Today, stock of USEC, Inc., plunged 15.8% to an all-time low of $2.93 per share, down from a high of $25 in May, 2007. Apparently headed toward junk status, the plunge is a reaction to the outcome of the leadership battle between John Dingell and Henry Waxman, resolved late yesterday in Waxman's favor.
USEC is awaiting an Administration decision on a pending application for federal loan guarantees worth up to two billion dollars. It also awaits a ruling from the Supreme Court on USEC's appeal of a decision that would invalidate anti-dumping tariffs imposed by the Commerce Department that protect USEC's market against foreign enriched uranium.
An adverse decision for USEC on either, including a new ruling by an Obama Commerce Department, could effectively doom the company. Apparently, Dingell's departure from the chairmanship of Energy and Commerce spells that doom, in the eyes of investors.
More below the fold.
USEC is the formerly national company, privatized in 1998, that runs the country's sole operating uranium enrichment plant in Paducah, Kentucky. That plant sucks up an astounding 2,000 megawatts of power "24/7," most of it generated by TVA coal -- old dirty coal. USEC survives only because of protective tariffs that keep out foreign uranium -- tariffs put in place by USEC's chief shill, former Congressman and US Trade Representative Rob Portman, who now plans on running for Ohio governor in 2010.
USEC is a dying dinosaur. Coddled by Portman's protective tariffs, the company failed to commercialize a modern enrichment technology, depending instead on a series of federal bailouts, provided at the behest of both Democrats and Republicans from Ohio and Kentucky. USEC also "operates" the shut-down enrichment site at Piketon, Ohio, in a congressional district that shuttled between Ted Strickland and Rob Portman -- the two likely contenders for the governorship two years from now.
John Dingell, as Energy and Commerce chairman, is one of the Democrats who allowed the USEC farce to continue. Since May of 2001, USEC has collected exhorbitant federal fees for "operating" the plant at Piketon while it is shut down. A job one worker described as "watching waste."
USEC has also been given exclusive leasing rights over the gargantuan electrical swictchyard at Piketon, which it subleases to American Electric Power, making huge profits. In 2005, the DOE Inspector General caught DOE paying up to a quarter of a billion dollars for USEC private expenses. Yet throughout all this, and more, Dingell's committee held no hearings on USEC, and made no move to end the kleptomania.
Why? Because Piketon's in southern Ohio, on the turf that was expected to play the key role in the 2008 election. Neither the Dingell-Strickland wing of the Democratic Party, nor any wing of the Republican Party, wanted to create a fuss at the center of Appalachian Ohio, just before a key presidential election.
So everyone in office let USEC run off with the loot. And when John McCain realized that he was about to lose, he even wrote a letter to George Voinovich, dated October 21, calling on the BUSH Administration to award the USEC loan guarantees. That's right, two weeks BEFORE the election, McCain and Voinovich were conspiring to see how they could empty the federal till, before the Obama Administration could assume office.
Strickland and Dingell did not say a word. Nor have they piped up about USEC loan guarantees, which the company says it would use to build a new uranium enrichment plant, based on a technology it has not commercially demonstrated, and which is priced far out of world market range.
So what about Waxman? Waxman has no ox on USEC territory to be gored. When Henry Waxman finds out, if he hasn't already, how much government dough has been stuffed into USEC pockets, he's going to have a real caniption. And no, that's not a word they understand in Ohio or Kentucky.
USEC Hearings here we come! It's gonna be one helluva show.
P.S. Before anyone chimes in about the benefits or demerits of nuclear power, this is not either a pro-nuke or anti-nuke issue. The plant USEC claims to be building will never go into commercial production; it's way too expensive and may not even work. Three other enrichment plants are going forward in the U.S., at sites in New Mexico, Idaho, and North Carolina. And U.S. nuclear utilities have joined in the case to remove the uranium import tariffs, because it would lower the cost of nuclear power to pay a market price.
The issue is about graft, plain and simple, not nuclear power.