The US Department of Energy has rejected an Energy Solutions and USEC
proposal for a $9.5 billion sole-source contract to decontaminate and
decommission DOE's Portsmouth, Ohio, and Paducah, Kentucky, uranium enrichment
plants, two lawmakers said Tuesday.

The proposal also called for Energy Solutions to acquire USEC and invest
in a $2 billion uranium enrichment plant at the Paducah site.

"I commend the DOE general counsel and his legal staff for scrubbing and
ultimately rejecting a proposal which is so plainly at odds with the public
interest," House Energy and Commerce Committee Chairman John Dingell said in a
statement with Representative Bart Stupak, chairman of the Oversight and
Investigations Subcommittee.

Earlier this year, Dingell and Stupak -- both Michigan
Democrats -- challenged the proposal, saying DOE should obtain the D&D work
through an open solicitation for contract proposals. Dingell and Stupak also
questioned whether the arrangement would constitute an indirect subsidy
to Energy Solutions to finance its acquisition of USEC's stock.

Energy Solutions is a Salt Lake City-based nuclear services company,
while USEC, a uranium services company, is based in Bethesda, Maryland.

"After 10 months of review, DOE agreed with our concerns that this
sole-source contracting proposal was not in the taxpayer's best interest,"
Stupak said.

"However, it is imperative, as a next step, that [Energy] Secretary
[Samuel] Bodman protect taxpayer interests by soliciting bids from a wide
array of qualified firms using full and open competition while ensuring that
qualified workers at these sites are provided a seamless transition to
decommissioning work."

--Bill Loveless, bill_loveless@platts.com

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