Summary: In response to a congressional request, GAO answered specific questions concerning the Department of Energy's (DOE) plans for providing uranium enrichment services and their potential effect on the Tennessee Valley Authority and its customers.
GAO found that, for fiscal years 1970 through 1984, DOE anticipates that it will spend about $1.6 billion on uranium enrichment research and development and pilot operations for its existing and advanced enrichment technologies. For the same period, DOE also anticipates that it will spend about $2.4 and $2.0 billion, respectively, to construct the gas centrifuge facility and make improvements to the gaseous diffusion enrichment facilities. In addition, the depreciation component of the enrichment services price is expected to increase from $3.65 to $8.05 per separative work unit (SWU) while, due to a large increase in the overall price for enrichment services, depreciation as a percentage of the SWU price will decrease from 14.0 percent to 5.8 percent. DOE presently expects that the primary capital investments to be recovered will consist of those expenditures made to construct the gas centrifuge enrichment facility and to improve and maintain the gaseous diffusion enrichment facilities. However, the amount of capital investment to be recovered could change if the advanced isotope separation technology, now under development, proves to be successful and is substituted, or combined with, the gas centrifuge facility. DOE recovers its capital investments by depreciating its capital items and factoring these costs into the price the customer is charged for enrichment services. DOE plans to depreciate each year through 2003 from $109 million to $429 million.
