Paducah Area Community 

Reuse Organization to build, design, and construct an eight-county 

industrial park complex. And despite USEC’s decision to build their 

next generation centrifuge plant at Portsmouth, we’re happy to say that 

the Paducah plant is still in operation, and we hope that it will continue 

to be so for some time. 

Of course, every year during the appropriation process we are 

challenged to continue the money to continue the cleanup of this plant. 

And together we are preparing for the ultimate closure of the plant and 

the economic impact that closure will have on McCracken County and 

the surrounding communities, and we want to be prepared for that if and 

when that time does come. 

But today we’re focused on four basic issues. First, I would like to 

discuss matters relating to the Department’s interpretation of Section 633 

of the Energy Policy Act of 2005. I helped draft this provision last year 
3

along with Representative Ted Strickland of Ohio. We intended to 

protect and secure the pension and health care benefits for employees at 

the Portsmouth and the Paducah sites when DOE changes its contractors 

at those facilities or when hourly employees transfer from employment at 

USEC to employment with a DOE contractor. 

Last week, the Department of Energy provided us with a lengthy 

interpretation of this provision -- and I would say we do not agree with it. 

I look forward to working out these differences with the Department, and 

we will seek further clarification through additional legislation if 

necessary. I would also say that there is a possibility there may be a 

lawsuit on this issue. 

Second, we will examine the status of the transition to a new 

environmental remediation contractor at the Paducah site. 

Environmental remediation work at Paducah will continue to grow over 

the next several years as the Department focuses more attention on 

environmental cleanup, facility decontamination and decommissioning, 

and waste management. 

Last year, the Department awarded the Paducah environmental 

remediation contract to North Wind Paducah Cleanup Company, but 

later retracted the award and reopened the bidding process in response to 

several protests that had been filed. Finally, on December 27th of last 

year, the Department awarded this contract to Paducah Remediation 

Services. 

Third, we want to explore opportunities to sell the approximately 

9,700 tons of nickel at the Paducah site. The inventories of nickel are 

significant, and it is a valuable commodity. Although the nickel is 

slightly contaminated with uranium, it would be a mistake in my view to 

simply treat this valuable asset as a waste to be shipped to a disposal 

facility. 

I’m encouraged that the Department has included a requirement in the 

new environmental remediation contract to develop and evaluate 

alternate uses of the nickel ingots and acquire competitive bids for its 

reuse. It is my understanding that the contractor is required to present its 

evaluation of the options to reuse the nickel to DOE by July 30th, 2006. 

I hope there is no significant delay in this effort, and I suggest that a 

portion of the net proceeds be allowed to go to the local community as it 

focuses on reindustrialization as a result of the anticipated closure of this 

plant. 

And, finally, I want a full update today on DOE’s efforts to 

investigate possible phosgene contamination in uranium hexafluoride 

cylinders at the site. Last year, the DOE Inspector General issued a 

memo regarding the status of potential phosgene contamination inside 
4

cylinders of uranium hexafluoride stored at Paducah, Portsmouth, and 

East Tennessee Technology Park. 

A concern was raised regarding several canisters that were acquired 

from the Army Chemical Warfare Service that were formerly used to 

store phosgene, a chemical warfare agent. DOE moved quickly to assess 

the 2,541 cylinders in question, and almost all of these canisters, it’s my 

understanding, have been cleared of phosgene contamination based on 

documentation showing they were washed or evacuated before DOE 

obtained them. 

At the Paducah site -- and I want to verify this -- all canisters have 

been cleared of phosgene contamination except for 14. That is my 

understanding. DOE does not believe these last few canisters have any 

phosgene, but they may have been unable to locate documents to prove 

it. 

DOE has a plan to sample these last remaining cylinders within the 

next several weeks, and I must say that I have been impressed with the 

Department’s quick response to this issue. And in this instance, I think 

DOE has clearly prioritized the health and safety of the Paducah 

community. 

I’m specifically pleased that DOE Assistant Secretary for 

Environmental Management, James Rispoli, is here today to provide 

testimony on these and other issues, and I certainly look forward to 

hearing from him. On the second panel, we have several distinguished 

witnesses that are each interested in Paducah issues, as all of us here are. 

So I thank each of you for joining us today. I hope this will be a 

productive hearing that will provide some important answers for us. 

[The prepared statement of Mr. Whitfield follows:] 

PREPARED STATEMENT OF THE HON. ED WHITFIELD, CHAIRMAN, SUBCOMMITTEE ON 

OVERSIGHT AND INVESTIGATIONS

This is the first field hearing the Subcommittee on Oversight and Investigations of 

the House Energy and Commerce Committee has convened since I was chosen 

Chairman, and I will admit that I may have used my own prerogative as Chairman to hold 

the first field hearing in my District! 

I want to welcome the ranking member on the Subcommittee, Mr. Bart Stupak of 

Michigan, to the 1st District of Kentucky and I want to welcome our distinguished 

witnesses and guests. 

We are here today to focus on several key issues relating to the operation of the 

Paducah Gaseous Diffusion Plant–a Plant that has been operational for over fifty years 

and which today is the sole remaining domestic provider of enriched uranium which fuels 

our nation’s 103 nuclear power plants. 

Since my election to Congress over 11 years ago, I can hardly recall a moment when 

my staff and I were not working on some issue directly related to the Plant and/or its 

workforce. As a matter of fact, one of my first legislative endeavors was the enactment 

of two amendments in the USEC privatization bill to protect workers’ pensions, health 
5

benefits, and collective bargaining rights during the transition from USEC the quasigovernmental entity to USEC, the private corporation. 

Many of you here today have worked side by side with me on a myriad of issues 

affecting the Plant and the surrounding community. 

Together, we have lived through privatization. 

Together, we have enacted legislation to restore the arming and arrest authority of the 

security guard force. 

Together, we have fought foreign competition and the impact of the Russian HEU 

deal on our own domestic uranium enrichment industry. 

Together, we have lived through the revelation and DOE’s acknowledgment that 

workers at the plant were unknowingly exposed to dangerous levels of radiation and 

other toxic substances. 

 Together, we have enacted two separate entitlement compensation programs to 

provide financial assistance and health care benefits to workers who became ill as a result 

of their exposure to radiation, beryllium, silica or other toxic chemicals. To date, 2,599 

workers from the Paducah Plant have received compensation totaling $277 million, plus 

medical benefits. 

 Together, we have enacted legislation to require the construction of two depleted 

uranium hexaflouride conversion facilities–one in Portsmouth and one in Paducah–to 

safely convert the contaminated material in our 37,000 cylinders, while creating new 

jobs. 

Together, we secured the seed money for the former Paducah Area Community 

Reuse Organization to build, design and construct an 8-county industrial park complex. 

Together, we have survived USEC’s decision to build their next generation 

centrifuge plant in Portsmouth, rather than Paducah. 

Together, we fight the good fight during the annual appropriations process for more 

clean-up money, funds to finance the conversion project, and funds to continue the stateof-the art medical monitoring program we have in place at Paducah today. 

And together, we are preparing for the ultimate closure of the Plant and the economic 

impact that closure will have on McCracken County and the surrounding communities. 

The issues surrounding the Plant are as complex and far-reaching today, as they were 

the first time I ever toured the facility. Today, we are focused on four such issues. 

First, I would like to discuss matters relating to the Department’s interpretation of 

Section 633 of the Energy Policy Act of 2005. I helped draft this provision last year 

along with Representative Ted Strickland. We intended to protect and secure the pension 

and health care benefits for employees at the Portsmouth and Paducah sites when DOE 

changes its contractors at these facilities, or when hourly employees transfer from 

employment at USEC to employment with a DOE contractor. Last week the Department 

provided us with a lengthy interpretation of this provision that we do not agree with. I 

look forward to ironing out our differences with the Department on this matter, and I may 

seek further clarification through additional legislation, if necessary. 

Second, I would like to discuss the status of the transition to a new environmental 

remediation contractor at the Paducah site. Environmental remediation work at Paducah 

will continue to grow over the next several years as the Department focuses more 

attention on environmental cleanup, facility decontamination and decommissioning, and 

waste management. Last year, the Department awarded the Paducah environmental 

remediation contract to North Wind Paducah Cleanup Company, but later retracted that 

award and re-opened the bidding process in response to several protests filed by losing 

bidders. Finally, on December 27th of last year, the Department awarded this contract to 

Paducah Remediation Services. I am pleased that the Department is moving forward on 

environmental cleanup work, but I want to make sure the transition from Bechtel Jacobs 

to Paducah Remediation Services runs smoothly. 
6

Third, I would like to discuss opportunities to finally sell the approximately 9,700 

tons of nickel at the Paducah site. This has been an issue of great interest to me for 

several years. The inventories of nickel are significant, and it is a valuable commodity. 

Although the nickel is slightly contaminated with uranium, it would be a mistake to 

simply treat this valuable asset as a waste to be shipped to a disposal facility. I am 

encouraged that the Department has included a requirement in the new environmental 

remediation contract to “develop and evaluate alternate uses of the Nickel ingots and 

acquire competitive bids for its reuse.” It is my understanding that the contractor is 

required to present its evaluation of the options to reuse the nickel to DOE by July 30, 

2006. I hope there is no significant delay in this effort, and I suggest that a portion of the 

net proceeds from any sale should be returned to the Paducah and McCracken County 

communities for enhanced cleanup efforts and to promote economic development and 

create new jobs to mitigate the impact of the anticipated closure of the gaseous diffusion 

plant. Also, I call on the Department to make whatever changes may be necessary to the 

moratorium on metals recycling established by former Secretary Richardson. 

Lastly, I want a full update on DOE’s efforts to investigate possible phosgene 

contamination in uranium hexafluoride cylinders at the site. Last year, the DOE 

Inspector General issued a memo regarding the status of potential phosgene 

contamination inside cylinders of uranium hexafluoride (UF6) stored at Paducah, 

Portsmouth, and the East Tennessee Technology Park. A concern was raised regarding 

several canisters that were acquired from the Army Chemical Warfare Service that were 

formally used to store Phosgene, a chemical warfare agent. DOE moved quickly to 

assess the 2,541 cylinders in question, and almost all of these canisters have been cleared 

of phosgene contamination based on documentation showing they were washed or 

evacuated before DOE obtained them. At the Paducah site, all canisters have been 

cleared of phosgene contamination except for 14 canisters. DOE does not believe these 

last few canisters have any phosgene, but they have been unable to locate documents to 

prove it. DOE has a plan to sample these last remaining cylinders within the next several 

weeks. I am impressed with the Department’s quick response to this issue. In this 

instance, I think DOE has clearly prioritized the health and safety of the Paducah 

community. 

 I am pleased that DOE Assistant Secretary for Environmental Management James 

Rispoli is here today to provide testimony on these and other issues, and I look forward to 

hearing from him. On the second panel we have several distinguished witnesses that are 

each as interested in Paducah issues as I am. I thank each of you for joining us today, 

and I look forward to your input.

MR. WHITFIELD. And, Mr. Stupak, I’ll recognize you. 

MR. STUPAK. Thank you, Mr. Chairman. 

The Energy and Commerce Committee and this subcommittee has a 

long history of holding hearings concerning the problems of workers and 

the communities that have for so many years been the home of 

America’s nuclear weapons production facilities. Many of them were 

located in small isolated communities, and as these facilities are being 

shut down, difficult problems of environmental cleanup and 

redevelopment must be addressed. 

I know that you, Mr. Chairman, Mr. Shimkus from Illinois and our 

colleague Mr. Strickland from Ohio have been particularly successful in 

dealing with some of these issues for your constituents. I applaud your 

leadership on this issue. 
7

I look forward to hearing today’s witnesses. I am, as I’m sure you 

are, very interested in learning why the Department of Energy wants to 

take the pension and medical benefits away from a handful of former 

USEC workers who might go to work for the new cleanup contractor 

despite legislation we passed in the Energy Committee. 

In the Energy Bill that was passed this last summer -- and I was a 

conferee on that committee -- I thought Congress made it very clear that 

these workers, their pension and medical benefits shall and must be 

preserved. 

I also want to hear more from the Department about its plans for 

selling tons of uranium-contaminated nickel stored here in Paducah. 

Members of this committee were very active in stopping the previous 

plan to do so, to sell this nickel, at Oak Ridge because the Department 

could not enforce its promise to restrict the future of this nickel once it 

was sold. 

As a result, the Department issued a memorandum -- excuse me. The 

Department issued a moratorium, which is still in effect, on recycling. 

I’m very curious to see if today’s plan is just recycling the same old 

proposal or if there is actually a new one. 

Mr. Whitfield, I appreciate your hospitality. When I landed here 

yesterday in Nashville, there was snow. It made me feel at home. And I 

really appreciate the sunshine today. So I’ll be back. 

But, seriously, I appreciate the opportunity to be in your community 

and to meet your community leaders and the workers who have given so 

much of their life to our great country. I stand with you in support of 

these workers and hopefully in the future redevelopment of Paducah. So 

I look forward to hearing our witnesses today. 

And thank you again, Mr. Chairman. 

MR. WHITFIELD. Well, thank you, Bart. And I might add we took 

him to Patti’s last night, so he enjoyed that. 

You know, when you watch the national news media today, you do 

get the impression that in Washington everything is totally partisan, but 

as you know, Bart Stupak is a Democrat from Michigan. I think that our 

subcommittee has been particularly effective at trying to remain 

bipartisan. We don’t agree on everything, obviously, but we do focus on 

the issues and respectfully disagree -- but frequently we also agree, and I 

think that’s a positive thing. 

I would say to you that the Oversight and Investigations 

Subcommittee -- this is an investigative hearing, obviously -- we’ve 

always had the practice of taking testimony under oath. Our witnesses 

today, first of all, on Panel I is Mr. James Rispoli, who is the Assistant 

Secretary for Environmental Management for the United States 

Department of Energy. 
8

Mr. Rispoli, we welcome you here today, and as you heard, this is an 

investigatory hearing, and I’m assuming that you do not have any 

objection to testifying under oath. I would also advise you that under the 

Rules of the House and the Rules of the Committee, you are entitled to 

be advised by legal counsel. 

And do you desire to be advised by legal counsel today? 

MR. RISPOLI. No. 

MR. WHITFIELD. Okay. Well, in that case, if you would please rise 

and raise your right hand, I’d like to swear you in. 

[Witness sworn.] 

MR. WHITFIELD. Thank you. Well, Mr. Rispoli, you’re now under 

oath. You are recognized you five minutes for your statement. 

TESTIMONY OF JAMES RISPOLI, ASSISTANT SECRETARY 

FOR ENVIRONMENTAL MANAGEMENT, U.S. 

DEPARTMENT OF ENERGY 

MR. RISPOLI. Thank you, Mr. Chairman. 

Good morning, Mr. Chairman, Congressman Stupak and staff 

members who are here today. I’m pleased to be here to answer your 

questions on the status of the Department of Energy’s Environmental 

Management Program at the Paducah Gaseous Diffusion Plant. I again 

thank you and your subcommittee for the ongoing support that you have 

provided for the Paducah cleanup project. 

This is my second visit to Paducah in the five months since I was 

sworn in as Assistant Secretary in August. I’ve had the opportunity to 

become familiar with the site, with the cleanup accomplishments and the 

cleanup challenges that remain here at Paducah, as well as other issues 

that face the Department, site employees and the committee. 

During my brief tenure, I’ve been impressed with the dedication of 

the employees and appreciate the progress they have made in cleaning up 

the environmental legacy of the Cold War. 

The last two years have been a time of change and transition for the 

Paducah site, not only through contractor transitions, but also through 

alterations in the familiar site landscape. Even as buildings are being 

removed and waste disposed, new construction is transforming what was 

an empty field into a state-of-the-art plant to convert and stabilize 

depleted uranium. 

To place our upcoming efforts in perspective, here are some recent 

Paducah program highlights. Our most recent news, as you mentioned, 

is that the Department awarded a $191.6 million remediation services 

contract on December the 27th to Paducah Remediation Services. This is 
9

a joint venture of Portage Environmental, a Native American-owned 

small business, and Shaw Environmental Services. 

We anticipate a smooth transition from the outgoing contractor, 

Bechtel Jacobs, to PRS. The process of awarding this contract has taken 

longer than expected due in part to protests that were filed following the 

Department’s initial selection of a winning bidder a year or so prior. 

Bechtel Jacobs, its employees and subcontractors have continued to 

make progress in the cleanup program during procurement of the new 

contract, and the overall cleanup project is on track to meet the 2019 

cleanup completion date. 

A new infrastructure services contractor, Swift & Staley, successfully 

transitioned following the contract award in March 2005 and assumed 

full responsibility for its work scope in June 2005. 

The Depleted Uranium Hexafluoride Conversion Project construction 

is well underway through a contract with Uranium Disposition Services, 

LLC. Under the approved project baseline schedule, conversion 

operations are expected to start by June 2008. In the next few months, 

the construction workforce will increase to between 150 to 200 

employees. When conversion operations begin in 2008, the workforce 

will be stabilized at about 150 employees. 

Some of the key highlights here at Paducah include: We emptied the 

last of 17 outside material storage areas, which completed removal of a 

number of potential sources of contamination. Overall, 75 percent of an 

estimated 865,000 cubic feet of DOE material storage area materials 

have been characterized and 30 percent of the material disposed. We are 

scheduled to complete disposal of all these materials by 2010. 

We’ve completed approximately 30 percent of about 44,000 tons of 

overall scrap metal removal work. We anticipate sending the last 

shipment of classified scrap metal to the Nevada Test Site by the end of 

March 2006, just a couple of months from now. We expect to complete 

the entire scrap metal removal by the third quarter of 2007. 

Other major milestones we’ve met in 2005 and so far in 2006 include: 

We’ve disposed of 4,000 tons of scrap metal, including 1,400 tons of 

scrap metal from D-Yard. The D-Yard work is 95 percent complete. 

And we’ve disposed of over 60,000 cubic feet of legacy waste in 2005. 

This brings me to one of the key success stories I’d like to mention 

that increases our confidence that we can reach our cleanup 

commitments here at Paducah, and that is the Department’s relationship 

with the Commonwealth of Kentucky and the United States 

Environmental Protection Agency. 

In 2003, the Department signed a Letter of Intent and Regulatory 

Agreement with the Commonwealth of Kentucky and subsequently 

modified our Site Management Plan consistent with the terms of both of 
10

these agreements. This has established a foundation upon which 

significant progress has been achieved. 

A major event that is tangible evidence of this progress is the 

issuance in August 2005 of a Record of Decision to remove 

trichloroethylene, or TCE, that is located in the area of the C-400 

cleaning building, which is the main source of contaminants in the 

northwest groundwater plume. This action will significantly reduce a 

primary source of off-site contamination. We plan to begin field 

operations in 2007 with completion by 2010. 

The Department and the regulators are at varying stages on other 

response actions to address hazards and mitigate risks here at the 

Paducah site. 

Mr. Chairman, let me turn to a recent issue that you asked us to 

address, and that is the possible presence, though unlikely, of residual 

phosgene in 2,541 depleted uranium cylinders stored at the Paducah site 

and at Portsmouth, Ohio; and Oak Ridge, Tennessee. 

After the Management Alert that you mentioned was issued by the 

Inspector General on September 30th, 2005, we took immediate action to 

ensure no imminent safety and health concerns existed for plant workers 

or the community. A rigorous review was performed to determine 

whether past operational practices eliminated any possible residual 

phosgene in the cylinders in question. 

This review process eliminated any question of residual phosgene in 

all but 25 cylinders total. Of the 25 cylinders, 14 are here at Paducah, 10 

are at Portsmouth, and 1 is at Oak Ridge. 

A detailed plan to safely and properly characterize and disposition 

these cylinders was developed and implemented. Workers’ safety and 

health requirements are in place to protect workers dispositioning these 

cylinders. And, in fact, just a few days ago, we completed the field 

sampling of the 10 cylinders at Portsmouth, and none of them had any 

evidence of phosgene. 

All cylinders containing uranium hexafluoride or depleted uranium 

hexafluoride have been subjected to and will continue to undergo a 

prescriptive and rigorous monitoring and surveillance program. At no 

time will cylinders of concern be introduced into the depleted uranium 

hexafluoride conversion plant process that would put either the workers 

or the public at risk. 

Paramount to our success at all these areas is safety. It’s our top 

priority. Safety affects all involved; the federal employees, the 

contractor employees, the subcontractor employees, the site and the 

community. 

Here at Paducah, the Bechtel Jacobs company and its subcontractor 

workforce can take great pride in reaching a major safety milestone here, 
11

and that is more than 3 million safe work hours without a case of a lost 

workday away from the job. 

The message I continually stress to our field staff and our contractors 

is that no schedule, no milestone is worth any injury to our workforce. 

Every worker deserves to go home as healthy as she or he was when they 

arrived for work each day on the job. 

It’s my goal to lead the Environmental Management Organization as 

a results-driven high performance organization. We’re instilling a 

project management mind-set that will be ingrained in all we do. We’ve 

taken major strides in integrating safety. Now we must do the same with 

project management. The management tools we’re using to both manage 

and provide oversight must be integral. Our success will depend on the 

ability to build up this rigor. 

We’re using industry standards as well as DOE guidance in all of our 

project and business practices, and I am now personally conducting 

quarterly reviews of all of our environmental and management projects 

and have directed my senior staff to carry out monthly reviews. I believe 

this new focus will be the key to our success with strong and effective 

project management. 

I’m committed to work with all interested parties to resolve issues 

and will work with this committee and the Congress to address any of 

your concerns or interests. DOE, our regulators, the communities and 

our contractors are partners in this effort. Our success relies on this 

partnership. We all will succeed, or we all fail together. 

Your continued support is vital to maintaining the positive 

momentum here at Paducah. I look forward to a continuing dialogue 

with you and your staff, and I will be pleased to answer any questions the 

subcommittee may have. 

Thank you. 

