Friday April 7 2000 6:34 PM ET

Power Co. Pulls Out of Fuel Program

By H. JOSEF HEBERT, Associated Press Writer

WASHINGTON (AP) - The Virginia Power Co. has decided to pull out of a government program to burn plutonium-derived fuel in two of its nuclear power reactors, the utility said Friday.

The decision raises questions about whether the government will be able to dispose of as much as two tons of plutonium a year by burning it as a mixed oxide fuel in civilian power reactors as planned.

``We regret the decision by Virginia power to leave the consortium,'' the Energy Department said in a statement. But the department said another utility, Duke Power, ``remains committed to this important nonproliferation initiative.''

A department source, who declined to be named, said there are various options available including finding a new utility to replace Virginia Power or increasing the number of Duke Power reactors in the program.

``The department continues to rely on the irradiation of MOX fuel to eliminate surplus U.S. weapons plutonium,'' said the DOE statement. The plan calls for disposing of 33 metric tons of plutonium as MOX fuel by 2020.

The government a year ago awarded a $130 million contract to a consortium comprised of the French nuclear fuel manufacturer, Cogema, Virginia Power and Duke Power, for the burning of the MOX fuel in the six reactors, beginning in 2007.

Duke Power will use two reactors at its McGuire plant south of Charlotte, N.C., and two reactors at its Catawba plant near Rock Hill, S.C. Virginia Power had planned to use its two North Anna reactors near Mineral Va.

Jim Novelle, a spokesman for the utility, said the decision to no longer participate in the government program was made as ``purely a business decision'' in light of the corporations recent restructuring.

In January, Virginia Power's parent company, Dominion Resources, merged with Consolidated Natural Gas of Pittsburgh. ``Our strategic focus as a company was to grow our generation assets in the Midwest and Northeast sections of the United States. And this (MOX) project does not fit into our business plan,'' said Novelle.

Nuclear nonproliferation watchdog groups, that oppose the burning of plutonium-based fuel in civilian reactors, said Virginia Power's decision may jeopardize the Energy Department's plans to dispose of all the plutonium it plans. That, in turn, could cause problems with an agreement with Russia on plutonium disposal, they said.

``I would think this would make it difficult to safely implement the plan,'' said Tom Clements of the Nuclear Control Institute, a nonproliferation advocacy group that had criticized the use of plutonium-based fuel in civilian reactors.

A $1.3 billion processing plant and other facilities, to be run by Cogema, for converting plutonium to MOX fuel has yet to be built, but is planned for the Savannah River weapons complex in South Carolina.

The plutonium to be converted to MOX is among the plutonium left over from the weapons program. About nine tons of less pure plutonium, not suitable for conversion, is to be encased in glass logs and buried.

The Nuclear Control Institute has maintained the use of MOX fuel in civilian reactors increases the safety risk and improperly links the military and civilian nuclear programs.