Enron, USEC strike nuclear fuel for power deal

Now, Enron Corp. is willing to pick up the cost of US utilities' uranium fuel bills in return for electricity.

While Enron is no stranger to commodity swaps like natural gas for electricity, nuclear fuel for electricity is a new twist on the concept for the big Houston-based energy concern.

Enron signed a marketing deal with uranium fuel supplier USEC Inc., Bethesda, Md., enabling USEC customers to pay for their fuel with electricity instead of cash. Under the agreement, Enron will pay USEC the contracted price for the enriched uranium and, in turn, take title to and market a certain amount of electricity generated by that customer.

�USEC utility customers across the US can use Enron�s extensive trading network to link the cost of their nuclear fuel products to their market revenues for power,� William H. Timbers, USEC president and CEO, said in a statement.

Enron would not elaborate on the marketing agreement because no deals have been made yet.

But Mark Palmer, Enron spokesman, calls it a �fantastic idea� that Enron will take to the marketplace to see if anybody is interested.

The novel marketing arrangement was a way for USEC to offer its existing fuel for electricity swap program to all of its customers, says Ron Seeholzer, USEC spokesman. The company already allows some nuclear utilities to supply USEC�s enrichment manufacturing facility in Kentucky with electricity in return for fuel.

�This way we can offer the swap option to all of our customers no matter where they are located,� says Seeholzer.

The arrangement will be marketed first to USEC customers in the US. Plans call for extending the availability of such a contract to international markets. The annual market for uranium enrichment is estimated to be $1 billion in the US and about $3 billion worldwide.