[The prepared statement of James Rispoli follows:] 

PREPARED STATEMENT OF JAMES A. RISPOLI, ASSISTANT SECRETARY FOR ENVIRONMENTAL 

MANAGEMENT, U.S. DEPARTMENT OF ENERGY

Good Morning, Congressman Whitfield and members of the Subcommittee. I am 

pleased to be here today to answer your questions on the status of the Department of 

Energy’s Environmental Management program at the Paducah Gaseous Diffusion Plant. 

I would like to thank you and your Subcommittee for the ongoing support of the Paducah 

cleanup project. 

 This is my second visit to Paducah in the five months since I was sworn in as 

Assistant Secretary in August. I have had the opportunity to become familiar with the 

site—the cleanup accomplishments and the cleanup challenges that remain, as well as 

other issues that face the Department, site employees and the community. During my 

brief tenure, I have been impressed with the dedication of the employees, and appreciate 

the progress they have made in cleaning up the environmental legacy of the Cold War. 
12

The last two years have been a time of change and transition for the Paducah site, not 

only through contractor transitions, but also through alterations in the familiar site 

landscape. Even as buildings are being removed and waste disposed, new construction is 

transforming what was an empty field into a state-of-the-art plant to convert and stabilize 

depleted uranium. 

To place our upcoming efforts in perspective, here are some recent Paducah program 

highlights: 

• Our most recent news is that the Department awarded a $191.6 million remediation 

services contract on December 27, 2005, to Paducah Remediation Services LLC 

(“PRS”). This is a joint venture of Portage Environmental, a Native-Americanowned small business, and Shaw Environmental Services. We anticipate a smooth 

transition from the out-going contractor, Bechtel Jacobs Company, to PRS. The 

Department intends that the new contractor maintain a productive and flexible 

workforce, minimize the cost and impacts of the transition, and promote practices 

that result in stable collective bargaining relationships. To that end, the new 

contract provides graded preferences for current employees and former employees in 

hiring for vacancies for non-managerial positions during the first six months after 

the effective date of the contract. The process of awarding this contract has taken 

longer than expected, due in part to protests that were filed following the 

Department’s initial selection of a winning bidder. 

• Bechtel Jacobs, its employees, and subcontractors have continued to make progress 

in the cleanup program during the procurement process, and the overall cleanup 

project is on track to meet the 2019 cleanup completion date. 

• A new Infrastructure Services contractor, Swift & Staley, successfully transitioned 

following a contract award in March 2005, and assumed full responsibility for its 

work scope in June 2005. 

• The Depleted Uranium Hexafluoride (DUF6) Conversion Project construction is 

well under way through a contract with Uranium Disposition Services, LCC. Under 

the approved Project Baseline schedule, conversion operations are expected to start 

by June 2008. This schedule was revised in 2005 to incorporate the effect of 

increased safety features for seismic protection and containment of hazardous 

chemicals. Schedule contingency was also added to increase confidence that the 

Project’s major milestones will be met. In the next few months, the construction 

workforce will increase to between 150-200 employees. When conversion 

operations begin in 2008, the workforce will be sustained at about 150 employees. 

 Some of the key highlights on the Paducah project include: 

• We emptied the last of 17 outside DOE Material Storage Areas, which completed 

removal of a number of potential sources of contamination. Overall, 75% of an 

estimated 865,000 cubic feet of DOE Material Storage Area materials has been 

characterized and 30 percent of the materials disposed. We are scheduled to 

complete disposal of all these materials by 2010. 

• Although we have experienced delays in shipping waste for disposal, we are 

aggressively pursuing our goals. We have completed approximately 30 percent of 

about 44,000 tons of the overall scrap metal removal work. DOE recently approved 

a change in subcontractor to expedite scrap metal shipping, reducing the projected 

time and costs for the remainder of the activity. We anticipate sending the last 

shipment of classified scrap metal to the Nevada Test Site by the end of March 

2006. We expect to complete the entire scrap metal removal by the third quarter of 

FY2007. 

• In FY 2005, we were able to accelerate several Paducah cleanup activities: 
13

o Completed demolition of the C-603 Nitrogen Facility, 5 years ahead of 

schedule 

o Disposed of 3 million pounds of uranium tetrafluoride (UF4), 2 years 

ahead of schedule 

o Removed the C-410 Hydrogen Holder Tank, 8 years ahead of schedule 

o Accelerated by about three years disposal of nearly 700 cubic meters of 

legacy waste stored outdoors 

o Expedited work on three additional inactive facility removal activities, 

which will accelerate completion on these activities by one to four years. 

Other major milestones we met in FY2005 and have met so far in FY2006 include: 

• Disposed of about 4,025 tons of scrap metal, including approximately 1,428 tons of 

classified scrap metal from D-Yard. The D-Yard work is now 95 percent complete. 

• Signed the C-400 Groundwater Record of Decision 

• Completed Southwest Plume field work and issued the Draft Site Investigation 

Report to the regulators 

• Issued the Remedial Action Completion Report for the North-South Diversion Ditch 

• Completed the C-746-S&T Landfill investigation and submitted final report to 

regulators 

• Disposed of 60,563 cubic feet of legacy waste in FY 2005 

• Submitted Remedial Design Work Plan for C-400 Remedial Action. 

This brings me to one of the key success stories in the past two years that increases 

our confidence that we can reach our cleanup commitments—and that is the 

Department’s relationship with the Commonwealth of Kentucky and the U.S. 

Environmental Protection Agency. For several years, cleanup progress was hindered by 

disputes over milestones, regulatory compliance, and cleanup approaches. In 2003, the 

Department signed a Letter of Intent and a regulatory agreement—called the “Agreed 

Order”—with the Commonwealth of Kentucky, and subsequently modified our Site 

Management Plan consistent with the terms of both of these agreements. This has 

established a foundation upon which significant progress has been achieved. 

A major event that is tangible evidence of progress is the issuance in August 2005 of 

a Record of Decision to remove trichloroethylene, or TCE, that is located in the area of 

the C-400 Cleaning Building, the main source of the contaminants to the Northwest 

Groundwater Plume. This action will significantly reduce a primary source of off-site 

contamination. DOE plans to begin field operations in 2007, with completion of 

treatment by 2010. The Department and our regulators are at various stages on other 

response actions to address hazards and mitigate risks at the Paducah site. 

Mr. Chairman, let me turn to a recent issue that you have asked me to address: the 

possible presence, though unlikely, of residual phosgene in 2,541 depleted uranium 

cylinders stored at the Paducah site, and at Portsmouth, Ohio, and Oak Ridge, 

Tennessee. After the Department received a September 30, 2005, Inspector General 

Management Alert, we took immediate action to ensure no imminent safety and health 

concerns existed for plant workers or the community. A rigorous safety review process 

was employed to determine whether past operational practices eliminated any possible 

residual phosgene in the cylinders in question. This review process eliminated any 

question of residual phosgene in all but 25 cylinders. Of the 25 cylinders, 14 are stored at 

Paducah, 10 are stored at Portsmouth, and 1 is stored at Oak Ridge. A detailed plan to 

safely and properly characterize and disposition these cylinders has been developed and 

is being implemented. Worker safety and health requirements are sufficient to protect 

workers dispositioning these cylinders. All cylinders containing Uranium Hexafluoride 

or Depleted Uranium Hexafluoride have been subject to, and will continue to undergo, a 
14

prescriptive and rigorous monitoring and surveillance program. At no time will cylinders 

of concern be introduced into the Depleted Uranium Hexafluoride Conversion Plant that 

would put either facility workers or the public at risk. 

Paramount to our success in all areas of our project is safety—it is our top priority. 

Safety affects all involved—federal employees, contractor and subcontractor employees, 

the site, and the community. Here at Paducah, the Bechtel Jacobs Company and its 

subcontractor workforce can take pride in reaching a major safety milestone—more than 

3 million safe work hours without a case of a lost workday away from the job. Also, the 

Depleted Uranium Hexafluoride Conversion Project construction crews logged nearly 

250,000 safe work hours. All employees contributed to these records by taking seriously 

their personal responsibility to work safely. We will continue to maintain and demand 

the highest safety performance in all that we do. The message I have stressed to my field 

staff and to our contractors is that no schedule, no milestone, is worth any injury to our 

workforce. Every worker deserves to go home as healthy as she or he was when arriving 

each day on the job. 

It is my goal to lead EM as a results-driven high performance organization. We are 

instilling a rigorous project management mindset that will be ingrained in all projects. 

We have taken major strides in integrating safety; now we must do the same with project 

management. The management tools used to manage cost and schedules must be used to 

manage and provide oversight integrally. Our success will depend on our ability to build 

in this rigor. We will target the shortcomings in our project management by using both 

DOE and industry standard project management and business management processes. I 

am personally conducting Quarterly Reviews of all EM projects, and have directed that 

my senior staff carry out monthly project reviews. This includes fully implementing our 

management systems, following through on corrective actions, and better applying risk 

management principles—that is identifying project uncertainties, developing mitigation 

measures and contingency, and holding action officers accountable for their resolution. I 

believe that this approach will be the key to our success with strong and effective project 

management. 

Complementing these refinements, we must ensure that our projects are managed by 

highly skilled, competent and dedicated leaders and staff workers, both Federal and 

contractor, who have the responsibility and the authority to meet the EM program’s 

objectives. In 2003, the Department formed the Portsmouth/Paducah Project Office, 

reporting directly to my office, to provide greater management focus and accountability. 

I believe this office has contributed to the Department’s ability to recognize and address 

issues more rapidly. We will continue to streamline the relationship between the field 

and headquarters to enable the whole EM program to be more effective in its oversight 

role. I believe that if you have the right people in the right job with the right skills, they 

should be empowered to execute their responsibilities and be accountable for their 

decisions and outcomes. 

I believe that by taking these steps we will be in a position to address the challenges 

that lay before us. I am committed to work with all interested parties to resolve issues 

and will work with this committee and the Congress to address any of your concerns or 

interests. DOE, our regulators, the communities and our contractors are partners in this 

effort. This partnership goes far beyond the limits of a contract or an agreement. Our 

success relies on this partnership. We are in this together—we all succeed or we all fail 

together. Your continued support is crucial to maintain the momentum that has so 

painstakingly been achieved. 

I look forward to a continuing dialog with you and your staff. I will be pleased to 

answer any questions the subcommittee may have on this subject. 
15

MR. WHITFIELD. Well, thank you, Secretary Rispoli, and I do 

appreciate your mentioning phosgene in your opening statement. I see 

Jim Malone is here today, and he wrote a story on October 25th, 2005, in 

“The Courier Journal” about this issue. And the story, my 

understanding, stemmed from an internal memo dated September 30th, 

2005, by Alfred Walter, a DOE Assistant Inspector General for 

Inspections and Special Inquiries. 

And, in fact, I’d like to introduce this memo, this internal memo, for 

the record. 

Do you have a copy of it? 

What I’d like to know, when did DOE first learn of the possible 

presence of phosgene in some of the cylinders at Paducah, Portsmouth 

and Oak Ridge? 

MR. RISPOLI. Mr. Chairman, indeed, it was -- I remember the day 

when that memo was delivered to us. And as you point out, it was 

September the 30th. It’s called a Management Alert, the IG, where they 

have an issue that arises that is of, you know, special-type interest, such 

as this one. They have a protocol for issuing such a Management Alert. 

And so I learned of it on September the 30th. 

As I indicated in my opening remark, using our chain of command, 

we initiated the process to review the potential to see whether there was 

any truth to the allegation that there might be phosgene or residual 

phosgene here, at Portsmouth and at Oak Ridge. 

MR. WHITFIELD. Did DOE begin its analysis of those cylinders at the 

time you first learned of the possibility of phosgene, or was action taken 

only when the internal memo was obtained by the press and the story 

made public? 

Were you all taking action before that story? 

MR. RISPOLI. Mr. Chairman, yes, we were. As I say, my 

management style is that every day I have a wrap-up, a short meeting 

with the chief operating officer. All of our site managers work for her. 

And as soon as we heard of this allegation, we directed that a review 

process be put in place. 

And, in fact, I understand by talking with her -- her name is Dr. Ines 

Triay -- that she was getting very regular and periodic updates from the 

site managers at both here -- Mr. Bill Murphie, who’s here today -- as 

well as the site manager at Oak Ridge on the status of the actions to go 

through that process. 

MR. WHITFIELD. Now, in that internal memo, it indicates that one of 

the most catastrophic safety consequences might occur when phosgene is 

introduced into the uranium hexafluoride conversion process. And as 

you know, we’re in the process of building these two depleted uranium 

conversion facilities right now, one at Paducah and one at Portsmouth. 
16

When was the contractor on those projects -- in other words, UDS -- 

when were they notified of this possible problem? 

MR. RISPOLI. I cannot answer that question, Mr. Chairman. I don’t 

know. But given that UDS is not yet in the process of that conversion, 

there was obviously no imminent hazard. I think the concern to us was 

to conclusively determine whether or not there were any trace amounts 

of phosgene. 

I might also mention -- I’m not a chemist, but my understanding is 

that the report of catastrophic consequences would be if a cylinder that 

was filled with phosgene went into a conversion process that was not 

designed for that. And so we are basically looking for either at zero or 

for trace amounts of phosgene. 

And as I indicated, just in the past couple of days, we finished the 

work at the Portsmouth site and found no evidence either of residual 

phosgene. 

MR. WHITFIELD. Well, you know, we all know that phosgene was a 

chemical used by the Germans in World War II and can be quite lethal. 

And as the Assistant Secretary responsible for this type of issue, 

based on your investigation thus far, is there any health and safety risk to 

the workers at the plant or the surrounding community? Is there any 

existing threat to them right now? 

MR. RISPOLI. I believe the correct answer is not to the best of our 

knowledge. And if I may just go on a bit to put it into context, we within 

the next few days will begin the sampling process for the 14 cylinders 

here in Paducah. I will tell you that, again, we found no evidence of 

even residual phosgene in the 10 cylinders at Portsmouth, and we have 

no reason to believe that we will find any residual phosgene here in the 

cylinders at Paducah, either. 

This is, again, the very end stages of a very rigorous review to ensure 

that there is, indeed, no hazard to the workers or to the public from the 

possibility of any residual phosgene in these cylinders. 

MR. WHITFIELD. Okay. Now, I would like to focus a little bit on this 

nickel issue. I know that Secretary Richardson and the Clinton 

administration issued the moratorium against a free release. 

I wrote a letter to Secretary Bodman on July 15th, 2005, about this 

issue, and I asked him two basic questions. Number one, I said, “Is the 

Department of Energy planning to lift the current ban and, if so, when?” 

And then I asked, “Are there any export restrictions on the sale of the 

contaminated nickel and, if so, what are they?” 

Now, I know that you can convey or sell this nickel. There are 

options other than just free release. So there are other options available 

to dispose of it without lifting the moratorium. 
17

But I will have to tell you, Mr. Secretary, that I was disappointed. I 

wrote that letter in July. I received a response in September, but it 

basically was a nonresponse, because when I read the response, I didn’t 

know any more than I did before I wrote the letter. Surely you all do 

have an internal legal memorandum on whether or not there are any 

restrictions on the exporting of this material, because I know there are 

many foreign companies interested in buying it. 

Would you comment on those two questions? 

MR. RISPOLI. The issue at hand is that the nickel is known to be what 

is called volumetrically contaminated with radioactive material, and 

basically that means it’s not on the surface, but it’s throughout the ingots. 

As you correctly pointed out, the moratorium was placed by Secretary 

Richardson because of concerns from the public about the possible end 

use of the nickel should it be sold, and that moratorium is still in place. 

The plan that we have to determine a path forward is to have our new 

contractor, as you mentioned earlier, evaluate for us the current market 

conditions, the current potential uses and present to the Department the 

options that would provide for a safe use of the nickel while providing 

some sort of a return. It’s not a waste material, obviously, but provide 

some sort of return to the taxpayer for the product. 

We expect, as you pointed out, to have the results of that evaluation 

of alternatives shortly, and we would be happy when we get that 

evaluation to share that with you. And I believe that will answer -- at 

that point, we will be able to answer the types of questions that you’re 

asking. 

MR. WHITFIELD. Well, I know that the Nuclear Regulatory 

Commission has failed to set any international standards for processing 

this, but is there any current legal restriction against your exporting this 

material? 

MR. RISPOLI. I am not aware of any regulatory constraints, and I will 

tell you that the amount of contamination, to the best of our knowledge, 

falls within DOE’s own internal guidelines for useful disposition of the 

material. So, again, what we’re doing is by asking the contractor to do 

this, doing a more current evaluation -- market conditions change, 

potential uses change -- to see what the options might be for a safe and 

acceptable use for the material. 

MR. WHITFIELD. Well, it just seems like from a common sense 

approach that, I mean, this material is quite valuable. It’s valued in the 

millions of dollars. In fact, it’s been estimated in the neighborhood of $3 

million dollars. 

Rather than see it just go to waste with the condition of our country 

today financially, and the deficits that we have and the need for local 

communities to have assistance in economic development, that I would 
18

urge you all to use every possibility to explore and hopefully be able to 

use this material in a restricted way. I’m not talking about a free release, 

but a restricted way. 

MR. RISPOLI. Yes, sir. 

MR. WHITFIELD. When Secretary Bodman was in Paducah not too 

long ago, he made the statement that the Department of Energy was not 

in the economic development business. Of course, if this plant closes, a 

lot of jobs are going to be lost. And so the Secretary of Energy and the 

Department may not be in the economic development business, but this 

community is in the business of economic development and will try to do 

everything they can to try and bring industry in and so forth. 

But the reason I mentioned his statement -- and I have a great deal of 

respect for the Secretary, but I know that at the Oak Ridge plant, DOE 

has, I understand, seven employees that are involved in 

reindustrialization issues at Oak Ridge. And as a matter of fact, it is my 

understanding that there was $150,000 in the FY 2005 budget for Oak 

Ridge for reindustrialization issues. 

I would ask you, and I would like to work with you to consider 

placing in the Department’s budget some money for reindustrialization 

processes here at this plant. I understand that the Member of Congress in 

that area is on the Appropriations Committee, and realistically we know 

what that means. But I would say even if you’re not on the 

Appropriations Committee, all of us represent taxpayers. 

If there’s going to be people involved in reindustrialization at that 

site, I do not see any reason why there shouldn’t be some people 

involved in the reindustrialization at this site. So I just wanted to point 

that out to you, and I would like to follow up and explore that in a better 

way if we can. 

Just a couple other questions, and then I’ll certainly turn it over to Mr. 

Stupak. But I do want to touch on this pension issue. I guess technically 

we refer to it as Section 633 of the Energy Policy Act. But, Ted 

Strickland, others and I had urged, pleaded with, and asked the 

Department of Energy in its RFP to provide protections for the 

portability of these pensions. 

We’re talking about the same site. We’re talking about basically the 

same people who, because of the change of contractors on a rather 

frequent basis -- there’s no reason that individuals doing the same work 

at the same site because the government changes the contract and the 

contractors change that they lose their pension benefits. 

I also understand that the Department of Energy wants to move to 

more 401(k)s and away from defined benefit plans, but I also know that 

we have a limited number of employees affected by what’s going on in 

Paducah. So it’s not an unlimited number, and I know that the economic 
19

impact, if a decision is made to protect these pensions, it’s not going to 

be huge. 

But when we were not able to be successful in our negotiations with 

the Department of Energy, we specifically put the language in the Energy 

Policy Act to protect those workers, and we made it very clear what our 

intent was and what we wanted to do. 

I’m assuming that the Department of Energy felt like the language we 

had was effective, because representatives of the Department of Energy 

lobbied extensively in the conference and before to defeat this provision, 

and knock this provision out. We were successful at keeping it in. 

President Bush signed the Energy Policy Act with that language in there. 

Then I can tell you we were really shocked when we found out that 

the Department had made a decision that, in spite of this language, 

because -- the position I think you’ve taken is because the remediation -- 

the new remediation company was not a signatory to the agreement of 

2005 that these employees will not be covered. I just find that hard to 

understand when the language is quite explicit. 

The Department knew what we were trying to do and tried to defeat 

it, so you must have felt like that the language was effective in 

accomplishing what we wanted to accomplish. Then after it’s adopted, 

you basically say, “Well, we’re not going to cover them.” 

What would be your response to that? 

MR. RISPOLI. Well, Mr. Chairman, I’ve been following the 

correspondence between the staff and the attorney who’s the Deputy 

General Counsel at the Department having to do with this. He’s the 

same gentleman who sent the letter to you, and we actually have copies 

of that letter here today, and we would be happy to submit that for the 

record, as well, and have copies for anyone else here who would like 

them. 

Obviously, pensions are an issue that affect the entire Department, 

not just the Environmental Management Program. And, thus, the 

pension issues are considered to be not only very important, but are 

clearly -- if you read the correspondence in this case, they’re very 

intricate. 

I’m not an attorney. I have not been personally a party to the 

development of the Department’s evaluation of the language, but I can 

tell you that DOE’s attorneys performed a thorough examination of 

Section 633 to arrive at their understanding of the legal effect of the 

statute. Again, that letter was provided -- it’s dated January 12th, was 

provided to you on the 13th, and we have copies here today. 

In sum, just so that those present know what the Departmental 

General Counsel analysis concluded, it was that under Section 633, 

USEC employees that were eligible on April 1st, 2005, to transfer from 
20

USEC into Bechtel Jacobs’ MEPP pension plan remained so eligible. 

USEC is not an MEPP pension plan, but, again, employees who were 

eligible -- USEC employees who were eligible on April 1st, 2005, 

remain so eligible. 

That transfer eligibility is defined in the MEPP itself, the documents, 

that define what is meant by a grandfathered employee. Under the MEP 

Plan documents, the only remaining category of USEC employees that 

meet the definition of grandfathered employees are those covered by a 

Bargaining Unit Transition Agreement, called the BUTA, without a 

terminal date for employment by Bechtel Jacobs or one of their first or 

second tier subcontractors that’s also a signatory. 

