<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:26814.wais]
S.Hrg. 109-60
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
______________
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COMMITTEE ON ENERGY AND COMMERCE
JOE BARTON, Texas, Chairman
RALPH M. HALL, Texas JOHN D. DINGELL, Michigan
MICHAEL BILIRAKIS, Florida Ranking Member
Vice Chairman HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RICK BOUCHER, Virginia
PAUL E. GILLMOR, Ohio EDOLPHUS TOWNS, New York
NATHAN DEAL, Georgia FRANK PALLONE, JR., New Jersey
ED WHITFIELD, Kentucky SHERROD BROWN, Ohio
CHARLIE NORWOOD, Georgia BART GORDON, Tennessee
BARBARA CUBIN, Wyoming BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois ANNA G. ESHOO, California
HEATHER WILSON, New Mexico BART STUPAK, Michigan
JOHN B. SHADEGG, Arizona ELIOT L. ENGEL, New York
CHARLES W. "CHIP" PICKERING, Mississippi ALBERT R. WYNN, Maryland
Vice Chairman GENE GREEN, Texas
VITO FOSSELLA, New York TED STRICKLAND, Ohio
STEVE BUYER, Indiana DIANA DEGETTE, Colorado
GEORGE RADANOVICH, California LOIS CAPPS, California
CHARLES F. BASS, New Hampshire MIKE DOYLE, Pennsylvania
JOSEPH R. PITTS, Pennsylvania TOM ALLEN, Maine
MARY BONO, California JIM DAVIS, Florida
GREG WALDEN, Oregon JAN SCHAKOWSKY, Illinois
LEE TERRY, Nebraska HILDA L. SOLIS, California
MIKE FERGUSON, New Jersey CHARLES A. GONZALEZ, Texas
MIKE ROGERS, Michigan JAY INSLEE, Washington
C.L. "BUTCH" OTTER, Idaho TAMMY BALDWIN, Wisconsin
SUE MYRICK, North Carolina MIKE ROSS, Arkansas
JOHN SULLIVAN, Oklahoma
TIM MURPHY, Pennsylvania
MICHAEL C. BURGESS, Texas
MARSHA BLACKBURN, Tennessee
GRESHAM BARRETT, South Carolina 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 BART STUPAK, Michigan
CHARLES W. "CHIP" PICKERING, Mississippi Ranking Member
CHARLES F. BASS, New Hampshire DIANA DEGETTE, Colorado
GREG WALDEN, Oregon JAN SCHAKOWSKY, Illinois
MIKE FERGUSON, New Jersey JAY INSLEE, Washington
MICHAEL C. BURGESS, Texas TAMMY BALDWIN, Wisconsin
MARSHA BLACKBURN, Tennessee HENRY A. WAXMAN, California
JOE BARTON, Texas JOHN D. DINGELL, Michigan
(EX OFFICIO) (EX OFFICIO)
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
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 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 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 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
benefits, and collective bargaining rights during the transition from
USEC the quasi-governmental 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 state-of-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.
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.
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.
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 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 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, 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.
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:
<BULLET> 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-American-owned
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.
<BULLET> 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.
<BULLET> 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.
<BULLET> 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:
<BULLET> 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.
<BULLET> 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.
<BULLET> In FY 2005, we were able to accelerate several Paducah
cleanup activities:
<BULLET> Completed demolition of the C-603 Nitrogen Facility,
5 years ahead of schedule
<BULLET> Disposed of 3 million pounds of uranium
tetrafluoride (UF4), 2 years ahead of schedule
<BULLET> Removed the C-410 Hydrogen Holder Tank, 8 years
ahead of schedule
<BULLET> Accelerated by about three years disposal of
nearly 700 cubic meters of legacy waste stored
outdoors
<BULLET> 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:
<BULLET> 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.
<BULLET> Signed the C-400 Groundwater Record of Decision
<BULLET> Completed Southwest Plume field work and issued the Draft Site
Investigation Report to the regulators
<BULLET> Issued the Remedial Action Completion Report for the North-South
Diversion Ditch
<BULLET> Completed the C-746-S&T Landfill investigation and submitted
final report to regulators
<BULLET> Disposed of 60,563 cubic feet of legacy waste in FY 2005
<BULLET> 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 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.
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.
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.
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
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
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 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
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 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 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.
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
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 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.
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.
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.
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 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.
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.
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.
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
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.
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.
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; re-industrialization 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
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 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.
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.
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.
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 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,
* 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
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.
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
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:]
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 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."
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
subcontractors), or of the Corporation\\3\\, 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 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 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 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 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 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.
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, 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.
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 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.
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
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?
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.
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 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.
[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
RESPONSES FOR THE RECORD SUBMITTED BY MICHAEL C. HUGHES, PRESIDENT, BECHTEL
JACOBS, LLC
[[Graphics not available in Tiff format]
RESPONSES FOR THE RECORD SUBMITTED BY JAMES A. RISPOLI, ASSISTANT
SECRETARY FOR ENVIRONMENTAL MANAGEMENT, U.S. DEPARTMENT OF ENERGY
[[Graphics not available in Tiff format]
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 Multi- Employer 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 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
one-year 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, 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 a
nd 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 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?
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?
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 payments- in-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.
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 pre-proposal conferences
in which all firms interested in competing for the specific scope of
work are invited to participate.
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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INSERT FOR THE RECORD
The conference report passage dealing with contractor
employee benefits contained only the text of section
633 itself. To the extent section 633 imposed any
legal obligations on a new Department of Energy (DOE)
contractor, those obligations would have been recognized
through the customary "laws, regulations and DOE directives"
clause that requires the contractor to comply with all
applicable law. To the extent section 633 imposed legal
obligations on the Secretary, that subject would not
have been appropriate for inclusion in the contract.
INSERT FOR THE RECORD
The Department did at that time take all necessary actions
to address the safety of current workers from the possible
presence of phosgene in the cylinders received from the
Chemical Warfare Service (CWS)
The Independent Investigate of the East Tennessee Park,
Volume 1, Past Environment, Safety, and Health Practices
report noted workers from 1945 to 1947 were exposed to
phosgene through a project to inspect CWS cylinders
previously containing phosgene. The report also notes
traces of welding-generated phosgene have occassionally
been detected, a situation unrelated to the concern
addressed by the Management Alert. Since the cylinder
phosgene issue mentioned in the report described past
situations no longer in effect, no specific corrective
actions were developed for this issue. A review of
cylinder handling procedures in effect during the period
of concern verified the requirement for modification and
testing of CWS cylinders prior to their placed in uranium
hexaflouride service, a process that would preclude the
presence of residual phosgene. This practive was confirmed
through interviews with past operations staff. On this
basis, the potential for phosgene in cylinders was not
deemed a credible hazard necessitating specific phosgene
characterization.
\\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)
\\3\\ The term "or of the Corporation" specifically refers to USEC (post
privatization) in the USEC Privatization Act of 1996.