MOX sales could require subsidy

WASHINGTON – If the United States decides to finish building the South Carolina plant converting weapons-grade plutonium into fuel for nuclear reactors, the federal government will subsidize the sale of the fuel to American utility companies, a top Energy Department official said.

Anne Harrington, the Energy Department’s deputy administrator for defense nuclear nonproliferation, told Congress that while there currently is no domestic market for the fuel, she believes there would be buyers if the mixed oxide facility is completed.

“So once a commitment is made, once there is material available, I believe that, yes, there would be a market,” Harrington said Thursday. “Would we have to subsidize some of that? Our assessment is that we would, at least to something less than the current price of uranium.”

Harrington was one of several Energy Department officials on Capitol Hill this week responding to concerns about the MOX facility, which is costing more money and taking longer to finish than planned. The Obama administration has proposed putting the 60 percent-complete MOX facility at the Savannah River Site on cold standby, or halting construction while cheaper alternatives for disposing of the material are explored.

Congress is starting work on the spending bills to finance government operations in the 2015 fiscal year that begins in October, and the proposal to suspend work on the MOX plant has enraged lawmakers from South Carolina who say it breaks a commitment to the state and endangers an agreement with Russia.

Energy Secretary Ernest Moniz told Congress that completing the MOX plant is still an option, but that other ideas are also being considered.

The agency estimates the total cost of the MOX plant over several years to convert 34 metric tons of weapons-grade plutonium is now about $30 billion.

The construction costs alone have climbed to $7.7 billion, said Bruce Held, acting administrator of the National Nuclear Security Administration. But a cost review is expected to revise the price tag to $10 billion, he said.

Critics of the project have long questioned whether anyone would purchase the fuel the facility created. Harrington said she expected the Tennessee Valley Authority — a government-owned utility with six nuclear power reactors at three sites in Alabama and Tennessee — would agree to purchase some of the fuel.

She didn’t detail the size of the subsidy that would be necessary to sell the fuel, but Tom Clements of Savannah River Site Watch said it would be sizable.

“To sell the MOX fuel to utilities at the cost of uranium fuel is totally crazy because MOX will cost many times more to fabricate,” Clements said. “They would be basically giving it away.”

Moniz said Wednesday there are four alternatives under consideration for replacing MOX, but two of them wouldn’t be cheaper, and some of them would require a renegotiation of the disposition agreement with Russia.

Sen. Lindsey Graham, R-SC, one of the biggest advocates for completing the MOX plant, said Tuesday that none of the possible alternatives would meet the deadlines of the agreement.

“There is no viable option to MOX that would be cheaper and meet the target dates of disposition. That’s just a complete, absolute absurd concept. And I know that to be the fact,” Graham said.

Energy officials estimate MOX would need $1 billion a year to operate.

“The question is, is the country prepared to spend a better part of a billion dollars a year for decades?” Moniz said.

The Energy Department has asked for $221 million in 2015 to put the MOX facility into cold standby, but Congress will have the final say on the agency’s budget in legislation later this year.

Contact Mary Orndorff Troyan at mtroyan@usatoday.com