I point out that one of the incoming prime contractors, Swift & Staley 

Mechanical, previously was an MEPP sponsor and a party to the BUTA. 

So the USEC hourly employees that were hired by that contractor were 

eligible, indeed, as of April 1st, 2005, to transfer into this MEPP. 

But to your point, the General Counsel’s interpretation is that USEC 

employees hired by a different contractor are not guaranteed a right to 

transfer into the MEPP per their interpretation of the statute. 

If you do have further questions, again, as I mentioned, I’m not an 

attorney. The pensions policy implementation is not something I’m 

personally involved with, but I would be happy to take your questions for 

the record and provide them to DOE’s General Counsel for their action. 

MR. WHITFIELD. Well, you know, we know how lawyers are. I 

mean, I think you’re a lawyer. I’m not a lawyer. 

[Laughter.] 

MR. WHITFIELD. And they can frequently interpret things any way 

they want to fit their needs. 

But we know that USEC has their pension plan. Even UDS has a 

Single Employee Pension Plan. Bechtel Jacobs is the Multiple Employer 

Pension Plan administrator. Even Swift & Staley employees have their 

pensions protected. Paducah Remediation, I’m assuming, was not even 

in existence at that time, so they could not have been signatories. 

But I think our intent was quite clear, and we do intend to take some 

action. There’s either going to be a lawsuit or there’s going to be 

additional legislative solution, or hopefully DOE and its lawyers will 

revisit the issue and come to the common sense conclusion that it makes 

sense that these people have their pensions protected. 

So, Mr. Stupak, you’re recognized for whatever time you need. 

MR. STUPAK. Thank you, Mr. Chairman. 

Mr. Secretary, thanks for being here. Going back to the pension 

issue, if the Department awards a contract of almost $200 million in 

December ‘05 and this contract language or, I should say, the conference 

report was, I believe, signed on August of 2005 and this language was 
21

actually drafted even before that, why wasn’t this language then 

incorporated into that new contract that was given so these people would 

be protected? 

MR. RISPOLI. I don’t honestly have an answer to that question. I do 

not know why. I’d be happy to take that question for the record, but I 

don’t know why. 

MR. STUPAK. I think we should get the General Counsel in here. 

MR. WHITFIELD. Yeah. 

MR. STUPAK. I mean, how long have you been at DOE? 

MR. RISPOLI. Since August 10th. 

MR. STUPAK. Of this year, past year. 

MR. RISPOLI. Past year, yes, sir. 

MR. STUPAK. And you’re on a defined benefit plan, right? 

MR. RISPOLI. I’m in the -- no, sir. I’m not in a defined benefit plan. 

The government transitioned in the 1980’s from the old CSR defined 

benefit plan to a plan that’s now a defined contribution plan where the 

government contributes some money into a fund, I contribute into a fund, 

and when I retire, it’s kind of like a 401(k) type of a deal. 

But, no, sir, I’m not in a defined benefit plan as a civil servant. 

MR. STUPAK. Hmm, all right. I’ll disagree with you on that, but 

what you’ve just described is another part of the pension system. But 

anyways, all right. 

But this is a problem I think we have to get resolved one way or the 

other sooner. And if there’s different language we need, then your 

General Counsel has to let us know, because the intent of Congress was 

very, very clear these workers be taken care of. We know there would be 

transitions and new contractors and things like that. We want to make 

sure the workers are taken care of. And in the request for any kind of 

proposal to do a contract, I would hope you would include that in those 

requests. 

Getting to the new contract, why was there a change in contractor? 

According to your testimony, it looked like things were going well with 

Bechtel and all this. Why would we change contractors? 

MR. RISPOLI. Congressman, the Department, as you know, is 

working its Small Business Program to take into consideration not only 

legal requirements, but, also, typically, each administration has its own 

small business agenda and objectives. And Environmental Management, 

even before I joined as the Assistant Secretary, was very actively looking 

for opportunities to find ways to have more small business prime 

contractors. 

You may -- you probably do know that M&O subcontractors do not 

count against the small business goal by the way that the statutes are 

written. So Environmental Management several years ago began looking 
22

at ways to make these contracts more attractive and more accessible by 

small business. 

The decision to do that had absolutely nothing to do with the 

performance of the incumbent contractor. In fact, the incumbent 

contractor here has been very helpful in working with us on the transition 

planning, for example, and has been very much on board with that 

process. 

MR. STUPAK. But Shaw really isn’t a small business. 

MR. RISPOLI. They’re a sub, but Portage is, in fact, owned by a 

Native American. And the way that the laws, again, are written, it’s sort 

of like a mentor/protege-type arrangement. In other words, when you 

bring in a small business, it is not uncommon to have the support of 

others who are more expert in those fields. 

MR. STUPAK. Right. But we’ve seen this so many times with 

departments. They say it’s a small business, and what they do is get the 

contract and subcontract out to a big corporation. So -- well, it’s done. 

But I guess going back to the pensions, it seems like you’re strictly 

following the law here on these small businesses, but yet when it comes 

to the pension, we choose not to follow the law put forth by Congress in 

the Energy Policy Act of 2005. You can’t pick and choose which ones 

you want to follow. If you’re going to follow them, follow all of them, 

not part of them. 

Let me ask you this, this memorandum that the Chairman brought up, 

the memorandum of September 30th, are you familiar with it at all, this 

memorandum? 

MR. RISPOLI. The one from the Assistant General Counsel. 

MR. STUPAK. Yes. 

MR. RISPOLI. Yes, sir. 

MR. STUPAK. No, no. This is the one from the Office of Inspector 

General, the Management Alert on -- 

MR. RISPOLI. Oh, yes, sir, I am. Yes, sir. I have it here. 

MR. STUPAK. Okay. You’re familiar with it then. 

MR. RISPOLI. Yes, sir, I am. 

MR. STUPAK. The last paragraph on the first page, “Summary of 

Preliminary Findings,” says that in October 2000 was the first report of 

this phosgene. 

What happened between October of 2000 and September 30th of 

2005, the date of this memo? What happened on the phosgene for five 

years? Did it just sit there? 

I’m sure you must have gone back and looked to see what the history 

of this was? 

MR. RISPOLI. I have no idea. Again, I was not in the organization at 

that time. The first that I learned of the issue was when this was actually 
23

hand-carried to my office the day that it was signed. So I don’t have any 

personal knowledge. 

MR. STUPAK. You didn’t ask anyone in your office to go back and 

see what happened? 

I mean, I’d be concerned that if they knew about it since October of 

2000 by Department of Energy’s Office of Environmental, Safety and 

Health informed DOE and the contract officials of this possibility of this 

phosgene. I would have thought someone would at least go back and see 

what happened between October of 2000 and now. 

How do you address the issue? 

MR. RISPOLI. I understand your question, and I don’t even believe 

Mr. Bill Murphie, who’s our site manager, would know, because you 

weren’t back here in those days, either. So, again, I would take that 

question, if you permit me, for the record, because I don’t know the 

answer to that question. 

MR. STUPAK. Okay. Let me ask you this question, another issue the 

Chairman brought up, the letter to Secretary Bodman, and you talked a 

little bit about it, about redevelopment of this area much like we’ve done 

in Oak Ridge, DOE. 

Do you have any idea when you’re going to have some kind of 

answer as to if this moratorium is lifted or when we can expect some 

kind of decision? 

That’s what the Chairman asked you -- or, sorry, asked the Secretary 

in the first paragraph. “Is DOE planning to lift the current ban and, if so, 

when?” You said you were reviewing it and you have a contract review 

it. Do you anticipate a date when we might know when a decision will 

be made? 

MR. RISPOLI. Yes, sir. We expect by midsummer we will have the 

alternatives as presented by the contractor with possible uses for the 

nickel. As you know, the moratorium issued was broader than this nickel 

alone. 

MR. STUPAK. Correct. 

MR. RISPOLI. But the issue I’m discussing in particular is this 

particular nickel and whether or not it can be put into a constructive use 

that can yield some benefit back to -- 

MR. STUPAK. So by midsummer, we should have some decision. 

MR. RISPOLI. Yes, sir. And as I indicated, we would be happy to 

come up and brief you on that when we have those alternatives known to 

us. 

MR. STUPAK. Do you know now if the uses of this nickel or this 

contaminated nickel, has the uses in the marketplace changed since 

Secretary Richardson put the moratorium in? 

MR. RISPOLI. I would think so. 
24

MR. STUPAK. I’d think so, too. 

MR. RISPOLI. Yes, sir. It’s been over five years now since he put the 

moratorium in place, and I think this is the first, you might say, serious 

formal effort to re-evaluate the market conditions to see what can be 

done with this nickel. 

MR. STUPAK. Okay. If the ban is lifted and this nickel is sold, do 

you have any objections to a portion of the net proceeds returned to 

Paducah and McCracken County for cleanup efforts or for economic 

development. 

MR. RISPOLI. I would have to wait until I see what those alternatives 

are. I can tell you that as of this minute, the answer is I don’t have any 

blanket objection to any alternative or provisions. But I think when we 

see what the alternatives are, we’ll evaluate those at that time and see 

which way we can go. 

MR. STUPAK. Well, in the seven employees DOE employs now at 

Oak Ridge which is involved in this reindustrialization process, that’s 

economic development of the Oak Ridge site, isn’t it? 

MR. RISPOLI. I was not aware until that statement was made that we 

had that number of people. As you know, the Oak Ridge site is actually 

a science site with Environmental Management and NSA activity at it, 

and so that statement to me was new. I was not aware of that. I really 

don’t know. 

MR. STUPAK. Well, reindustrialization process, that’s really 

economic development, though, right? 

MR. RISPOLI. Yes, sir. 

MR. STUPAK. Okay. So if we just put the words “reindustrialized 

process” and put some money into the DOE budget, you have no 

problem of it coming to Paducah. Instead of calling it economic 

development, we’ll just rename it, right? 

MR. RISPOLI. What I can say is that I have visited now 15 of our 

offices and sites. I’ve met with many of those communities that are 

involved in economic development. I believe that generally speaking 

we’re working very well with them to try to find ways to provide 

benefits to the community because of the excess property, whether it be 

real property or personal property. 

So in a broad sense, Congressman Stupak, I believe that we are at all 

of our sites aggressively looking at ways to do those types of things 

when we find that we have both real and personal property that can be 

helpful to the community. 

MR. STUPAK. And I know you have been to a number of these sites, 

as you said, and I’m sure every site appreciated the workers there. And 

even in your testimony on page six, you talk about the partnership that 

has to be formed, and so I hope you’ll continue to work in that 
25

partnership with local communities and help them move forward with 

their site. 

Once, you know, an asset, a part of it is cleaned off and cleaned up 

and everything’s approved, cleanup, how long does it take usually to 

transfer that asset, a building or land, for local reuse, redevelopment? 

MR. RISPOLI. I believe, generally speaking, that when the regulators 

are satisfied and the gaining organization is satisfied, that process goes, 

you know, for the government relatively quickly. I would say within a 

year or so. It involves certain processes that have been followed in the 

disposition of property. 

But, again, we’ve been very supportive of helping effect those 

transfers in a timely way once the property is found suitable for that type 

of use. And I would imagine this committee knows of examples 

throughout the complex, as well, where that has happened. 

MR. STUPAK. In this process where you’re working with the local -- 

keep going back to this issue. Does it allow you, then, to return money 

back to the local community on any sale of an asset? 

MR. RISPOLI. Let me take the example of real property. When a 

reuse organization has a potential use for a building, real property type, 

the Department does have authority to transfer that asset at less than fair 

market value if it will contribute to the economic development of a 

facility that’s basically going to both be closed and where there will be 

an economic impact to the community. We have several statutory 

authorities with which we use those options. 

MR. STUPAK. Sure. That’s real property, but I was asking more 

about the nickel. That’s not real property. 

That’s more personal property, correct? 

MR. RISPOLI. I believe that the statute, at least one of them, that 

covers real property also covers personal property, nonreal property. 

MR. STUPAK. Okay. So returning part of those proceeds back to this 

community for either cleanup or redevelopment or reindustrialization, it 

would not be a problem, then, under the current DOE law? 

MR. RISPOLI. I would have to -- in all honesty, I would have to 

review the law myself. All of the examples, Congressman, that I’m 

personally familiar with have been real property. I’m not familiar with 

any so far that has been personal property. So I would have to review the 

language of those several statutes that permit us this authority. 

MR. STUPAK. Nothing further, Mr. Chairman. Thank you. 

MR. WHITFIELD. Thank you, Mr. Stupak. 

I do want to reiterate we do want to be careful what we say. So I had 

them check, and there are seven employees at the Oak Ridge facility that 

are involved in reindustrialization issues. And like I said, we just don’t 
26

want Paducah discriminated because we don’t have someone on the 

Appropriations Committee and they do. 

MR. RISPOLI. Yes, sir. 

MR. WHITFIELD. You would agree that the moratorium would not 

have to be lifted for a restricted use of the nickel? You would agree with 

that? The moratorium, it’s my understanding, was for a free release, and 

a restricted release could be done even with this moratorium in effect. 

MR. RISPOLI. I think the process that we have, this issue still has very 

high level attention at the Department, and I think that our path going 

forward would be to see what the viable options are, evaluate those 

options. Again, I would be happy to present those to you at the 

appropriate time. 

But, also, since the moratorium was placed by the Secretary, clearly, I 

would have to go back to that office with the options for the reuse of this 

nickel, as well. I don’t believe that I have that authority since the 

moratorium was signed at the Secretary’s level. 

MR. WHITFIELD. Well, I mean, we understand that there are a lot of 

vested interests that do not want this nickel used under any 

circumstances for any reason, but I think most of the people in this area 

-- and we’re the ones really affected by it -- we have very strong views 

on it, too. 

MR. RISPOLI. Yes, sir. 

MR. WHITFIELD. In conclusion, I would like to point out I do have 

the report language on the Energy Policy Act of 2005. And on the 

section about employee benefits, this is what’s in the report language: 

“This section provides that when DOE changes its contractors at the 

facilities or when hourly employees transfer from USEC to a DOE 

contractor or other contractor, the employees do not lose their accrued 

service credit or rights to transfer into the DOE contractor’s Multiple 

Employer Pension Plan or the Multiple Employer Welfare Arrangement 

retiree health care plan.” 

I mean, I think this report language is very clear. 

So do you have anything else? 

MR. STUPAK. No, sir. 

MR. WHITFIELD. Well, Secretary Rispoli, I want to thank you for 

being here today. I hope that you will take some of these concerns back 

and discuss them with the Secretary and others. And we would like to 

follow up with you on some of these as we go along, because these are 

all particularly important issues, and we’ll continue to follow them 

closely. 

MR. RISPOLI. Thank you. 

MR. WHITFIELD. So thank you very much. 

MR. RISPOLI. Thank you. 
27

MR. WHITFIELD. At this time, I would like to call up the second 

panel of witnesses. 

On the second panel we have the Honorable William Paxton, the 

Mayor of Paducah, Kentucky; we have Mr. Daniel Orazine, who is the 

County Judge Executive of McCracken County; we have Mr. Michael 

Hughes, who’s the President of Bechtel Jacobs; and we have Mr. Rob 

Ervin, who is the President of the United Steel Workers Local 5-550. 

And he, I understand, is accompanied by Mr. Richard Miller, who’s the 

senior policy analyst for the Government Accountability Project. 

So if you all would come forward. I want to thank you all so much 

for taking time from your busy schedules and joining us today. We 

genuinely appreciate your being here, Mayor and Judge and Mr. Ervin 

and Mr. Hughes. 

As you heard me on the first panel, I mentioned that this was an 

Oversight and Investigations hearing. It’s our policy to take testimony 

under oath. And do any of you have any difficulty in testifying under 

oath? You all look pretty honorable to me. 

You are entitled to legal counsel if you want it. I’m assuming you do 

not need legal counsel. 

Now, Mr. Miller, are you going to be testifying, or are you serving as 

an advisor? 

MR. MILLER. I believe, Mr. Whitfield, that I’ve been asked to 

accompany Mr. Ervin here today by the committee. 

MR. WHITFIELD. Well, what we’ll do is we’ll ask all of you to be 

sworn in. That way we’ll know we trust what you’re saying. 

So if you would, stand and raise your right hand. 

[Witnesses sworn.] 

MR. WHITFIELD. Thank you. 

Okay. All of you have been sworn in, and we appreciate that. And at 

this time, I’ll recognize Mayor William Paxton of Paducah for his 

opening statement. 

TESTIMONY OF WILLIAM F. PAXTON, MAYOR, PADUCAH, 

KENTUCKY; DANIEL ORAZINE, COUNTY JUDGE 

EXECUTIVE, PADUCAH, KENTUCKY; MICHAEL HUGHES, 

PRESIDENT, BECHTEL JACOBS, LLC, OAK RIDGE, 

TENNESSEE; AND ROB ERVIN, PRESIDENT, UNITED 

STEEL WORKERS LOCAL 5-550, PADUCAH, KENTUCKY, 

ACCOMPANIED BY RICHARD D. MILLER, SENIOR 

POLICY ANALYST, GOVERNMENT ACCOUNTABILITY 

PROJECT, WASHINGTON, D.C. 
28

MR. PAXTON. Good morning. I am Bill Paxton, Mayor of the City of 

Paducah. 

I want to start out by saying that I think you’re asking exactly the 

right questions. These are questions that we have been asking for several 

years, and it’s refreshing to have those questions asked. 

I want to also say that this community is on the move. We’re doing 

things right. We have a community where the County Judge and the City 

Mayor work together on a daily basis. We have a Chamber of 

Commerce that is aggressive and very competent, and we have a Greater 

Paducah Economic Development Council that has Wayne Sterling as its 

director, who was very instrumental in bringing BMW to South Carolina. 

So we’re doing things right, and we’re going to continue to do things 

right. 

Having said that, I will say that my role this morning is to 

co-represent our local governments before this committee. You will hear 

this morning from Judge Executive Danny Orazine and myself. I assure 

you that Judge Orazine and I are of one mind on the various issues we 

wish to address with the committee today. 

I should also mention that the McCracken County Fiscal Court, as 

well as the Paducah City Board of Commissioners, has previewed my 

remarks and Judge Orazine’s remarks. Commissioner Robert Coleman is 

here this morning with us listening to the hearing. 

I would like to say thank you to Congressman Stupak for his travels 

all the way from Michigan to Paducah, along with Congressman 

Whitfield. I’m pleased to see Assistant Secretary James Rispoli here 

today, and I appreciate his time in coming to Paducah. 

It’s one thing for Congress to discuss these matters with the 

Department in Washington, D.C. It is quite another to visit these sites 

and the communities in which they reside. By doing so, I think you are 

better able to see and hear directly from the people that are most affected 

by your decisions. 

I would especially like to thank Congressman Whitfield for your 

leadership and ongoing efforts regarding the various concerns facing the 

Paducah Gaseous Diffusion Plant. This plant has helped drive the 

economy in Western Kentucky, as you said earlier, for over 50 years. 

Two generations of Paducah workers have gained their livelihood at the 

plant. Some have sacrificed a great deal more than just their time. 

Congressman Whitfield, I wish to thank you personally for your 

efforts in securing funding of over $200 million for the sick workers and 

their families. 

We are proud of the work that is being done at the plant. We’re 

proud that the dedicated workers of the plant have contributed to the 

national interest by making the United States safe and prosperous. 
29

My remarks to the committee will not have anything to do with the 

pension plan or the phosgene issues we heard about earlier. However, 

Congressman Whitfield, I deeply appreciate your hard work in protecting 

the benefits and retirement levels for our local workers. I applaud your 

interest regarding the phosgene cylinders and the public safety concerns 

they represent. 

I realize the pressing demands on the committee’s time, and we do 

not have an unlimited amount of time today. So it is time to get to the 

point. 

All of the community’s issues that the Judge will discuss with you 

today are done with an eye towards the future. While many positive 

things have happened at the plant, there are really only two options for 

Paducah. This community can either continue to wring its hands about 

the host of problems facing the site, or we can create a new partnership 

and vision with DOE for Paducah. And that is the route I prefer. 

To accomplish this, we need the leadership of this Congress. If and 

when our plant is finally decommissioned, the blow to the local economy 

will be enormous. It must be softened. The leadership in 

Paducah-McCracken County has been working diligently for years to 

diversify and expand the local economy. 

Over the last ten years, the City of Paducah and McCracken County 

have invested over $20 million in developing new industrial parks, spec 

buildings, and marketing. Our local Greater Paducah Economic 

Development Council has embarked on an ambitious campaign to raise 

$6 million in the next four years to market and showcase this community 

to prospective communities. All of those dollars will be raised locally. 

It is only logical that we must look at the plant site for new 

opportunities to provide investment in employment for the next 

generation of Paducah’s families. 

Given the time constraints, there are several other details and issues 

important to this community that we will submit to the committee in the 

form of written comments. I would like now to thank you for my time 

and turn it over to my good friend Judge Orazine for the details on the 

pressing matters that are facing us. 

Thank you. 

MR. WHITFIELD. Thank you, Mayor. 

[The prepared statement of William F. Paxton follows:] 

PREPARED STATEMENT OF THE HONORABLE WILLIAM F. PAXTON, MAYOR, PADUCAH ,

KENTUCKY

Good morning. My name is Bill Paxton and I am the Mayor of Paducah. My role 

this morning is to co-represent our local governments before this committee. You will 

hear this morning from Judge-Executive Danny Orazine and myself. I assure you, Judge 

Orazine and I are of one mind on the various issues we wish to address with the 
30

committee today. I should also mention that the McCracken County Fiscal court as well 

as the Paducah City Board of Commissioners has previewed my remarks and Judge 

Orazine’s remarks. 

I would like to thank Congressman Stupak for traveling to Paducah today with 

Congressman Whitfield. I am pleased to see Assistant Secretary James Rispoli here 

today. It is one thing for Congress to discuss these matters with the department in 

Washington, D.C., it is quite another to visit these sites and the communities in which 

they reside. By doing so, I think you are better able to see and hear directly from the 

people that are most affected by your decisions. I would especially like to thank 

Congressman Ed Whitfield for your leadership and ongoing efforts regarding the various 

concerns facing the Paducah Gaseous Diffusion Plant. The plant has helped drive the 

economy in Western Kentucky for over fifty years. Two generations of Paducah’s 

workers have gained their livelihoods at the plant. Some have sacrificed a great deal 

more than just their time. Congressman Whitfield, I wish to thank you personally for 

your efforts in securing funding of over $200 million for the sick workers and their 

families. We are proud of the work that is done at the plant. We are proud that the 

dedicated workers of the plant have contributed to the national interest by making the 

United States safe, prosperous, and energy independent. My remarks to the committee 

will not have anything to do with the pension plan or phosgene issues we heard about 

earlier. However, Congressman Whitfield, I deeply appreciate your hard work in 

protecting the benefit and retirement levels for our local workers. I applaud your interest 

regarding the phosgene cylinders and the public safety concerns they represent. 

I realize the pressing demands on the committee’s time and that we do not have an 

unlimited amount of time today. So it is time to get to the point. All of the community 

issues that the Judge will discuss with you today are done with an eye toward the future. 

While many positive things have happened at the plant, there are really only two options 

for Paducah. This community can either continue to wring its hands about the host of 

problems facing the site; or we can create a new partnership and vision with DOE for 

Paducah. I think you know which choice I prefer. To accomplish this, we need 

leadership of this Congress. If and when our plant is finally decommissioned, the blow to 

the local economy will be enormous. It must be softened. The leadership in Paducah and 

McCracken County has been working diligently for years to diversify and expand the 

local economy. Over the last ten years, the city of Paducah and McCracken County have 

invested over $20 million dollars in developing new industrial parks, industrial spec 

buildings, and marketing. Our local Greater Paducah Economic Development Council 

has embarked on an ambitious campaign to raise $6 million dollars in the next four years 

just to market and showcase this community to prospective companies. All of those 

dollars will be raised locally. It is only logical that we must look at the plant site for new 

opportunities to provide investment and employment for the next generation of Paducah’s 

families. 

Given the time constraints, there are several other details and issues important to the 

community that we will submit to the committee in the form of written comments. I will 

turn now to Judge Orazine for the details on the pressing matters facing us. Thank you. 

MR. WHITFIELD. And, Judge, go ahead. 

JUDGE ORAZINE. All right. Thank you, Mayor. 

Chairman Whitfield, Congressman Stupak, and Assistant Secretary 

Rispoli, we thank you very much for holding this hearing here. This is 

very important to us, and the issues you’ve raised that we’re going to talk 

about this morning are very important to our community. 
31

I am speaking for the entire county government. I do have my judge 

pro tempore here, Ronnie Brinkman, as well as the Mayor and I are 

together on this and both Commissions because this is so important to 

our entire community. But we do want to thank you for conducting the 

hearing here this morning. 

On behalf of the Paducah-McCracken County community, there are 

only three areas that I wish to discuss with the committee this morning, 

and they are: Reindustrialization of the plant site, and I’ve heard some of 

your questions and comments already on that; metal recovery, especially 

nickel; and payment in lieu of taxes. 

In this post-privatization period, it was not likely that the plant would 

enrich uranium indefinitely. USEC has announced their next generation 

centrifuge plant will be in Ohio. We are not, as a community, going to 

sit and wait for whatever’s going to happen with the USEC plant. We 

want to be proactive and utilize that infrastructure and those assets out 

there to the best of our community’s future. 

The Department of Energy uses a formal process called “end state” to 

help determine the environmental cleanup process for our site. The level 

to which a site will be cleaned determines how it can be used in the 

future. As the entities most affected by the future of these sites, we’re 

asking, what is the proper role for local governments in the “end state” 

decision-making process? And rightly or wrongly, our community feels 

disconnected with the so-called “end state” process. 

An important decision for the local government involved in DOE 

cleanup, a Federal district court in the Eastern District of Washington has 

recently ruled that pursuant to CERCLA, local governments have legal 

standing to be able to participate in the planning and selection of a 

remedy at a CERCLA cleanup site. Pursuant to that decision, local 

governments must be allowed to participate in the planning and selection 

of a remedy. 

And we’re asking, how does the community help determine cleanup 

priorities? How can communities balance public health and 

environmental concerns with its potential reindustrialization of the site? 

Regrettably, Paducah continues to suffer from our reputation for 

being a 50-year host of this plant. I have here a copy of “The 

Washington Post” article that was printed in 1999. Also, we have a 

“National Geographic” story. You’re always seeking publicity for your 

community, but not this kind. 

This is very hurtful and detrimental to our community, even though 

we have taken pride in being a host of the USEC plant for the 50 years 

it’s been here. I’m sure that you can imagine that this does not help us in 

the recruitment of industry and also any other things that we look at as 

beneficial to our community. 
32

Our local government is charged with specific legal mandates under 

state and Federal laws to serve as steward of all land resources and 

infrastructure assets. It is our local government that is responsible for 

land use planning and control and, as said, should represent its citizens to 

DOE on site decisions. 

Currently, the City of Paducah and McCracken County are jointly 

engaged in a process of formulating a new comprehensive plan. Paducah 

and McCracken County have both had comprehensive plans for many 

years, but this is the first time that we’ve done one together. And we’re 

doing a very comprehensive study, especially of the plant site. 

The basic intent of the plan is to devise a land use policy that protects 

all of the land resources, determining the most logical pattern of 

development. We must go through a process of asset utilization that 

helps secure our economic future. This community and DOE must work 

together to have safe, secure, and compatible land uses surrounding the 

site. 

To achieve this, it is our recommendation to create a different formal 

mechanism for working with local government, and I think you all 

touched on that in some of your questions. 

But we -- in a letter to you, Congressman Whitfield, and to the rest of 

your Congressional Delegation dated December 14, 2005 -- requested 

that a DOE position be formed in the Paducah office to work exclusively 

on economic development and reindustrialization issues at the site. Now, 

Mr. Bill Murphie does do a good job with the cleanup. 

When some of our delegation went to Oak Ridge, we saw how well 

that works there, and we’re not just asking for that because they have 

someone. We think that would be very beneficial for our community. 

So we repeat this and ask for your assistance today. We do not believe 

this type of arrangement is unprecedented for DOE. And as I said, it’s 

because we visited the Oak Ridge site, we learned that sometimes DOE 

does get involved in economic development. 

Your colleague Senator McConnell was instrumental in securing 

statutory language to study the water policy at the site. It is our request 

that DOE take an expansive view of the current proof study for the 

existing site in addition to potential uses of land that may be voluntarily 

acquired. There are at least 4,000 acres of land in and around the plant 

site that should be in the master plan. 

The master plan should evaluate the reindustrialization opportunities 

of the gaseous diffusion site and the vicinity. It is imperative that local 

government and the community be closely involved in this process. It all 

ties together; environmental remediation is linked to our 

reindustrialization. 
33

Now I want to speak to the nickel on the site, and you all have 

already asked some good questions about that. We were glad to hear 

those questions and comments regarding the nickel. But we look at that 

as an asset for Paducah. After 50 years of solid support for DOE, and I 

truly mean that. We’ve worked with DOE as well as we could. We’ve 

looked at them as a partner in the community and still look at it that way. 

The Paducah community and region should receive equitable 

treatment compared to other sites, such as Hanford; Pinellas County, 

Florida; and most recently Oak Ridge, Tennessee. They have 

experienced success through the transfer of assets through the Hall 

Amendment to bring back value to the community. 

I don’t know how much I’m allowed to deviate from this, but I heard 

Secretary Rispoli talk about maybe they would study alternatives to the 

nickel, as well as one of the alternatives maybe keeping that here. So I 

would ask the Secretary, if I wouldn’t be impolite, not to study any 

alternatives, but designate that as a Paducah site and let us study it 

together and how we can utilize that for our area. 

Recently, DOE included metal recycling in the scope of the new plant 

cleanup contract just awarded. It is our hope that it is logical for DOE to 

lift the moratorium on metal recycling. And I heard you ask questions on 

that. 

It is our recommendation to immediately work to re-establish the 

position of our community, that the value of certain assets be reserved 

for the economic benefit of the community. Our position regarding the 

disposition of assets, especially the nickel, has been made known to DOE 

for several years. That process was initiated in 1998, again reinforced in 

the year 2000, again in 2003 and 2004, and to the Congressional 

Delegation in 2005. 

It is not our intention to use the funds for general government. We 

don’t want the nickel assets to be just put in our general fund to be 

soaked up and see no benefit to it. 

Rather, the community would use a portion of those funds for 

additional cleanup and reindustrialization of select parts of the site. By 

that, we realize the whole 4,000 acres probably will never be beneficial 

for an industrial site, but we need what part of it we can get, or provide 

incentives and infrastructure for the Graves County Regional Park. 

If we secure funds from the sale or transfer of assets, it is our goal to 

reduce the constant request for congressional appropriations for the 

region as they relate to mitigating the obvious negative impacts that 

come with the plant being downsized or closed. 

The last item and one of the also very important ones to us is the 

payment in lieu of taxes. Less than two weeks ago, we had a large 

wildfire that was started near the plant site. Our local fire fighting 
34

agency which covers the USEC territory responded to it to control the 

blaze that was potentially threatening to the site. 

While DOE real estate holdings encumber thousands of acres in 

McCracken County, real estate property taxes are not made to any local 

units of government, including the county, the fire department, or the 

local school district. I just used the fire department as one example of a 

service that we do provide from the county for the USEC plant, as well 

as many other services. These local units of government bring services 

of value to the plant site. 

In 2006, McCracken County will formally request DOE for payments 

in lieu of taxes. The purpose of the payments would be to offset the loss 

of property tax revenue associated with the acquisition of the properties 

by the United States. Property tax revenues pay for essential local 

services. By way of comparison, the Tennessee Valley Authority site 

located adjacent to the Gaseous Diffusion Plant pays McCracken County 

nearly $800,000 annually in lieu of property taxes. 

Here again, we will be only seeking equitable treatment by DOE. We 

understand that there are about 20 other communities in our nation that 

have a DOE presence that already receive these payments in lieu of 

taxes. 

In conclusion, Honorable Chairman and Congressman Stupak and 

staff, this concludes my prepared statement. If you have any questions or 

concerns, I can address them now, or, of course, you may contact my 

office or the Mayor’s office at your convenience. 

We do sincerely appreciate -- I’m not going to read this because I 

really mean this -- we really appreciate you all holding this hearing here. 

I was glad to meet Congressman Stupak this morning and some of the 

other staffers. And, Congressman Whitfield, we appreciate everything 

you’ve done in the past and especially holding this hearing here. 

[The prepared statement of Daniel Orazine follows:] 

PREPARED STATEMENT OF DANIEL ORAZINE, COUNTY JUDGE EXECUTIVE, MCCRACKEN 

COUNTY, KENTUCKY 

Honorable Chairman Whitfield. Honorable Congressman Stupak. Good morning. 

My name is Danny Orazine. I am the McCracken County Judge-Executive. Thank you 

for conducting this hearing in Paducah. Congressman Whitfield, I too share the Mayor’s 

gratitude for all of your assistance in representing our workers. 

On behalf of the Paducah-McCracken County community, there are three areas of 

concern I wish to address with the committee today. They are: 

1. Re-industrialization of the plant site, 

2. Metal Recovery, especially nickel, as decommissioning occurs; and 

3. Payments in Lieu of Taxes. 
35

FIRST: RE-INDUSTRIALIZATION

In this post privatization period, it is not likely that this plant will enrich uranium 

indefinitely. USEC has announced that their next generation centrifuge plant will be in 

Ohio. We simply cannot just sit still and wait for that to happen. We must be working 

now to develop strategies to successfully benefit from the infrastructure and land assets 

that will be left behind. 

The Department of Energy uses a formal process called “End States” to help 

determine the environmental cleanup process for a site. The level to which a site will be 

cleaned determines how it can be used in the future. As the entities most affected by the 

future of these sites, what is the proper role for local governments in the end state 

decision-making process? Rightly or wrongly we feel disconnected from the so-called 

“End States” process. In an important decision for local government involvement in 

DOE cleanup, a Federal District Court in the Eastern District of Washington has recently 

ruled that pursuant to CERCLA, local governments have legal standing to be able to 

participate in the planning and selection of a remedy at a CERCLA cleanup site. 

Pursuant to that decision, local governments must be allowed to participate in the 

planning and selection of a remedy. How does the community help determine cleanup 

priorities? How can communities balance public health and environmental concerns with 

potential reindustrialization opportunities? Regrettably, Paducah continues to suffer 

from its national reputation as being a “dirty” site. National publications like National 

Geographic and the Washington Times spotlighted Paducah with feature articles 

regarding contamination and threats to public health. I am sure you can imagine that this 

does not help in the recruitment of new industries in to the region. 

Our local government is charged with specific legal mandates under state and federal 

laws to serve as stewards of all land resources and infrastructure assets. It is our local 

government that is responsible for land use planning and control and as such should 

represent its citizens to DOE on site decisions. Currently, the city of Paducah and 

McCracken County are engaged in the process of formulating a new comprehensive plan. 

The basic tenant of the plan is to devise a land use policy that protects all of the land 

resources by determining the most logical pattern of development. We must go through a 

process of asset utilization that helps secure our economic future. This community and 

DOE must work together to have safe, secure, and compatible land uses surrounding the 

sites. To achieve this, it is our recommendation to create a different formal mechanism 

for working with local governments. 

In a letter to you, Congressman Whitfield, and the rest of our congressional 

delegation dated December 14, 2005, we requested that a DOE position be formed in the 

Paducah office to work exclusively on economic development and reindustrialization 

issues at the Paducah site. We repeat this and ask for your assistance today. We do not 

believe this type of arrangement is unprecedented for DOE. We have visited with local 

officials and DOE officials at the K-25 facility in Oak Ridge. We think DOE’s economic 

development efforts at K-25 are a model for Paducah. Resources must be made available 

to support the local government’s need to have a substantive role in land use planning on 

DOE facilities, especially in Paducah where DOE and USEC have stated they are 

downsizing the facility. 

Your colleague, Senator McConnell was instrumental in securing statutory language 

to study the “water policy box” at the site. It is our request that DOE take an expansive 

view of the current approved study for the existing site in addition to potential uses of 

land that may be voluntarily acquired. At least 4,000 acres of land in and around the 

plant site should be “Master Planned”. The Master Plan should evaluate the 

reindustrialization opportunities of the gaseous diffusion site and vicinity. It is 

imperative that local government and the community be closely involved in this process. 

It all ties together. Environmental remediation is linked to re-industrialization. 
36

SECOND: Nickel, Metals, AND OTHER ASSET Recovery on Site

 After 50 years of solid support for DOE and doing our part for national security, the 

Paducah community and region should receive equitable treatment compared to other 

sites such as Hanford, WA, Pinellas County, FL, and most recently Oak Ridge, TN that 

have experienced success through the transfer of assets through the “Hall Amendment” to 

bring back value to the community. 

The urgency of establishing a position for the community in the disposition or sale of 

the nickel, other metals, and other assets on site appears to be building. Recently DOE 

included metal recycling in the scope of the new plant cleanup contract just awarded. It is 

our hope that it is logical for DOE to lift the moratorium on metal recycling soon. 

It is our recommendation to immediately work to reestablish the position of the 

community, that the value of certain assets be reserved for the economic benefit of the 

community. Our position regarding the disposition of assets, especially the nickel, has 

been made known to DOE. That process was initiated in 1998, was reinforced in 2000, 

again in 2003, 2004, and again was supported again by Kentucky’s congressional 

delegation in 2005. 

It is not our intention to use any funds for “general government” purposes. Rather, 

the community could use a portion of those funds for additional cleanup; reindustrialization of select parts of the site; or provide incentives and infrastructure for the 

Graves County Regional Park. If we secure funds from the sale or transfer of assets, it is 

our goal to reduce the constant request for Congressional appropriations for the region as 

they relate to mitigating the obvious negative impacts that come with the plant being 

downsized or closed. 

Payments In Lieu of Taxes

 Less than two weeks ago, a large wild fire was started near the plant site. Local 

firefighters from McCracken County responded to and controlled the blaze that was 

potentially threatening to the plant site. While DOE real estate holdings encumber 

thousands of acres in McCracken County, real estate property taxes are not paid to any 

local units of government including the county, the fire protection district, or the school 

district. These local units of government bring services and value to the plant site. In 

2006 McCracken County will formally request DOE for payments in lieu of taxes. The 

purpose of the payments would be to offset the loss of property tax revenue associated 

with the acquisition of the properties by the United States. Property tax revenues pay for 

essential local services. By way of comparison, the Tennessee Valley Authority site 

located adjacent to the gaseous diffusion plant pays McCracken County nearly $800,000 

annually in lieu of property taxes. Here again, we will only be seeking equitable 

treatment by DOE. At least 20 communities across the nation that have had a DOE 

presence have received payments in lieu of taxes. 

CONCLUSION

 Honorable Chairman, Congressman Stupak, and staff, this concludes my prepared 

statement. If you have any questions or concerns, I can address them now, or of course 

you may contact my office at your convenience. I sincerely appreciate you coming to 

Paducah. It makes a real difference to the Fiscal Court, the Mayor, the City Board of 

Commissioners, and the community we are so fortunate to serve, when you take such a 

keen interest. Keep up the good work. The Mayor and I look forward to working with 

you and DOE as we move this community forward. We know you are sincere in your 

desire to help us help ourselves. As we are fond of saying around here, Paducah’s best 

days are still ahead us. Thank you. 

Respectfully Submitted this 19th Day of January 2005 
37

MR. WHITFIELD. Well, thank you all for your testimony. It is quite 

in-depth with some great suggestions. 

And at this time, Mr. Hughes, we’ll recognize you for your opening 

statement. 

MR. HUGHES. Thank you, Chairman Whitfield and Representative 

Stupak. I’d like to go ahead and share with you what we put down for 

the committee. 

Good morning. I’m Mike Hughes, President and General Manager of 

Bechtel Jacobs, which is an LLC, and we’re the Environmental 

Management contractor for the Department of Energy at Oak Ridge, 

Tennessee, and Paducah, Kentucky, and formerly at Portsmouth, Ohio. 

And I do appreciate the opportunity to testify today. 

Our primary mission at Paducah is to execute the Department’s 

cleanup mission here and the program at the site with the support of 

numerous subcontracts. Our current contract expires April 23rd, 2006. 

I’d like to say a few words about our recent environmental 

accomplishments, our preparations for transition of the new remediation 

contractor, and our continuing role as administrator of the 

Multi-Employer Pension Program and the Multi-Employer Welfare 

Agreement. 

First, I’d like to say a few things about safety. Safety is always our 

first priority. So adherence to the integrated safety management system 

approach and the dedication and commitment of our workforce has 

resulted in excellent safety performance at Paducah. 

In September, we completed 3 million hours of work without a lost 

time accident. This is the second time we’ve been able to achieve this 

and reach the 3-million-hour mark at the Paducah project, and we are on 

track to reach 3.5 million hours before the end of our contract this 

coming April. 

Second only to the safety of our workforce and the public is the 

protection of the environment. We have enjoyed excellent relationships 

with our subcontractors, union representatives, and the local community; 

and together we have had notable successes in environmental 

remediation over the past year. 

I’d like to share some of those over the past year versus going all the 

way back to 1998. These include the cleanup of ground and surface 

water contamination, scrap metal removal, the decontamination and 

decommissioning of inactive facilities, waste treatment and disposal of 

contaminated cleanup, and more. 

Specifically, we are proud of the following accomplishments: We 

accelerated the pace of the legacy waste disposition, removing more than 

3 million pounds of uranium tetrafluoride and a variety of other wastes. 

By March of this year, we expect to have completed disposal of half of 
38

the total legacy waste volume at the site. We disposed of 5,000 tons of 

scrap metal last year. 

We emptied the last of 17 outdoor DOE material storage areas in 

October and have begun to empty indoor storage areas now. We 

completed the accelerated decontamination and decommission of the 

plant nitrogen generating facility, issued initial documents for the 

removal of three more inactive facilities, and continue to make progress 

in the 250,000 square-foot feed plant complex. 

We’ve also completed an investigation of two old landfills and the 

southwest groundwater plume and issued the initial work plan for 

investigation of the site burial group. 

With regard to the worker transition, shifting the transition, we will 

continue to diligently work with our Paducah employees, DOE, and the 

new remediation contractor to assure the safe, efficient, and effective 

transition of the remainder of our Paducah scope of work. To date, 

we’ve completed five of the six necessary transitions of scope to other 

DOE prime contractors at Paducah and Portsmouth, Ohio, and to the best 

of our knowledge, these transitions have been fully satisfactory to the 

Department of Energy and to the contractors. 

We will continue to provide focused senior management leadership, 

subject matter experts, and a project management approach to assist all 

parties in a safe, efficient and effective transition of the remaining 

remediation work scope at Paducah. 

BJC has a separate arrangement with the Department of Energy to 

provide services for the administration of a Multi-Employer Pension 

Plan, which we’ve been referring to as MEPP, and the Multi-Employer 

Welfare Agreement, MEWA, for the eligible covered employees of the 

four DOE prime contractors for remediation and infrastructure at 

Paducah and Portsmouth, Ohio. 

Bechtel Jacobs has been successful in providing benefits 

administration support for transitioned workforces over the past eight 

years from our Oak Ridge office. Presently, this includes benefit 

administrations for 2,124 eligible active employees of Bechtel Jacobs 

Company, our 27 workforce transition subcontractors, and the 

remediation and infrastructure contractors and subcontractors in both 

Paducah and Portsmouth. BJC Benefits Administration also provides 

benefit administration for approximately 400 retirees. 

On June 27th, 2005, Bechtel Jacobs Company was successful in the 

transition of 135 remediation and infrastructure eligible covered 

employees in Portsmouth and Paducah. This included coordination with 

three prime contractors and seven subcontractors. During this transition, 

none of the covered employees incurred any suspension or loss of 

benefits. 
39

To ensure a smooth transition for eligible employees, BJC Benefits 

Administration will work in conjunction with the BJC transition manager 

and remediation contractor and subcontractors to complete the following: 

Identify the responsible members of the Paducah remediation contractor 

and its subcontractors. We will provide training facilitated by the 

Bechtel Jacobs Company Benefits administrative staff to familiarize the 

Paducah remediation contractor with the MEPP and MEWA. 

We’ll conduct formal presentations made by the plan administrator 

and the benefits manager on the Paducah remediation contractor’s 

participation on the benefits and investment committee to help them 

understand their fiduciary responsibilities. 

We’ll ensure the Benefits Administration works closely with the 

contractor and subcontractors on the actual employee eligibility and 

administration; for example, enrollments for the various benefit 

providers. And we will continue to provide quality benefit 

administration for the Paducah remediation eligible covered employees. 

Within the community, Bechtel Jacobs continues to work closely with 

the Paducah Gaseous Diffusion Plant Citizens Advisory Board when 

implementing DOE’s Environmental Management decisions. We 

appreciate their support and the recommendations. This positive 

relationship with the CAB and the community is vital to the success of 

the cleanup program. 

I’d like to commend Paducah’s elected officials, their business 

leaders and civic organizations for their support in the environmental 

cleanup program. Bechtel Jacobs Company has always strived to be a 

good corporate citizen, and we have made many lasting friendships in 

this community. 

Let me also thank you, Chairman Whitfield, and fellow members of 

the Kentucky Delegation, particularly Senators Bunning and McConnell, 

for your continued support for the funding to continue this cleanup and 

extremely important environmental cleanup projects that have been 

ongoing. 

In conclusion, let me say that significant progress has been made in 

the environmental cleanup of the Paducah Gaseous Diffusion Plant 

during the tenure of Bechtel Jacobs Company. We are very proud of our 

safety record, and we’re also very proud of the accomplishments we’ve 

made here. 

We’re committed to continuing our high level of professional support 

to the employees, the retirees, the community, Department of Energy, 

and the new contractor during this final phase of transition, and we will 

also continue to take seriously the responsibility to administer the 

pension and benefits beyond transition. 
40

I’d just like to say we are, in conclusion, extremely proud of what 

we’ve been able to do here. We’ve been very thankful to have the 

opportunity to serve the Department of Energy as the prime contractor 

here, and in the transition, we will continue to take care of people and 

that process and work with the community and the new contractors to 

make sure that that’s seamless. 

Thank you very much. 

MR. WHITFIELD. Thank you, Mr. Hughes. 

[The prepared statement of Michael Hughes follows:] 

PREPARED STATEMENT OF MICHAEL HUGHES, PRESIDENT, BECHTEL JACOBS, LLC

SUMMARY 

Bechtel Jacobs Company LLC (BJC) is the Department of Energy’s (DOE) 

Remediation contractor at the Paducah Gaseous Diffusion Plant in Paducah, Kentucky. 

Our primary mission is to effectively execute DOE’s environmental cleanup program at 

the site. We assumed responsibility for the Paducah work on April 1, 1998. The 

Infrastructure and Cylinder Management scopes of work were transitioned to other DOE 

prime contractors in June 2005, and we are scheduled to transition the remaining 

Remediation scope to another DOE prime contractor prior to our current contract 

expiration date of April 23, 2006. Under a separate arrangement with DOE, BJC will 

continue pension and benefit administration for eligible covered employees of the new 

DOE prime contractors. 

Safety of our workforce and the public is always our first priority. In September, we 

completed three million hours of work without a lost-time accident. We have had notable 

environmental remediation successes during the past year in the cleanup of groundwater 

and surface water contamination, removal of scrap metal, decontamination and 

decommissioning of inactive facilities, and treatment and disposal of contaminated waste. 

We are proud of our safety record and accomplishments. 

We commend Paducah’s elected officials, business leaders, and civic organizations 

for their support to the environmental cleanup program. Let me also thank you, 

Representative Whitfield, and the fellow members of the Kentucky delegation, 

particularly Senators Bunning and McConnell, for your continued support for the funding 

of this extremely important work. 

INTRODUCTION 

Good morning. I am Mike Hughes, President and General Manager of Bechtel 

Jacobs Company LLC (BJC), the Department of Energy’s (DOE) environmental 

management contractor for Oak Ridge, Tennessee; Paducah, Kentucky; and formerly at 

Portsmouth, Ohio. Our primary mission is to effectively execute DOE’s environmental 

cleanup program at the site and support an effective workforce transition program. We 

assumed responsibility for the Paducah work on April 1, 1998. The Infrastructure and 

Cylinder Management scopes of work were transitioned to other DOE prime contractors 

in June 2005, and we are scheduled to transition the remaining Remediation scope to 

another DOE prime contractor prior to our current contract expiration date of April 23, 

2006. Under a separate arrangement with DOE, BJC will continue pension and benefit 

administration for eligible covered employees of the new DOE prime contractors. 
41

ENVIRONMENTAL MANAGEMENT 

 BJC has achieved notable successes in environmental management on the Paducah 

Project. We have made significant progress in legacy waste disposition, decontamination 

and decommissioning (D&D), scrap metal removal, and the characterization and 

disposition of materials in storage sites across the plant. We have advanced the 

groundwater program and completed several studies needed for future cleanup decisions.

By the anticipated end of our contract at the Paducah Gaseous Diffusion Plant, we 

will have completed disposal of more than half of the legacy waste inventory at the 

Paducah site. Since the start of Fiscal Year 2005, we have disposed of more than 72,000 

cubic feet of legacy waste. This included a special effort to examine and dispose of 

nearly three million pounds of uranium tetrafluoride two years ahead of schedule, and we 

accelerated disposition of legacy wastes that have been stored outdoors for many years. 

Our scrap metal removal project has disposed of approximately 5,000 tons of scrap 

metal over the last year. We have disposed of more than 12,000 tons of scrap metal to 

date, and a recent restructuring of our principal subcontract for scrap metal disposition is 

allowing us to increase the pace of disposal, while reducing shipping vulnerabilities. A 

special effort to dispose of more than 250 tons of metal turnings in 2005 was highly 

successful. 

Under DOE’s 2003 Agreed Order with the Commonwealth of Kentucky, we have 

completed characterization of 75 percent of the estimated 855,000 cubic feet of material 

in 160 DOE Material Storage Areas (DMSAs) located throughout the Paducah Gaseous 

Diffusion Plant site. In October 2005, we emptied the last of 17 outdoor DMSAs and 

have now turned our focus to the indoor locations. Some of the areas have been returned 

to DOE or USEC use, and we have 20 formal Resource Conservation and Recovery Act 

Closure Plans where the work has been completed and we are awaiting regulatory review 

and approval. 

We have accelerated the D&D of several inactive Paducah facilities and completed 

the removal of the Nitrogen Generating Facility in October 2005, five years ahead of 

schedule. Essential evaluations and cost analyses have been completed for the D&D of 

three other inactive facilities, and we continue to make progress in the D&D of the 

250,000 square foot Feed Plant complex. 

The August 9, 2005, signing of the Record of Decision on the C-400 Groundwater 

Action has allowed us to proceed with the planning document for the remediation of the 

major groundwater contamination source at the site. Direct Heating Technology, shown 

to remove 98 percent of the volatile organic contamination in the target area during our 

earlier Six-Phase Heating Treatability Study, can now be applied with confidence to the 

dominant source of risk at the site. In the interim, we have continued to treat the most 

contaminated portions of the groundwater plumes, bringing the total volume of 

groundwater treated to 1.8 billion gallons. We have also continued to protect residents 

north of the plant through administration of DOE’s Water Policy Box lease agreements. 

These and other environmental efforts – including extensive ongoing environmental 

monitoring, completion of the Final Remedial Action Report on the North-South 

Diversion Ditch, and key studies of the Southwest groundwater plume, the former S and 

T Landfills, and site-wide surface water – have reduced risk to the public and site 

workers from actual and potential environmental contamination. As we close out our 

work with DOE at the Paducah plant, we can transition DOE’s environmental 

management work to the incoming contractor with strong momentum and on sound 

footing. 

CONTRACT TRANSITION

DOE divided the Management and Integration contracts at Paducah and Portsmouth 

into distinct work scope elements at each site. These work scope elements are 

Infrastructure, Cylinder Management, and Remediation at both sites, and Citizens 
42

Advisory Board support at Paducah. Only one work scope element, Remediation at 

Paducah, remains to be transitioned to a new contractor. BJC is committed to fully 

supporting the DOE’s transition of the remaining remediation work scope. 

During the past year, our company has completed the safe, efficient, and effective 

transition of the Cylinder Management program and the Infrastructure scope of work at 

Paducah. The success of our transition program can be attributed to a three-tiered 

management approach that includes: focused senior management leadership, a subject 

matter expert transition team, and a proven project management approach. 

The General Manager of the Paducah Project has overall responsibility, the 

Operations Manager ensures that ongoing activities continue unimpeded during 

transition, and the Transition Manager is responsible for the specific transition activities. 

The focused management team has delivered very successful transitions to date and will 

do so for the remaining work scope. 

We have identified 40 distinct work scope areas for remediation that have subject 

matter expert leads in Paducah supported by Oak Ridge counterparts. This arrangement 

allows us to utilize the company’s full expertise to assist the Remediation contractor in 

identifying, coordinating, and closing out key activities and issues of concern. Through 

our project management approach, a comprehensive schedule containing 400 action items 

was developed and tracked to completion during the Infrastructure transition. The 

current Remediation transition project schedule also contains approximately 400 action 

items, more than 100 of which have already been completed. 

ADMINISTRATION OF BENEFITS 

BJC will continue to provide services for benefit and pension administration of the 

Multiple Employer Pension Plan (MEPP) and the Multiple Employer Welfare Agreement 

(MEWA) for the eligible covered employees of four DOE prime contractors for 

Remediation and Infrastructure at Paducah and Portsmouth. On April 25, 2005, DOE 

directed execution of service agreements with the Infrastructure and Remediation 

contractors. BJC serves as the plan administrator and executes the plan as set forth by 

DOE in our contract. 

BJC has been successful in providing benefits administration and support for 

transitioned workforces over the past eight years. Beginning with the transition of 

Lockheed Martin incumbent employees to BJC and its first- and second-tier 

subcontractors, BJC has provided benefits administration and support from our Oak 

Ridge office. Presently this includes benefits administration for 2,124 eligible active 

employees of BJC, our 27 workforce transition subcontractors, and the Remediation and 

Infrastructure contractors/subcontractors in Paducah and Portsmouth. BJC Benefits 

Administration also provides benefit administration for approximately 400 retirees. 

On June 27, 2005, BJC was successful in the transition of 135 Remediation and 

Infrastructure covered employees in Portsmouth and Paducah. This included 

coordination with the three prime contractors and seven subcontractors. During this 

transition none of the covered employees incurred any suspension or loss of benefits. 

To ensure a smooth transition for the Paducah Remediation eligible covered 

employees, BJC Benefits Administration is working with the BJC Transition Manager 

and Remediation contractor/subcontractors to: 

• identify the responsible members of the Paducah Remediation contractor and 

its subcontractors, 

• provide training, facilitated by BJC Benefits Administration, to familiarize the 

Paducah Remediation contractor with the MEPP and MEWA, 

• conduct formal presentations, made by the Plan Administrator and the Benefits 

Manager, on the Paducah Remediation contractor’s participation on the 

Benefits and Investment Committee to help them understand their fiduciary 

responsibilities, 
43

• work closely with the Paducah Remediation contractor/subcontractors on the 

actual employee eligibility and administration (e.g., enrollments for the 

various benefits providers), and 

• continue to provide quality benefit administration for the Paducah 

Remediation eligible covered employees. 

The new Remediation contractor and subcontractors will sign a Benefits Accounting 

and Administration Services Agreement and an Adoption Agreement to allow continued 

participation for eligible transitioned employees. BJC will ensure a successful transition 

and continued benefits administration for the Paducah Remediation contractor’s eligible 

covered employees. 

CLOSING 

Significant progress has been made in the environmental cleanup of the Paducah 

Gaseous Diffusion Plant during the tenure of BJC. We are proud of our safety record and 

accomplishments. We are committed to continue our high level of professional support 

to our employees, retirees, the community, DOE, and the new contractor during this final 

phase of transition, and we will continue to take seriously the responsibility to administer 

the pension and benefits beyond transition. 

We commend Paducah’s elected officials, business leaders, and civic organizations 

for their support to the environmental cleanup program. Let me also thank you, 

Representative Whitfield, and the fellow members of the Kentucky delegation, 

particularly Senators Bunning and McConnell, for your continued support for the funding 

of this extremely important work. 

Thank you. 

MR. WHITFIELD. And at this time, we’ll recognize Mr. Rob Ervin for 

his opening statement. 

MR. ERVIN. Good morning. I want to thank the Chairman and 

ranking member for holding this hearing today in Paducah and inviting 

me to testify. 

My name is Rob Ervin, and I have worked at the Paducah Gaseous 

Diffusion Plant for 17 years. I am currently employed by USEC as an 

instrumentation and controls technician. In addition, I serve as the 

President of USW Local 550, which represents over 700 hourly workers 

employed by USEC and Department of Energy Environmental 

Management Program contractors and subcontractors at the Paducah 

plant, including Bechtel Jacobs, Swift & Staley, Weskem, and Uranium 

Disposition Services. 

At the outset, I would like to recognize the leadership provided by 

Congressman Ed Whitfield over the many years he has represented our 

plant. His work covers pension protections in the USEC Privatization 

Act of 1996, holding oversight hearings on the problems created by 

privatization, negotiating a memorandum of agreement to guarantee 

operations of the Paducah enrichment plant through the year 2010, and 

expanding the Former Worker Medical Screening Program. 

He helped enact legislation to dispose of the 50-year legacy of 

depleted uranium hexafluoride at Paducah and serve as a lead House 
44

sponsor of the Energy Employees Occupational Illness Compensation 

Program Act. He used his perch on Energy and Commerce to track 

DOE’s failures in implementing its part of the compensation program 

and then worked to transfer the DOE’s program over to the Department 

of Labor in 2004. 

Most recently, he joined on a bipartisan basis with Representative 

Ted Strickland in enacting legislation to protect the pensions and retiree 

health care benefits of USEC and Bechtel workers. 

This list seems long because there has been a lot accomplished. Our 

membership thanks him and his staff for these and many other efforts. 

I would be remiss if I did not mention how much the workers at 

Paducah plant have appreciated the tireless efforts of Karen Long. We 

will miss her. 

Today, my testimony will focus on two areas, ensuring portability of 

the pension and retiree health care benefits for USEC hourly workers 

who transfer to the DOE cleanup contractors and continuing the DOE 

Former Worker Medical Screening Program at Paducah. 

Today, workers employed at Paducah have the right to carry pension 

service credits and retiree medical benefits from USEC to cleanup 

contractors. Unfortunately, DOE is bringing this practice to an abrupt 

halt. 

Regardless of the changes to employment arrangements, such as 

USEC privatization, the shift to an integrating contractor with multiple 

subcontractors or the replacement of the management and operations 

contractor, pension portability has been the rule at the Paducah plant 

throughout its 50-year history. 

In 1998, DOE directed Bechtel Jacobs to establish the Multiple 

Employer Pension Plan, or the MEPP, a defined benefit plan which 

welcomed displaced USEC workers and facilitated pension portability 

between DOE prime contractors and their subcontractors. 

When DOE issued requests for proposals for remediation and 

infrastructure contractors in November 2003 to replace Bechtel Jacobs, it 

severely narrowed the definition of which workers will be grandfathered 

and, therefore, eligible to participate or transfer into the MEPP. USEC 

workers and Bechtel Jacobs workers above first tier supervision were 

excluded. 

Two key documents govern benefit portability at Portsmouth and 

Paducah, the Bechtel Jacobs Multiple Employer Pension Plan and the 

Bargaining Unit Transition Agreement. 

In response to concerns about DOE’s request for proposals, Mr. 

Whitfield sent then Secretary of Energy Abraham a December 18th, 

2003 letter expressing concerns about the loss of pension continuity. 
45

Senators McConnell and Bunning followed with a December 19th, 2003 

letter. 

DOE has questioned whether permitting USEC employees to transfer 

into the MEPP with their full service credits but without corresponding 

proportionate transfer of pension plan assets might result in fiscal 

impairment of the plan. DOE received a briefing showing this concern is 

misplaced. 

Benefits are paid under the MEPP on a pro rata basis proportional to 

years of employment if employees are also participating in the USEC 

plan. USEC is separately obligated to make pension payments from its 

pension plan on a pro rata basis. Employees simply receive two pension 

checks. DOE’s concerns about pension transfers are a red herring. 

When DOE announced the award of new contracts in Portsmouth and 

Paducah in the spring of 2005, the pension portability issues were not 

resolved. Representatives Whitfield and Strickland then attached Section 

633 to the Energy Policy Act of 2005. Section 633 codifies the benefit 

continuity arrangements at Portsmouth and Paducah that were in effect 

on April 1st of 2005. 

DOE vigorously lobbied against this pension provision during the 

House/Senate conference during July 2005. Following its legislative 

loss, DOE issued a September 13th, 2005 implementation plan which 

excludes USEC hourly workers. On October 3rd, Representatives 

Whitfield and Strickland challenged the interpretation by pointing out 

that Section 633 specifically includes USEC workers. 

On January 12th, 2006, DOE responded that USEC workers will not 

have a right to transfer their pension benefits with them when employed 

by new DOE contractors if the DOE contractors they go to work for were 

not previously parties to a Bargaining Unit Transition Agreement on 

April 1st, 2005. 

Nowhere does Section 633 require that new DOE contractors had to 

already have been signatories to a Bargaining Unit Transition Agreement 

back on April 1st, 2005. The law is unambiguous. DOE has a 

forward-looking obligation to continue pension continuity for all 

employees who had these rights on the benchmark date of April 1st, 

2005. 

As an immediate matter, DOE’s position is that USEC hourly 

employees cannot bring their pension service credit with them to 

Paducah Remediation Services, the new Paducah remediation contractor 

who was awarded a DOE contract on December 27th, 2005, because 

Paducah Remediation Services was not a signatory to the Bargaining 

Unit Transition Agreement back on the April 1st benchmark date. 

DOE wants to reduce the number of workers in its contractors’ 

defined pension plan as a part of a national pension agenda. While 
46

cutting off employees from defined benefit plans is an unfortunate trend 

in the private sector, it is not the DOE’s job to second-guess a 

Congressional directive which continues such benefits. DOE has fixed 

its legal position around its policy to reduce their legacy pension costs by 

taking it out of the pockets of the workers. 

As much as we all want the Paducah plant to remain operational, we 

are mindful of the economic challenges presented by rising electricity 

costs and the development of lower cost centrifuge technology. 

In the future, as USEC workers seek to fill available openings with 

the cleanup contractors, the loss of pension continuity is a concern. The 

possibility of further downsizing coupled with the potential for further 

DOE decommissioning jobs makes pension continuity at Paducah an 

imperative for a much larger number of workers and a precedent that 

should not be tampered with. 

In sum, DOE should be asked whether they intend to comply with the 

letter and intent of Section 633. We hope that DOE will not make it a 

routine practice to require two acts of Congress to implement a given 

Congressional directive as it did with the DUF6 Project. Without 

pension portability assured for USEC hourly workers, we believe it will 

be difficult to ensure a seamless transition to the new remediation 

contractor. 

The DOE’s Former Worker Medical Screening Program has screened 

2,597 workers who were exposed to radioactive or toxic substances at 

Paducah between May 1st, 1999, and December 31st, 2005. The basic 

screening program was expanded in November 2000 to include an early 

lung cancer screening program and to allow current workers to 

participate. 

Using a low dose CT spiral scanner on a mobile unit traveling 

between Portsmouth and Paducah and Oak Ridge, 1,620 individuals have 

received lung scans in Paducah and 5,829 at the three gaseous diffusion 

plants. Forty-four lung cancers were identified at Stage I, when 

treatment has a very high probability of saving a life. The low dose CT 

spiral scan is four times more likely than a chest x-ray to detect cancer at 

an early stage. 

DOE’s Former Worker Medical Screening Program is going to be 

operating with a smaller footprint for the next two years beginning this 

spring. Appropriations legislation has secured funding for screening at 

the gaseous diffusion plants in past years, and a provision may be 

required for fiscal year 2007. 

Thank you for your consideration. 

MR. WHITFIELD. Mr. Ervin, thank you. 

[The prepared statement of Rob Ervin follows:] 
47

PREPARED STATEMENT OF ROB ERVIN, PRESIDENT, UNITED STEEL WORKERS LOCAL 5-550 

My name is Rob Ervin and I have worked at the Paducah Gaseous Diffusion Plant for 

17 years. I am currently employed by USEC as an Instrumentation and Controls 

Technician. In addition to my craft responsibilities, I serve as the President of USW 

Local 550, which represents over 700 hourly workers involved in production for USEC 

and Environmental Management program activities for Department of Energy (“DOE”) 

contractors and subcontractors at the Paducah plant, including Bechtel Jacobs, Swift and 

Staley, Weskem, and Uranium Disposition Services (the DUF6 disposition project). My 

home address is 398 Country Club Estates, La Center, KY 42056. Please contact me at 

270-442-3668. 

At the outset, I would like to recognize the leadership provided by Congressman Ed 

Whitfield over the many years he has represented our plant. His work covers pension 

protections in the USEC Privatization Act of 1996, holding oversight hearings on the 

problems created by privatization, negotiating a Memorandum of Agreement to guarantee 

operations of the Paducah enrichment plant through the year 2010, and expanding the 

former worker medical screening program. He helped enact legislation to dispose of a 50-

year legacy of depleted uranium hexaflouride (“DUF6”) at Paducah, and served as a lead 

House sponsor of the Energy Employees Occupational Illness Compensation Program 

Act (“EEOICPA”). He used his perch on Energy and Commerce to track DOE’s failures 

in implementing its part of EEOICPA, and then worked with the House Armed Services 

Committee to transfer the DOE’s program over to the Department of Labor in 2004. 

Most recently he joined on a bipartisan basis with Representative Ted Strickland in 

enacting legislation to protect the pensions and retiree health care benefits of USEC and 

Bechtel workers. This list seems long, because there has been a lot accomplished. Our 

membership thanks him and his staff for these and many other efforts. 

Today my testimony will focus on: 

1) Ensuring that the pension and retiree health care benefit continuity continue 

undisturbed at the Paducah site for USEC workers who transfer to the DOE’s 

cleanup contractors, and the transition to the new remediation contractor is 

seamless; and 

2) Continuing the DOE former worker medical screening program at Paducah. 

1. Pension continuity: DOE is not complying with Section 633 of the Energy Policy 

Act of 2005

Today, workers employed at Paducah have the right to carry pension service credits 

and vesting in retiree medical benefits from USEC to the cleanup contractors at Paducah 

and Portsmouth. But DOE wants that to end. No matter the changes to employment 

arrangements—such as USEC privatization, the shift to an integrating contractor with 

multiple subcontractors, or the replacement of the Management and Operation contractor-

-pension and retiree benefit portability has been the rule at the Paducah Gaseous 

Diffusion Plant (“PGDP”) throughout its 50+ year history. 

In 1998, Bechtel Jacobs established the Multiple Employer Pension Plan (“MEPP”), 

a defined benefit plan, to continue the practice of assuring pension portability at a time 

when employment relationships were changing frequently. The MEPP welcomed USEC 

employees who transitioned to DOE contractors after losing their jobs from the 

downsizing or closure of a uranium enrichment plant. The MEPP also enhanced 

employee mobility by allowing workers to move between Bechtel Jacobs and its various 

tiers of subcontractors performing work for the Environmental Management Program 

while assuring seamless pension portability. 

When DOE issued Requests for Proposals (“RFPs”) for remediation and 

infrastructure contractors in November 2003 to replace Bechtel-Jacobs (“BJC”) at 
48

Portsmouth and Paducah, it narrowed the definition of which workers will be 

“grandfathered” and therefore eligible to participate or transfer into the MEPP.1

 USEC 

workers and those BJC workers above first tier supervision were excluded. These DOE 

changes undermined the enlightened social policy embodied in the MEPP: to promote 

and ensure pension/retiree medical portability. 

Two documents govern benefit portability at Portsmouth and Paducah: 

1) The Bechtel Jacobs Multiple Employer Pension Plan (“MEPP”). This plan 

sets forth the definition of “Grandfathered” employees covered under the plan. 

Grandfathered employees include hourly USEC workers who were covered by 

a “bargaining unit transition agreement” (“BUTA”). The DOE’s new 

Infrastructure and Remediation Contractors are required to become participants 

in the MEPP within 90 days of starting work. 

2) The Bargaining Unit Transition Agreement (“BUTA”). This allows hourly 

workers to transition from USEC or from DOE’s former contractor, Lockheed 

Martin Energy Systems over to Bechtel Jacobs and its subcontractors. This 

agreement, which was approved in February 2000 and is in effect at Paducah 

today, authorizes “grandfathered” hourly employees to retain their USEC 

pension service credit and vesting in the retiree medical benefits plan.2

 

The Bargaining Unit Transition Agreement (Section 8(c)) states: 

“For clarification purposes, any employee who transfers from USEC to Bechtel 

Jacobs or its first or second tier subcontractors, who was employed on the date that 

this addendum is ratified [February 22, 2000] and formally concluded shall be 

classified as a “Grandfathered Employee” without regard to the date that he or she 

transfers from USEC to Bechtel Jacobs or its subcontractors.” 

 

1

 By way of history, both USEC and many of the DOE cleanup workers were once in the same 

pension plan: the Lockheed Martin Energy Systems plan. The MEPP and the USEC pension plan 

were spun out of the Lockheed Martin Plan in the 1998 and 1999, respectively. The MEPP allows 

USEC workers to rejoin a pension plan which they had previously been part of prior to privatization. 

2

 The term grandfathered employee means: “(A) The individual was either: (1) an employee of 

Lockheed Martin Energy Systems, Lockheed Martin Utility Services, or Lockheed Martin Energy 

Research (collectively, LM) on March 31, 1998; or (2) a bargaining unit member of the Paper, 

Allied-Industrial, Chemical and Energy Workers International Union, AFL-CIO (PACE) (at the East 

Tennessee Technology Park) who was on the LM recall list on March 31, 1998; or (3) a bargaining 

unit member of the Atomic Trades and Labor Council (ATLC) (at the Oak Ridge National 

Laboratory or Y-12 Plant), or PACE (at the Portsmouth Gaseous Diffusion Plant or Paducah 

Gaseous Diffusion Plant) who was either an LM employee, a United States Enrichment Corporation 

(USEC) employee, or on the LM or USEC recall list on the date of the applicable Bargaining Unit 

Transition Agreement; and (B) The individual was either: (1) subsequently employed by the 

Contractor or its first-tier or second-tier subcontractors for work under the Contract prior to April 

1, 2000; or (2) a USEC employee (at the Portsmouth Gaseous Diffusion Plant or Paducah Gaseous 

Diffusion Plant) who transitions directly to the Contractor or its first-tier or second-tier 

subcontractors for work under this Contract after March 31, 2000; or (3) a former USEC employee 

(at the Portsmouth Gaseous Diffusion Plant or Paducah Gaseous Diffusion Plant) who received an 

involuntary reduction-in-force after March 31, 2000, and is subsequently hired by the Contractor or 

its first-tier or second-tier subcontractors for work under the Contract before January 1, 2001; or 

(4) covered by an applicable Bargaining Unit Transition Agreement for which no employment 

deadline is specified.” (emphasis added)
49

In addition there is a chart in the BUTA which spells out the categories of USEC 

workers who will be allowed to transfer pension and retiree health care service credit 

when they move from USEC to Bechtel Jacobs and/or its subcontractors, including: 

 1) Employees whose jobs were transitioned from USEC to Bechtel; 

 2) Employees who voluntarily quit USEC and are employed by Bechtel; and 

 3) Employees who are laid off and receive severance from USEC. 

The BUTA states that it is intended to be binding on successor contractors at 

Paducah. DOE does not dispute that pension portability has been and is in effect today. 

However, DOE has put in place the mechanics to eliminate this arrangement on a going 

forward basis with new contractors, such as Paducah Remediation Services. It has 

indicated to cleanup and infrastructure contractors that the government will only 

reimburse a contractor’s pension plan contributions for a narrow group of employees: 

those non-managerial employees of Bechtel Jacobs or its subcontractors who are vested 

participants in the MEPP at the time of contract transition. Specifically excluded are 

pension and retiree benefits continuity for USEC hourly workers. 

In response to concerns about the DOE’s Request for Proposals, Representatives 

Whitfield, Strickland and Portman, as well as Senators Bunning, McConnell, DeWine 

and Voinovich asked DOE to ensure that USEC workers could keep their pension 

transfer rights as DOE changed contractors. Mr. Whitfield sent then-Secretary of Energy 

Abraham a December 18, 2003 letter expressing concerns about the loss of pension 

continuity. Senators McConnell and Bunning followed with a December 19, 2003 letter. 

These concerns were raised in a field hearing before the Senate Energy Committee held 

here in Paducah on December 8, 2003. 

After the RFPs were issued, meetings ensued with senior DOE officials, questions 

were asked at Congressional hearings, and letters were written without a satisfactory 

response. DOE received a detailed briefing showing there would be a negligible 

economic impact to the government from permitting USEC workers to retain pension 

continuity when they transfer into the MEPP. A so-called “carve out” provision in the 

pension plan provides that the DOE contractors are only responsible for a pro rata

allocation of liability based on an employee’s years of service with the cleanup 

contractors. USEC is liable for the balance. This means workers will receive 2 pension 

checks instead of one. However, since earned benefits are effectively back loaded in later 

years as workers’ earnings increase, it is important to keep pension service credit intact 

between contractors. 

 In the Spring of 2005, DOE had already announced the award of new contracts in 

Portsmouth and Paducah, but the pension portability issues were not resolved. 

Representatives Whitfield and Strickland attached an amendment during markup to the 

Energy Policy Act of 2005 (H.R. 6). This provision codifies the benefit continuity 

arrangements at Portsmouth and Paducah that were in effect on April 1, 2005 (the date 

coincides with the committee’s deliberations) and ensures that USEC workers will be 

eligible to participate in or transfer into the MEPP and its related retiree medical benefit 

plan. 

As signed by the President on August 8, 2005, Section 633 of the Energy Policy Act 

of 2005 (P.L.109-58) states: 

To the extent appropriations are provided in advance for this purpose or are 

otherwise available, not later than 30 days after the date of enactment of this 

paragraph, the Secretary shall take such actions as are necessary to ensure that any 

employee who-- 

(A) is involved in providing infrastructure or environmental remediation services 

at the Portsmouth, Ohio, or the Paducah, Kentucky, Gaseous Diffusion Plant;

(B) has been an employee of the Department of Energy’s predecessor 

management and integrating contractor (or its first or second tier 
50

subcontractors), or of the Corporation3, at the Portsmouth, Ohio, or the 

Paducah, Kentucky, facility; and

(C) was eligible as of April 1, 2005, to participate in or transfer into the Multiple 

Employer Pension Plan or the associated multiple employer retiree health care 

benefit plans, as defined in those plans, shall continue to be eligible to 

participate in or transfer into such pension or health care benefit plans.

(emphasis added)

 

This legislation obligates the Secretary of Energy to ensure that pension and retiree 

benefits rights that were in place on April 1, 2005 for USEC and DOE contractor workers 

will continue to be in place for workers at Portsmouth and Paducah who will be 

performing DOE cleanup work. 

DOE vigorously lobbied against this pension provision during the House-Senate 

conference during July, 2005. Having lost the legislative fight, DOE rewrote the 

legislation through a September 13, 2005 implementation plan which excludes USEC 

workers (see: Attachment “A”). 

DOE’s plan states that employees eligible to participate in the MEPP are only those 

“who were participating in the MEPP (both vested and non-vested) on April 1, 2005.” 

This implementation plan means that universe of employees who will be able to 

participate in the MEPP and the related health insurance plan is much narrower than 

Congress had specified in Section 633. It reads coverage for USEC workers right out of 

the law. 

 Representatives Whitfield and Strickland challenged that interpretation in an 

October 3, 2005 letter to DOE. A January 12, 2006, DOE response contends that USEC 

workers at Portsmouth and Paducah will not have a right to transfer their pension benefits 

with them when employed by new DOE contractors, if the DOE contractors they go to 

work for were not previously parties to a BUTA on April 1, 2005. 

This analysis ignores the purpose of the law, which was to ensure pension continuity 

for the new contractors being hired by the DOE, who, by definition, could never have 

been signatories to the Bargaining Unit Transition Agreements before they were hired. 

DOE has chosen to overlook the language which confers a clear cut obligation by the 

Secretary of Energy to continue benefit eligibility. Section 633 states: 

“the Secretary shall implement such actions as are necessary to ensure that any 

employee who ... [was eligible to participate or transfer into the MEPP and related 

retiree plans on April 1, 2005] ... shall continue to be eligible to participate in or 

transfer into such pension or health care benefit plans.” 

This language is clear: DOE has a forward looking obligation to continue pension 

continuity for all employees who had certain rights on April 1, 2005. This could be 

accomplished by DOE allowing its new contractors to become signatories to the BUTA 

and ensuring that employer contributions to the benefit plans will be deemed an 

allowable cost. Nowhere does Section 633 require that new contractors had to already 

have been signatories to a BUTA back on April 1, 2005. Even if a strained reading of the 

law could be construed this way, Congress never intended such an illogical result, 

because it knew that new contractors would begin work at Portsmouth and Paducah 

sometime after June 2005 and could not have been signatories at a site where they had 

never worked before. 

Using this erroneous reading of the law, DOE recently advised that USEC workers 

who transfer to the Paducah “infrastructure” contractor, Swift and Staley, will be able to 

 

3

 The term “or of the Corporation” specifically refers to USEC (post privatization) in the USEC 

Privatization Act of 1996. 
51

bring their pension service credit with them, because Swift and Staley (coincidentally) 

was a signatory to the bargaining unit transition agreement on April 1, 2005--as a former 

subcontractor to Bechtel Jacobs. Swift and Staley was unable to confirm this change in 

DOE’s position. DOE has, heretofore, barred the transfer of pension service credit to 

Swift and Staley for USEC workers. 

 DOE’s position is that USEC employees cannot bring their service credit with them 

to Paducah Remediation Services, the new Paducah “remediation” contractor, because 

Paducah Remediation Services was not a signatory to the BUTA. This disparate 

treatment arises out of DOE’s misplaced reading of the law, wherein they link pension 

continuity to whether a given DOE contractor participated in the BUTA on April 1, 2005, 

rather than to the plain language in 633 which links pension continuity to the universe of 

employees who had the eligibility to participate in or transfer into these multi employer 

benefit plans on April 1, 2005. 

DOE wants to reduce the number of workers in its contractors’ defined benefits plans 

as part of a national pension agenda. While cutting off employees from defined benefit 

plans is an unfortunate trend in the private sector, it is not the government’s job to second 

guess Congressional directives to continue such benefits. Using a groundless legal 

position which overlooks the Secretary’s legal obligation in Section 633, DOE is 

determined to reduce their legacy pension costs by taking it out of the pocket of workers. 

As much as we all want the Paducah plant to remain competitive in the enrichment 

business, we are mindful of the economic challenges presented by rising electricity costs 

and the development of lower cost centrifuge technology. In the short term, as USEC 

workers seek to fill available openings with the cleanup contractors, the loss in pension 

continuity is a concern—though the number of workers impacted will not be large. 

However, the possibility of further downsizing, coupled with the potential for future DOE 

decommissioning jobs, makes pension continuity at Paducah an imperative for a much 

larger number of workers and a precedent that should not be tampered with. 

If DOE is not prepared to comply with Section 633, Congress may need to take 

further steps to enforce compliance. Without pension continuity assured for USEC 

workers, we believe it will be difficult to ensure a seamless transition to the new 

remediation contractor. 

 

2. DOE Former Worker Medical Screening Program at Paducah

The DOE’s former worker medical screening program, which is run by a Queens 

College-USW consortium, has screened 2,597 workers at Paducah between May 1, 1999 

and December 31, 2005. The “basic” screening program was expanded in November 

2000-- after the discovery of unmonitored worker exposures to transuranics at the 

gaseous diffusion plants-- to include an Early Lung Cancer Screening Program and 

allowed current workers to participate. Using a low-dose CT spiral scanner on a mobile 

unit traveling between Portsmouth, Paducah and Oak Ridge, 1,620 individuals have 

received early lung scans in Paducah and 5,829 at the three gaseous diffusion plants. 

Follow up scans have been provided where suspicious lung nodules are found. 

The low dose CT Spiral Scan is 4 times more likely than a chest X-ray to detect 

cancer at an early stage, and has been very popular with workers. So far, the program has 

identified 44 cancers using the CT scan. Eighty-one percent (81%) of these cancers were 

detected at Stage I, when the cancers are most operable and the chances of saving a life is 

the greatest. Preliminary results published by Cornell indicate that if lung cancers are 

detected at Stage I, there is a curability rate of more than 90%. This compares with a 

survival rate of 5%-15% for those whose lung cancers are detected at Stage III. The 

results from the Queens-USW medical screening program are being shared with the 

International Early Lung Cancer Program (www.IELCAP.org). 

As participation has started to wane at the GDPs, DOE has asked that the early lung 

cancer screening program ramp down in February 2006. For most individuals, early lung 
52

cancer screening will not be available after June 1, 2006. Current and former gaseous 

diffusion plant workers are being sent notices advising them that this their last chance for 

free early lung cancer screening. However, beginning June 1, DOE has budgeted 

resources for outreach and the continuation of the basic medical screening program for 

approximately 125 participants/year for the next two years (as compared with 321 in 

2005.) 

Historically, the Energy and Water Appropriations Act has contained language for 

the medical screening program as part of the budget for DOE’s Office of Environment, 

Safety and Health (Defense), and a provision may be required in FY 07 to continue this 

program. 

Conclusion

The Department of Energy is in violation of Section 633 of the Energy Policy Act of 

2005 with respect to assuring pension and retiree health care benefit continuity for USEC 

hourly workers. If DOE is not going to comply with Section 633, then Congress may 

need to take further steps to ensure compliance. We hope that DOE has not made it a 

routine practice to require two acts of Congress to implement a given Congressional 

direction, as it did with the DUF6 project. Absent a resolution of this issue, it will be 

difficult to manage a seamless transition from Bechtel Jacobs to the new contractor at 

Paducah. 

 DOE’s former worker medical screening program is going to be operating with a 

smaller footprint for the next two years beginning June 1, 2006. Historically, 

appropriations legislation has secured funding for screening at the gaseous diffusion 

plants, and a provision may be required for FY 07. 

Attachment “A”

(September 13, 2005 Implementation Plan)

DOE Implementation of Section 633 

of the Energy Policy Act of 2005 

• Bechtel Jacobs Company (BJC) will continue to administer the Multiple Employer 

Pension Plan (MEPP) and the Multiple Employer Retiree Health Care Benefit Plan 

(MEWA) (the “Plans”) for employees of the new infrastructure and environmental 

remediation contractors at the Portsmouth, Ohio, and the Paducah, Kentucky, 

Gaseous Diffusion Plant sites who are eligible to participate in the Plans as of April 

1, 2005. 

• Employees of either BJC or its first-tier and second-tier subcontractors who were 

participating in the MEPP (both vested and non-vested) on April 1, 2005, will 

continue to be eligible to participate in the MEPP, provided that they: (1) are 

employed by one of the new infrastructure or environmental remediation contractors; 

and (2) continue to meet the criteria for the definition of a “Grandfathered 

Employee” in the MEPP.

• Employees of either BJC or its first-tier and second-tier subcontractors who were 

participating in the MEWA on April 1, 2005, will continue to be eligible to 

participate in the MEWA provided that they: (1) are employed by one of the new 

infrastructure or environmental remediation contractors, and (2) continue to meet the 

criteria for the definition of a “Grandfathered Employee” in the MEWA. 

• BJC has submitted draft language to amend the MEPP and MEWA to the 

Contracting Officers for the new contracts for approval of the language and the costs 
53

associated with amending the Plans. The proposed amendments provide for the new 

contractors’ participation as Plan sponsors. DOE is reviewing the language of the 

proposed amendments to ensure that employees eligible to participate in the Plans as 

of April 1, 2005, retain their eligibility. DOE anticipates approval of the draft 

language in the near future. 

MR. WHITFIELD. I tell you what, I would love to get that speech from 

you. 

We should have asked Mr. Ervin to come up and ask some questions 

to Mr. Rispoli. 

[Laughter.] 

MR. WHITFIELD. I thank all of you for your testimony. It was very 

good, and there are so many important issues. We genuinely appreciate 

that. 

Mr. Ervin, let me ask you this question, we’re hopeful that DOE will 

reverse their position on this issue, and if not, then maybe we will be 

required to pursue some additional legislation. But I was curious, have 

you all considered a lawsuit on this issue? 

I do know we live in a litigious society, and I don’t like to 

recommend lawsuits, but I was just curious if you all have discussed it. 

MR. ERVIN. There has been some discussions both with myself and 

the president of the local at the Portsmouth plant. 

MR. WHITFIELD. And I know that Mr. Miller here is an attorney 

himself. Are you, Mr. Miller? 

MR. MILLER. No, sir, I’m not. 

MR. WHITFIELD. Well, I’ve talked to you so many times that when I 

leave you, my head’s usually spinning, so I assumed you were. 

[Laughter.] 

MR. WHITFIELD. But from your knowledge of this language in this 

Energy Policy Act, there’s not anything vague about that language is 

there? 

MR. MILLER. Sir, I think both the legislation which makes it very 

clear that there is a forward-looking obligation and particularly -- just not 

to restate what the law is -- because the law is what it is. Presumably, 

you’ll put a copy of this in the record so that anyone who looks at it can 

see it. 

But it makes it very clear that the Secretary shall implement such 

actions as are necessary to ensure that employees who were eligible shall 

continue to be eligible to participate or transfer into such pension plan or 

health care benefit plan. I don’t know what’s ambiguous about this. 

Now, whether the Secretary, as Mr. Ervin pointed out, is simply just 

deciding to fix his legal position around a national preordained pension 

agenda or not, I don’t know, but Mr. Rispoli certainly led us to believe, 

well, we have to consider our legal position in the context of our national 
54

pension policy plan. Well, I don’t know that he has that liberty to do 

that. I thought Congress enacted the laws and that the Administration 

was supposed to follow them. 

So I think it’s pretty clear. The report language is pretty clear. I 

think the real sticking point is that the people who lost the legislative 

fight aren’t prepared to say, “Okay. We’re ready to move on and comply 

with the Congressional directive.” And I think it’s pretty clear. 

MR. WHITFIELD. Well, it has been totally baffling to us, because it is 

very clear, the report language was very clear. 

And, Mr. Ervin, thank you again for your testimony. 

MR. ERVIN. Thank you. 

MR. MILLER. Mr. Whitfield, if I could just follow up on one other 

point, that maybe if DOE could be considered just rethinking this issue 

one more time, as you suggested, there might be one thing they’ve 

overlooked, and that is that the Bargaining Unit Transition Agreement 

that is in place on April 1st had a clause in it which said it is intended to 

be binding on successors, upon future contractors that come to the site. 

And maybe their lawyers overlooked that and could reconsider that in 

their re-evaluation so we wouldn’t have to go down this road any further. 

MR. WHITFIELD. Well, we’ve had a number of meetings with them, 

and we’re going to be having more. So thank you for that suggestion. 

Mr. Hughes, your contract, you’ve testified, expires on April 23rd of 

2006. When do you actually leave, and when does Paducah Remediation 

Services actually take over? 

MR. HUGHES. We will leave on that day. And in the case of 

Portsmouth, actually we left sometime after that, because there was some 

things that the subcontractors or the new, I should say, the new prime 

contractors needed some additional help with. And working with the 

Department of Energy, we agreed to continue to provide that help with 

them until they could fully get up and operate on their own. 

So the intent is to be completed in April and be off, but -- if it takes a 

little longer -- we’ll continue to help them. I should say that in the 

transition itself, I believe why these have been so successful is the 

transition is starting immediately, and the transition, as I mentioned in 

my testimony there, we treat it like we treat a project. 

There’s a detailed schedule for that transition. There’s over 400 

elements associated with the transition. We have a full-time project 

transition manager assigned to manage just that, while we also have a 

full-time project manager that will continue to focus on the operations 

piece so that we don’t get distracted. 

So the turnover, those 400 elements, some of those will get turned 

over and completed quicker with the intent to complete them all by that 

date so that we can move on. So far it’s worked very well, I believe, in 
55

the previous transitions, and that’s our commitment, to make sure it 

works well on this one, too, so that they don’t miss a beat in the process. 

MR. WHITFIELD. Now, Bechtel Jacobs has a contract, separate 

contract, with the government to implement or administer the Multiple 

Employer Pension Plan program. 

When does that contract expire? 

MR. HUGHES. That’s true, Mr. Chairman. That contract is part of our 

overall contract where we’re operating down at Oak Ridge as the 

accelerated cleanup contract. It currently expires, that is supposed to be 

up in September of 2008. And under that contract, that’s the mechanism 

by which we will continue to manage both the pension and benefits at 

Portsmouth and Paducah. 

MR. WHITFIELD. Have you or your attorneys at Bechtel Jacobs 

looked at Section 633 and come to any conclusions, or do you feel like 

you can’t talk about that? 

[Laughter.] 

MR. HUGHES. What I heard you say, Mr. Chairman, and also, 

Assistant Secretary Rispoli, is that there has been a letter response from 

the Department. You are going to look at that in more detail. The 

Department’s looking at that currently. And as part of that, we need to 

have the opportunity to also look at that. We have not taken a look at the 

legislation and tried to do our own analysis. I don’t think that’s 

appropriate to do right now. 

But we certainly will help or support or review that as part of trying 

to sort this out, if needed. I haven’t had a chance to do any of that yet. 

MR. WHITFIELD. Judge Orazine, you mentioned this payment in lieu 

of taxes, and it was my understanding that in the agreement that USEC 

had in leasing this property from the government that they had agreed to 

pay taxes. 

Is that your understanding? 

JUDGE ORAZINE. Looking at copies of the Privatization Act now, it 

looks like they’re directed to pay property taxes or in lieu of taxes. But 

as you say, we may have to get some lawyers to determine that. But we 

do not receive anything from USEC or DOE. 

MR. WHITFIELD. You haven’t received any checks at all. 

JUDGE ORAZINE. Not for property or in lieu of property taxes. 

MR. WHITFIELD. But I think it is set out in there, I thought. I don’t 

want to leave this hearing and everybody filing lawsuits against 

everybody. 

[Laughter.] 

JUDGE ORAZINE. Mr. Chairman, I did have one other comment that I 

neglected to make. It wasn’t in my written statements. 
56

But I heard Congressman Stupak ask Mr. Rispoli talk about the 

contract with Bechtel Jacobs, and we worked well with them. But the 

length of the new contract, I think, is three or three and a half years, and 

we would much rather see a longer contract, because he talked about 400 

issues in the transition. There’s just an awful lot of work and time lost in 

the changing of these companies and the new contracts. It’s been kind of 

regrettable. 

MR. WHITFIELD. You and Mayor Paxton both placed a great deal of 

emphasis on economic development. You both talked about 

reindustrialization, and we all talked about the fact that Oak Ridge has 

DOE employees there for that explicit purpose. And you referred to this 

letter of December 14th that you all wrote to me in which you were 

asking that we try to obtain an appropriation for 2007 of $150,000 -- 

JUDGE ORAZINE. Correct. 

MR. WHITFIELD. -- for a person at this location for that purpose. 

And as I said, I mean, if Oak Ridge, if they’re going to have people paid 

for at government expense for this, then we most certainly should. 

Now, as you know, for the last five, six, seven years, we’ve had the 

CRO here that has helped in that. They have been involved in a number 

of efforts, including some spec buildings, including all sorts of things, 

and I want to commend Mr. Anderson and others who have been 

involved in that. 

As you know, in 2006, there was not any appropriation for the CRO. 

And that doesn’t reflect about what’s going on in Paducah, that is 

nationwide, and basically they just shut down the funding for that. 

But if we are successful in getting $150,000 or so to get some 

government employees under the Department of Energy working on this 

issue, are you all still going to make an effort to obtain funding for the 

CRO, or do you feel like that, I mean, I’m not optimistic that we’re going 

to be very successful in that, but it seems like you might be moving in 

two different directions here. 

JUDGE ORAZINE. The Mayor and I talked about, you know, the loss 

of the CRO, especially the funding. I mean, we talked about setting up a 

task force, and we also talked about maybe hiring or putting some money 

together. 

You want to relate to that? 

MR. PAXTON. Well, we understand, Mr. Chairman, that CRO is no 

longer functioning. It’s impossible for the Judge and I to stay on top of 

all the issues that are going on out at the plant. We realize that. So if the 

CRO is not going to be the vehicle, then maybe we need to set up some 

other vehicle. 

And if you’ll remember, we did set up a task force with the centrifuge 

plant. Mr. Ken Wheeler was the Chairman, and whether it is you, 
57

whether it is Senator McConnell, or Senator Bunning, or the Governor or 

whoever had a question about the centrifuge plant in Paducah, Kentucky, 

they knew to call Mr. Wheeler and he would address it. 

So maybe we need to bring new people that are well respected by our 

delegation, by our Governor, who we meet with on a regular basis that 

can give us ideas on how we can be more successful, because here’s 

what we want. We want to continue the cleanup while the plant is open, 

like is going on now. We want the plant to stay open as long as we 

possibly can keep it open. Once it closes, we want to ratchet up the 

cleanup and, as soon as possible, make that area available for 

reindustrialization. 

I was talking to Congressman Stupak today and told him there’s 

4,000 acres out there. Maybe half of that could be a nature preserve, and 

part of it could be an industrial park. Right next to our airport, it’s a 

wonderful site. 

So we’re interested in getting this cleanup accomplished as soon as 

we possibly can. We don’t want DOE constantly in here. Although we 

love the money that’s coming in and it’s very beneficial, we want it 

cleaned up. We want our property so we can create jobs and more 

opportunities. 

MR. WHITFIELD. Thank you. 

MR. STUPAK. I know I’m from up north, but what’s CRO? 

JUDGE ORAZINE. Community Reuse Organization. 

MR. STUPAK. Is that just confined to Paducah then? 

JUDGE ORAZINE. No. They were set up, I don’t know how many 

years ago. We kind of got in on the tail end of it. It’s been very 

beneficial for our community. They focused on cleanup issues, the 

assets out there. They had a pretty broad agenda, but they’ve been very 

useful. And the money that come through CRO we’ve used for 

economic development. I mean, they have funds that we’ve built spec 

buildings and other such things, industrial parks. 

MR. PAXTON. It was very successful throughout the country for 

many, many years, but Congress decided no longer to fund it. And we 

got in, like the Judge said, on the tail end of this thing. It was successful 

for a few years, but now it’s no longer successful. So we’ve got to look 

for new ways to make things happen. 

MR. WHITFIELD. Well, Mr. Stupak, any questions you want. 

MR. STUPAK. Thanks, Mr. Chairman. 

Mr. Hughes, getting back to the pension, you’re going to be 

administering it until September ‘08, correct? 

MR. HUGHES. That’s correct. 
58

MR. STUPAK. So who determines if employees are eligible, then, to 

participate in that pension between now and September of ‘08? You or 

DOE? 

MR. HUGHES. Well, we carry out the responsibility of looking at 

each potential eligible employee based on the guidelines that are 

established. So, you know, it would be our responsibility that if 

somebody were to be hired in, we’d look at our guidelines, look if they 

meet this qualification, such as grandfathered, and then we would review 

whether they would be eligible or not eligible under that. 

MR. STUPAK. So you wouldn’t have to get permission from DOE? 

MR. HUGHES. We would go back to DOE under certain 

circumstances and ask them if there was a need to, like in this situation, 

we’d wait until they make a determination based on the contractor. 

MR. STUPAK. How many years do you have to have before you’re 

vested in this pension system? 

MR. HUGHES. I don’t know the answer to that. 

MR. STUPAK. Okay. 

MR. HUGHES. I’m sure we’ve got that. 

MR. STUPAK. Mr. Miller. 

MR. MILLER. Five years. 

MR. STUPAK. Five years. 

Are there any other -- besides five years, any other guidelines you 

could give us to determine whether or not an employee would be vested 

or be able to participate between now and September ‘08? 

MR. HUGHES. There are specific guidelines, and instead of me just 

saying those, I can provide those to you. I’d like to provide those to you 

in writing instead of just saying what they are here off the top. 

Would you like that to be done? 

MR. STUPAK. Yes, please. 

MR. HUGHES. Okay. I’ll do that. 

MR. STUPAK. You know, after we wrote the law in the Energy 

Conference Report, which I was part of, did we -- did you get any new 

guidance from DOE, then, based on Section 633 that we should do 

something different. 

You’ve got your pension system has not received any new guidance 

or guidelines? 

MR. HUGHES. I’m not aware that we received any guidelines, but 

we’re waiting for the interpretation of that legislation. 

MR. STUPAK. So they’re coming probably. 

Mr. Hughes, I mentioned earlier this memorandum of September 

30th, and I asked the Assistant Secretary about this phosgene that was 

first noted in October of 2002. It indicated that -- on the second page -- 

that we spoke with management officials for the conversion facility who 
59

agreed with potential safety concerns. The official advised us that the 

contractor operating the conversion facility had not been told by DOE to 

expect phosgene or fluorophosgene in the cylinders. 

Was anyone from your company aware of phosgene from October of 

2000 until recently? Do you know? 

MR. HUGHES. Unfortunately, I wasn’t here, either, at that point in 

time. So I don’t know what knowledge there was, I’ll say, specifically 

within Bechtel Jacobs for our responsibility of managing the cylinders 

themselves. 

However, I will say once we were made aware of the situation from 

the alert, we immediately took action, as was noted earlier, to ensure that 

we based all the information that was provided by the IG, that we knew 

what the potential was, what to do, and we took action to make sure that 

we understood and communicated that to all parties. 

MR. STUPAK. But the alert is dated September 30th, 2005. 

MR. HUGHES. Correct. 

MR. STUPAK. So from that point forward, I understand you have 

been very active in getting this resolved. Until then, you probably had 

no knowledge of the phosgene? 

Because it says here not to tell DOE -- had not told by DOE. 

MR. HUGHES. I can’t go back to the 2000 and 2002. 

MR. STUPAK. Sure. 

MR. HUGHES. But we were actively working with the IG as they 

were doing their investigation. 

MR. STUPAK. Do you know what time frame? 

MR. HUGHES. It was -- I’ll just say from September back -- I don’t 

remember how long their investigation went on. But as they initiated 

this, we cooperated with them. We also, as part of that, were interested 

in pulling records, reviewing things. So we didn’t wait until that alert 

came out to make folks at least knowledgeable of that within our own 

working group and that we were responsible for managing that. There’s 

a potential there. 

MR. STUPAK. Sure. 

MR. HUGHES. I think once the alert came out, the IG felt they had 

enough information to at least issue that. We then more formally went 

into taking action on this. 

MR. STUPAK. Mr. Ervin, would the union know anything about this, 

the phosgene? 

MR. ERVIN. As I understand it, the only notice that we received was 

when we read “The Courier Journal” article. 

MR. STUPAK. And that was recently? 

MR. ERVIN. Yes. 
60

MR. STUPAK. Would this discovery of phosgene being available as 

early as 2000, would that lead to more credence to have more testing? 

You testified that your funding for testing -- the cancer 

testing/screening runs out in ‘06. Based upon this information, would 

that cause you concern on behalf of the health and safety of your workers 

that maybe we should continue testing, especially with the idea of 

phosgene being around? 

MR. ERVIN. Absolutely. It’s an additional hazardous element that’s 

now been discovered in our work environment. 

MR. STUPAK. Okay. Mr. Ervin, if I may, how many USEC 

employees do you think might transition over to the new cleanup 

contractor where these pension issues are? 

MR. ERVIN. I don’t have any employment figures right now. There 

are 159 workers currently employed by Bechtel and Weskem. 

MR. STUPAK. Okay. So by that answer then, the 159, do you mean 

that’s 159 former USEC employees? 

MR. ERVIN. No, sir. There’s 159 employees currently employed by 

Bechtel Jacobs and Weskem, their subcontractor. 

MR. STUPAK. Okay. 

MR. ERVIN. We’ve not had any contact as of yet with Paducah 

Remediation Services. We don’t know what their employment target 

levels are or what might become available after they take over. 

MR. STUPAK. Okay. Judge or Mayor either one, you have this CRO 

here, Community Reuse, but do you specifically, McCracken County or 

Paducah, do you have a local reuse authority specifically assigned to the 

Paducah Gaseous Diffusion Plant site? 

JUDGE ORAZINE. Well, that’s primarily what the CRO did. They 

worked on reuse of it. And the moneys that were appropriated to the 

CRO, they tried to utilize those for the entire community. It went outside 

of McCracken County, because it was based on -- 

MR. STUPAK. Sure. 

JUDGE ORAZINE. They would loan money for, like, spec buildings 

based on how many employees you had there. We even went over into 

Southern Illinois. So it was a great benefit to us. 

Does that answer your question? 

MR. STUPAK. Reuse based -- I’m more familiar with military base 

reuse, and we had some in my district where we actually had the local 

units of government be the reuse authority. Move the Federal 

government out and move the state out, and once we had local people 

making local decisions as to what should occur on the property, it was 

much easier and much more successful. 

And we had a base reuse fund, much like your CRO, that we could 

tap into for certain aspects. That has also expired. We’ve also 
61

decommissioned a nuclear power plant in my district in which cleanup 

remediation has gone through. And, again, we’ve had local reuse people. 

The Mayor may be on there, a doctor may be on there, a teacher may be 

on there. 

But we’ve just found that when you’re trying to reuse an area that 

was controlled by a larger governmental unit -- in this case, the Federal 

government -- it always went better, because instead of having the 

Federal government or state people make the decision, the local people 

made the decision, and it was much more successful. That’s why I asked 

that question, and that’s why I want to know about the CRO. I figure it 

was along that line. 

The Secretary said in his testimony in the questions I asked that he 

would be willing to work in a partnership. Has that been occurring? 

You mentioned you had to go to Federal court to do that or something 

to get some kind of feedback into what’s going on. Has there been a 

good working relationship with DOE on reuse of this property? 

JUDGE ORAZINE. We’ve had a very good relationship with DOE, and 

we’ve tried to assist them when they’ve had issues with the EPA or the 

State on their permits, things like that. You know, if it took some kind of 

political muscle, if you want to call it, we would try to help them on 

issues, and we even had the task force to try to keep the local elected 

officials, you know, focused on this. 

When the Mayor and I leave a meeting, you know, there are alligators 

that get a hold of us and our attention. So we’ve used our task force on 

cleanup issues. And that’s why we -- 

MR. STUPAK. I didn’t think you had alligators this far north. 

[Laughter.] 

JUDGE ORAZINE. Well, they’re not very big, but there is a hell of a 

lot of them. 

MR. STUPAK. On this 4,000 acres, Mayor, that you mentioned, have 

you approached DOE and said, “Look, you’re not using X amount. Let 

us start using it now for an industrial park or reuse or conservancy or 

whatever.” 

MR. PAXTON. Well, the problem with that is that we don’t know 

what part of that is clean and what part of it is not clean. So at this 

particular time, I don’t believe that DOE is capable of allowing us to use 

part of that. If they’re aware of an area that is available for economic 

development use out there, I’m not aware of it. 

And, you know, we have a great relationship with Bill Murphie. Bill 

Murphie’s located in Lexington and is doing a good job. But my 

understanding is that the whole area is going to have to be cleaned up. 

There’s water contamination, underground contamination. 

MR. STUPAK. Sure. But not all the 4,000 acres are being used, right? 
62

MR. PAXTON. No. 

MR. STUPAK. So why would DOE not want to hand over some of 

that if you want to start development of it? 

You in your testimony here on page six said, “Pursuant to that 

decision, local governments must be allowed to participate in the 

planning and selection of a remedy. How does the community help 

determine cleanup priority?” I think you have to be at the table now as 

opposed to later -- 

MR. PAXTON. Absolutely. 

MR. STUPAK. -- to get these things cleaned up. 

MR. PAXTON. Absolutely. 

JUDGE ORAZINE. Excuse me. Go ahead. 

MR. STUPAK. Go ahead. 

JUDGE ORAZINE. To personally answer your question about being 

involved with DOE maybe more as a community, had we got involved in 

the CRO several years ago and progressed, we probably would have 

gone that way. 

MR. STUPAK. Well, when you speak of cleanup, if you don’t know 

who the tenant of the property’s going to be and what the use of that 

property’s going to be, you don’t know what degree it has to be cleaned 

up to. 

JUDGE ORAZINE. True. 

MR. STUPAK. You know, there’s Brownfield moneys out there to 

take it. If it’s going to be a school, it’s probably going to have to be 

cleaned up extremely well. But if it’s going to be a manufacturing site, 

maybe not. 

But I know you mentioned something about putting an industrial park 

in. So until you know the use or potential use of that property, how do 

you determine the degree of cleanup? And that’s where I think the local 

folks have to get involved. 

MR. PAXTON. That’s exactly right. And I’m not sure that anybody 

really knows that can articulate that to us. What is the degree that the 

cleanup is going to be? Is it going to be adequate for economic 

development, or is it not? We’re having a hard time getting the answer 

to that. 

MR. STUPAK. But under CERCLA, you should have those answers. 

MR. PAXTON. Absolutely. 

MR. STUPAK. There is a standard there, and I think it’s been set in 

other areas. And I’m sure DOE’s going to say, “Well, I want to clean it 

up to CERCLA standard, but if we did this with it, then we won’t have to 

clean up that far.” 

MR. PAXTON. Right. 
63

MR. STUPAK. What I’m saying, don’t let DOE make that decision. 

Your communities have to make that decision. 

MR. PAXTON. Absolutely. 

MR. STUPAK. And you mentioned something about hand wringing in 

your opening statement. In my short time in this community, there’s not 

been any hand wringing by any local officials or your Congressmen. 

You’ve done a great job here. This is a great booming community. 

MR. PAXTON. Thank you. 

MR. STUPAK. And you’ve got a real potential redevelopment site, 

and I just urge you to do everything you can to get that decision-making 

away from DOE and put it in the local hands. 

MR. PAXTON. I think that is why we’re so interested in the contract 

for the cleanup. We’ve had an excellent relationship with Bechtel 

Jacobs. We thought that North Wind was going to get the new contract. 

There was a challenge. And so we’re excited, and what we want is the 

new contractor to hit the ground running and start working. 

We want the contract to be long enough to where they can 

accomplish something, and let’s get this place cleaned up. We know that 

only a limited amount can be done until the plant closes. But then after 

the plant closes, they can shift into high gear, and we’ll get that cleaned 

up and we can move forward. 

MR. STUPAK. No doubt. Go ahead, Judge. 

JUDGE ORAZINE. I hate to keep interrupting. That’s one of the 

reasons why we’re so focused on the nickel assets. With the CRO 

funding now gone, they still have some moneys that they can loan out on 

spec buildings and things, but it’s going to phase out. 

But if we had the nickel assets, we wouldn’t put that in the general 

budget. Now, we would the payment in lieu of taxes, because that’s for 

county services. But the nickel assets, if we could realize some dollars 

off of that, we could use that for people like we’re talking about, 

reindustrialization. 

We’d be glad to, I mean, but we don’t have the funds of that 

magnitude to hire a staff just from the city and the county to work on 

those issues. We just don’t have it. 

MR. STUPAK. Well, you’ve got a Congressman here who does pretty 

good finding you funds, so I wouldn’t worry too much about that. 

JUDGE ORAZINE. Amen to that. 

MR. STUPAK. Mr. Hughes, I just want to say thanks. It looks like 

Bechtel has done really a pretty good job as far as to not have that in the 

contract. And a three-and-a-half-year contract, this all would have took 

-- 18 months or so of goofing around with contracts just trying to get a 

bid has probably slowed down the process. And if it’s only a 
64

three-and-a-half-year contract that the new people have, I think it’s just 

going to continue to slow us down. 

MR. HUGHES. I appreciate that. And we’re going to do everything to 

make sure that this new contractor coming in, just like we did at 

Portsmouth, fully hits the ground running and they don’t miss any beats. 

And with the Department of Energy, we’ve been, you know, working for 

them, we’ve been very proud to be part of this. 

And even during this time of uncertainty here, I think you heard the 

Undersecretary, or Assistant Secretary say and I think the rest would say 

we kept things moving at a good pace so that for the moneys that were 

put in from Congress that there were results shown back. And we’re 

pretty proud of that, actually very proud of that. We’re going to make 

sure that this new prime subcontractor is, or contractor is, successful, and 

we’ll help them get fully up to gear. 

MR. STUPAK. Nothing further, Mr. Chairman. Thank you. 

MR. WHITFIELD. Well, Congressman Stupak, I want to thank you 

once again for taking the time to be with us today. We value your input. 

And, Edith, thank you for coming. 

I want to thank all of the witnesses and for those who attended 

today’s hearing. 

Mayor, you and Judge Orazine have provided great leadership. And 

speaking on behalf of those in Washington, we may not always agree on 

all of these issues, obviously, but I do think we have a good working 

relationship, and we’ve been truthful with each other. I think if you can 

do that, you can make great progress. 

Mr. Hughes, we genuinely appreciate the great job of Bechtel Jacobs, 

and I think you all have done a fantastic job and look forward to working 

with you. 

Mr. Ervin, congratulations on being selected as the new President of 

the Local Steel Workers. I look forward to working with you. 

Richard Miller, thank you once again, and I wanted to thank you for 

mentioning Karen Long. Karen Long, although she won’t be 40 for, I 

guess, another month or two, has worked on Capitol Hill for 30 years, 

and she’s been my Chief of Staff since the day I was elected to Congress. 

She was the first person I hired. She told me once that she knew nothing 

about the Paducah Gaseous Diffusion Plant, and she knows a lot more 

now than she ever wanted to. So we’re going to miss her. 

And, Karen, thank you for everything you did. 

MS. LONG. Thank you. I appreciate it. 

MR. WHITFIELD. And we have a lot of issues affecting this 

community and this plant. We’re going to remain focused on it. We 

touched on many of them today. 

And with that, we’ll adjourn the hearing. Thank you. 
65

[Whereupon, at 12:10 p.m., the subcommittee was adjourned.] 

[Additional material submitted for the record follows:] 

RESPONSES FOR THE RECORD SUBMITTED BY ROB ERVIN, PRESIDENT, UNITED STEEL 

WORKERS LOCAL 5-550 

February 16, 2006 

Questions from the Honorable Bart Stupak. Ranking Member of the Subcommittee 

on Oversight and Investigations. 

Question 1. What is the basis for your conclusion that early lung cancer screening using a 

low dose CT scan will extend life expectancy of nuclear weapons plant 

workers? 

Answer to Congressman Stupak: 

According to medical studies, the low dose Spiral CT Scan is four times 

more likely than a chest X-ray to detect cancer at an early stage. 

Currently, the program has identified 44 cancers of which 81% were 

detected in the first stage. Results published by Cornell University 

indicate that if lung cancers are detected during Stage I, there is a 

curability rate of more than 90%. This compares to a survival rate of only 

5% - 15% for those cancers detected at Stage III. 

Question 2. How many USEC workers at the Paducah Plant have been affected by the 

lack of pension portability at the Paducah Plant? How many at the 

Portsmouth site? 

Answer to Congressman Stupak: 

There are currently 545 USEC Bargaining Unit employees at the Paducah 

Plant. Of those 545 employees, approximately 480 employees would be 

affected by the lack of pension portability if they were to transition to 

D.O.E. contractors performing Infrastructure and Remediation activities at 

Paducah. The remaining USEC employees do not qualify as 

“Grandfathered” employees and therefore are not eligible for, or affected 

by, pension portability. 

There are approximately 600 USEC Bargaining Unit employees at the 

Portsmouth site. Approximately 130 are currently affected by the lack of 

pension portability, and 460 additional employees would be affected if 

they were to transition to D.O.E. contractors performing Infrastructure and 

Remediation activities at the Portsmouth site. The remaining employees 

do not qualify as “Grandfathered” employees and therefore are not 

eligible for, or affected by, pension portability. 

Respectfully submitted, 

Rob Ervin 
66

RESPONSES FOR THE RECORD SUBMITTED BY MICHAEL C. HUGHES, PRESIDENT, BECHTEL 

JACOBS, LLC 
67
68

RESPONSES FOR THE RECORD SUBMITTED BY JAMES A. RISPOLI, ASSISTANT SECRETARY FOR 

ENVIRONMENTAL MANAGEMENT, U.S. DEPARTMENT OF ENERGY
69

QUESTION FROM CONGRESSMAN STUPAK 

Q1. A year ago, the Department of Energy (DOE) awarded a $303 million clean-up 

contract for the Paducah site to a consortium headed by North Wind, a minority-owned 

business. A losing bidder protested that contract, and DOE re-bid the work. Eleven 

months later, DOE awarded a $191 million clean-up contract for the Paducah site to 

another minority consortium led by Portage Environmental Services. Please explain the 

difference in the size of these two contracts. Was the $112 million difference between 

the two contracts because of work completed by Bechtel, the previous clean-up 

contractor, during those eleven months, was the scope of the contract reduced, or was 

there another reason? 

A1. The reason for the difference is three-fold: 1) the original contract period of 

performance was for approximately five years and the most recent contract period of 

performance is reduced to three and a half-years based on maintaining the original 

September 30, 2009, contract end date; 2) the scope or work changed based on progress 

and accomplishments on the Paducah project by Bechtel Jacobs while the competition 

was on-going; and 3) the Management of Uranium Cylinders scope was transitioned 

directly to the receiving contractor (Uranium Disposition Services). The original 

remediation contract included managing the cylinders on an interim basis. 

QUESTION FROM CONGRESSMAN STUPAK 

Q2. DOE has determined that Section 633 of the Energy Policy Act of 2005, which 

was designed to protect and maintain the full pension and medical benefits of eligible 

former USEC Inc. employees who were later employed by DOE contractors and the 

Paducah and Portsmouth sites, is a basis for denying them those benefits. What 

documents did DOE use in its attempt to ascertain Congressional intent behind Section 

633 of the 2005 Act prior to drafting its letter of January 12, 2006? 

A2. The document relied upon was the text of section 633 itself. That text clearly 

defined the transfer eligibility in question, and our analysis was governed by the statutory 

text enacted by Congress. In considering this matter, we carefully considered the 

analysis presented in the October 3, 2005, letter from Congressmen Whitfield and 

Strickland on this subject. 

QUESTION FROM CONGRESSMAN STUPAK 

Q3. DOE referenced the Bargaining Unit Transition Agreement (BUTA) in its January 

12, 2006, letter to Chairman Whitfield and Representative Strickland and stated that 

employees of contractors not parties to the BUTA could not transfer into the MultiEmployer Pension Plan (MEPP) and retain their pension credits. The terms of the BUTA, 

however, which were approved by DOE prior to its signature by Bechtel Jacobs and the 

unions, include a provision that states that such BUTA “is meant to be binding upon any 

successor contractor at this facility.” Has DOE required its successor contractors at 

Paducah and Portsmouth to honor this successorship provision? If DOE requires its 

contractors to honor this provision, how does this affect DOE’s legal analysis of which 

workers are eligible for the MEPP? 

A3. The quoted text from the Bargaining Unit Transition Agreement (BUTAs) reflects 

that a successor employer may decide to adopt its predecessor’s Collective Bargaining 

Agreement (CBA). However, the Department of Energy (DOE) has the right to approve 

CBAs as appropriate. DOE has not chosen to require the Paducah and Portsmouth 
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successor contractors to adopt their predecessors’ CBAs, which include the BUTAs. 

This circumstance does not affect the DOE’s determination of what section 633 requires. 

QUESTION FROM CONGRESSMAN STUPAK 

Q4. You testified at the hearing that workers formerly employed by USEC have the 

right to transfer into the MEPP if Swift and Staley at Paducah subsequently employ them, 

as Swift and Staley was an eligible subcontractor on April 1, 2005. Your statement was 

similar to that in a January 12, 2006, letter to Chairman Whitfield and Representative 

Strickland from Eric Fygi, DOE’s deputy counsel. However, according to the written 

testimony of Rob Ervin, President of the United Steelworkers Local 5-550, DOE has not 

advised Swift and Staley in writing of this decision so that the costs of the MEPP for 

those employees are deemed allowable costs. 

 Do you agree that former USEC employees who are hired by Swift and Staley are 

eligible to transfer into the MEPP if they meet all other eligibility requirements? Has 

DOE communicated this position to Swift and Staley so that pension costs for these 

employees are deemed allowable costs? Is so, please provide a copy of that 

communications. If not, please explain why this position has not been communicated 

A4. The Department of Energy (DOE) agrees that United States Enrichment 

Corporation (USEC) workers who are members of the United Steelworkers of America 

and who are hired by Swift and Staley Mechanical Contractors, Inc., (S&S) will be 

eligible to transfer into the Multiple Employer Pension Plan (MEPP) if they meet all 

other Plan eligibility requirements. This is because S&S had been a subcontractor to the 

Bechtel Jacobs Company (BJC) prior to being awarded the contract to provide 

infrastructure services at Paducah and was a signatory to a Collective Bargaining 

Agreement (CBA) that allowed USEC employees who were hired by BJC or a first- or 

second-tier subcontractor to transfer into the MEPP. S&S and USW have signed a oneyear extension to the CBA, although the CBA as extended no longer gives USEC 

employees the right to bump S&S employees and be hired by S&S. While the DOE has 

not provided written direction to S&S on this issue, S&S has confirmed to the 

Portsmouth Paducah Project Office that it understands that if S&S hires USEC employees 

who are covered by the CBA and otherwise meet MEPP eligibility requirements, the 

related costs would be allowable if consistent with the Federal acquisition regulations 

governing the allowability of costs. 

QUESTION FROM CONGRESSMAN STUPAK 

Q5. How many former USEC workers at the Portsmouth, Ohio, site are affected by 

DOE’s decision to refuse to allow those workers to transfer to Theta Pro2 Serve 

Management Company (TPMC) and Los Alamos Technical Associates (LATA) (the 

infrastructure and remediation contractors) with their past pension service and medical 

benefits plan intact? What written guidance has DOE provided to those contractors about 

the right of former USEC to transfer their benefits? Please provide copies of all such 

communications and/or guidance documents. 

A5. There is a total of 104 individuals who presently remain employed by the United 

States Enrichment Corporation (USEC), but who are currently made available to Theta 

Pro2Serve Management Company (TPMC) and LATA/Parallax Portsmouth, LLC (LPP): 

TPMC arrangements cover 41 USEC United Steelworkers (USW) employees and LPP 

covers 63 USEC USW employees. DOE has provided no written guidance about whether 

former USEC employees may transfer their USEC-accrued benefits to either TPMC or 

LPP. As was explained in the Department of Energy’s (DOE) letter dated January 12, 
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2006, to Congressmen Whitfield and Strickland, section 633 of the Energy Policy Act of 

2005 does not make any and all USEC workers eligible to participate in the Bechtel 

Jacobs Company Multiple Employer Pension Plan; instead section 633 specifies that 

those USEC employees who were not otherwise eligible to participate in that plan prior to 

April 1, 2005, are not accorded the unfunded transfer rights afforded by section 633. 

USEC employees who are hired by LPP and TPMC are eligible to participate in pension 

plans offered by LPP and TPMC and will receive credit for their current service with 

these employees. Those hired USEC employees remain participants in USEC’s defined 

benefit pension plan and USEC remains obligated to pay any vested pension and medical 

benefits that those employees earned while at USEC. 
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QUESTION FROM CONGRESSMAN STUPAK 

Q6. DOE’s contracts with TPMC and LATA at the Portsmouth site call for hiring the 

incumbent workforce. However, DOE has authorized LATA and TPMC to violate their 

contract and lease such workers from USEC. Why is DOE directing its contractors to 

lease workers from USEC instead of hiring them? 

A6. The new small business contractors, LATA/Parallax Portsmouth, LLC (LPP) and 

Theta Pro2Serve Management Company, LLC (TPMC), have not violated their contracts 

by leasing United States Enrichment Corporation (USEC) employees. Leasing USEC 

employees had been a long-standing practice at the Portsmouth site by the prior 

contractor at the site, Bechtel Jacobs Company. 

QUESTION FROM CONGRESSMAN STUPAK 

Q7. There was a substantial amount of Freon left at the Portsmouth site that has a 

value in the millions of dollars. What is the position of DOE on the ownership of this 

Freon? Has DOE transferred to USEC the Freon that is being removed from equipment 
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at Portsmouth? Are there discussions underway about such a transfer? Is there an 

existing memorandum of understanding concerning the ownership of and payment for the 

Freon? Is so, please provide it for the record. 

A7. The Department of Energy (DOE) believes it is clear that the Freon at Portsmouth 

is owned by the Federal government, and, so far as we are aware, the United States 

Enrichment Corporation (USEC) has not seriously contended otherwise. The principal 

issue of disagreement between DOE and USEC has been whether the Freon at 

Portsmouth was or was not already under lease to USEC under the Gaseous Diffusion 

Plant (GDP) lease. On the one hand, there is no express provision in the lease (or its 

Exhibits setting forth the leased property) that specifically sets out Freon as leased 

personal property; however, the lease exhibits do identify as leased property certain 

Portsmouth GDP process facilities which contain Freon. These facilities have not been 

used by USEC to enrich uranium since that plant was shut down by USEC several years 

ago. That said, the GDP lease, which was required to be transferred to USEC when it 

privatized by the USEC Privatization Act, does contain a provision allowing for the lease 

of additional personal property at USEC’s request upon DOE’s consent which “shall not 

be unreasonably withheld.” 

 In the past year, the DOE has deferred several USEC requests to move Freon from 

Portsmouth to replenish the inventory at the Paducah GDP until the parties’ respective 

rights and future obligations were discussed and resolved to DOE’s satisfaction. At this 

point, none of the excess Freon currently at Portsmouth has been transferred to USEC for 

its operations at the Paducah GDP. A December 16, 2005, letter from David Garman, 

Under Secretary for Energy, Science and Environment to USEC, proposed terms of an 

arrangement with USEC that would address the immediate operational concerns while 

the unresolved issues are addressed. 

QUESTION FROM CONGRESSMAN STUPAK 

Q8. How many pounds of smelted nickel ingot are stored at the Paducah Plant? What 

are the contaminants that were identified in the environmental assessment performed for 

the DOE in evaluating the sale of this nickel to Spain several years ago? Has anything 

changed in the nickel’s content since that assessment was made? 

A8. Approximately 9,700 tons (19.4 million pounds) of nickel ingots are stored at the 

Paducah site. In October 1995, the Department of Energy’s (DOE) Oak Ridge 

Operations Office performed an “Environmental Assessment of the Proposed Sale of 

Radioactively Contaminated Nickel Ingots Located at the Paducah Gaseous Diffusion 

Plant” (EA). Radioactive contaminants identified in the nickel by the EA are technetium, 

uranium, neptunium, and plutonium. Technetium is the primary contaminant. There has 

been no change in the content of the nickel since the 1995 EA. 

QUESTION FROM CONGRESSMAN STUPAK 

Q9. The DOE contract with Portage requires Portage to “develop and evaluate 

alternate uses of the nickel ingots and acquire competitive bids for its reuse” within six 

months of signing the contract. But DOE has a moratorium on selling radioactively 

contaminated metals, and there is no national or international standard for the release of 

radioactively contaminated nickel. It may be difficult for Portage to obtain bids with this 

moratorium in place. Does DOE intend to lift the moratorium prior to the bidding 

process? 

 
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A9. This response assumes that the question’s references to a Department of Energy 

(DOE) contract with Portage are references to the DOE Paducah remediation contract 

with Paducah Remediation Services, LLC, which has Portage as one of its parent 

companies. On January 12, 2000, former Secretary of Energy Richardson imposed a 

moratorium on the unrestricted release of volumetrically contaminated metal, including 

nickel, into commerce. DOE will fully review the contractor’s proposed alternatives for 

use of the nickel before deciding on what, if any, action it will take. 

QUESTION FROM CONGRESSMAN STUPAK 

Q10. Has DOE consulted with the steel or other metal industry groups about its 

requirement that Portage develop a plan to sell the Paducah nickel? With whom has 

DOE consulted and on what dates? 

 

A10. This response assumes that the question’s references to a Department of Energy 

(DOE) contract with Portage are references to the DOE Paducah remediation contract 

with Paducah Remediation Services, LLC, which has Portage as one of its parent 

companies. While several companies have advised the DOE of their interest in the 

nickel, DOE has not formally consulted the metal industry during or since issuance of the 

contract. 

QUESTION FROM CONGRESSMAN STUPAK 

Q11. Has DOE completed its preliminary environmental impact statement (PEIS) on 

radioactively contaminated metals reuse? Please provide a status report and projected 

completion date on this PEIS. 

 

A11. A Programmatic Environmental Impact Statement for the Disposition of Scrap 

Metal (SM PEIS) was proposed to evaluate policy alternatives for the disposition of 

Department of Energy (DOE) scrap metal potentially having residual radioactivity. The 

SM PEIS activity was put on hold pending a decision from the U.S. Nuclear Regulatory 

Commission (NRC) regarding its rulemaking on controlling the disposition of solid 

materials from NRC-licensed facilities. On June 1, 2005, the NRC decided to defer its 

rulemaking. The DOE is currently re-evaluating the path forward for the SM PEIS in 

light of the NRC’s decision to defer the rulemaking. 

QUESTION FROM CONGRESSMAN STUPAK 

Q12. What is the current market price of clean nickel? What is the market price of 

contaminated nickel for “restricted” end use (as opposed to free release)? 

 

A12. In January and February 2006, the market price of publicly traded nickel varied 

from $6.50 to $7 per pound. The commodities market for publicly traded nickel does not 

reflect a market price for "contaminated" nickel. 

QUESTION FROM CONGRESSMAN STUPAK 

Q13. As you know, officials from McCracken County and the City of Paducah are 

supporting the sale of this nickel and asking for some of the proceeds. However, the 

nickel is Federal property, and the contract with Portage states that all revenue in excess 

of costs would go to the Federal Government. What proposal has DOE made to share 

these proceeds with the local communities? How would that be accomplished? 
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A13. This response assumes that the question’s references to a Department of Energy 

(DOE) contract with Portage are references to the DOE Paducah remediation contract 

with Paducah Remediation Services, LLC, which has Portage as one of its parent 

companies. It is premature to estimate the amount of revenue that may be generated 

from the potential sale and re-use of the nickel. Any proceeds from these efforts will be 

managed pursuant to applicable laws. 

QUESTION FROM CONGRESSMAN STUPAK 

Q14. We have been told that the privatization agreement between DOE and USEC 

requires USEC to make payment in lieu of taxes for the USEC facility in Paducah, which 

USEC leases from DOE. But it appears that USEC has never made those payments. Has 

DOE taken any steps to enforce that provision? Why or why not? 

A14. Nothing in the privatization agreement between the Department of Energy 

(DOE) and the United States Enrichment Corporation (USEC) addresses payment-in-lieu 

of taxes (PILT). A statutory provision had been enacted in the Energy Policy Act of 

1992 that would have required USEC to make payments-in-lieu of taxes upon 

privatization 

 (July 28, 1998); however, that statutory provision was repealed (April 26, 1996) prior 

to privatization. DOE was never responsible either under the privatization agreement or 

by statute to enforce such payments. 

QUESTION FROM CONGRESSMAN STUPAK 

Q15. Is there some reason why Paducah and McCracken County have not received 

payments in lieu of taxes for these Federal facilities? 

A15. McCracken County has requested, and the Department of Energy (DOE) has 

made payments to the county in lieu of taxes over several years. The requests and DOE 

payments were made through the McCracken County School Board. From 1973 through 

tax year 1993 (paid in 1994), DOE paid more than $230,000. The requests for paymentsin-lieu of taxes (PILT) are required to be made by the taxing entity on an annual basis. 

The most recent request and payment found in DOE’s records appears to have been made 

in 1995 for $18,348. 

 The United States Enrichment Corporation (USEC) is not subject to PILT. A 

statutory provision had been enacted in the Energy Policy Act of 1992 that would have 

required USEC to make PILT upon privatization (July 28, 1998); however, that statutory 

provision was repealed (April 26, 1996) prior to privatization. This statutory requirement 

was limited to real and personal property owned by USEC. 

 

QUESTION FROM CONGRESSMAN STUPAK 

Q16. DOE has issued several very large contracts to Native American-owned 

corporations that partner with large traditional clean-up corporations for contracts that are 

many times larger than their normal contracts. But there are no such contracts with 

African American firms. Please describe why this is and what your outreach has been to 

African American firms for these large clean-up contracts. 

A16. Since November 2003, the Department of Energy (DOE) has set aside 11 

significant environmental cleanup competitive procurements for award to small business 

firms. All of these contracts were awarded competitively in accordance with relevant 

provisions of the Federal Acquisition Regulation and applicable regulations of the U.S. 
77

Small Business Administration. In each case, award was made consistent with the 

evaluation criteria of the respective Request for Proposals to the small business whose 

proposal represented the best value to the Federal government. The ethnicity of a 

particular small business or joint venture member played no part in the evaluation and 

award. 

 The DOE has an extensive program of outreach to all small and small disadvantaged 

business firms, including: DOE’s annual Small Business Conference, featuring 

matchmaking sessions for subcontracting opportunities with DOE’s large facility 

management contractors; one-on-one consultations between small and small 

disadvantaged firms and DOE technical experts, Federal and contractor small business 

program advocates and small business program officials; publication of a forecast of 

contracting and subcontracting opportunities; DOE’s Mentor-Protégé program providing 

opportunities for small companies to be mentored by a large firm doing business with 

DOE; DOE site-sponsored local small business meetings; and pre-solicitation and preproposal conferences in which all firms interested in competing for the specific scope of 

work are invited to participate. 
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LETTER FOR THE RECORD SUBMITTED BY JAMES A. RISPOLI, ASSISTANT SECRETARY FOR 

ENVIRONMENTAL MANAGEMENT, U.S. DEPARTMENT OF ENERGY
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RESPONSE FOR THE RECORD SUBMITTED ON BEHALF OF JAMES A. RISPOLI, ASSISTANT 

SECRETARY FOR ENVIRONMENTAL MANAGEMENT, U.S. DEPARTMENT OF ENERGY
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