Duke Power on Friday lost a key partner in a plan to burn surplus bomb material in nuclear power plants, but said it remains committed to the program.

Virginia Power dropped out of a consortium under which it would burn fuel containing government plutonium at its North Anna plant northwest of Richmond. Duke Power plans to use the mixed-oxide, or MOX, fuel at the McGuire nuclear plant on Lake Norman and Catawba plant on Lake Wylie.

Deregulation of the electric industry and a January merger changed Virginia Power's priorities, said spokesman Jim Norvelle.

"This project just no longer fits into our business mix," Norvelle said. "It's just a pure business decision."

Duke said it will stay in the program, which involves the first use of U.S. defense fuel in civilian reactors.

"This doesn't change our agreement or our commitment," said Duke's Guynn Savage. "We've made a commitment to what we believe is a very safe and important project, and we're going to stick to it."

The utilities were among a group of companies that formed in 1998 to dispose of bomb material left over at the end of the Cold War. Duke Engineering & Services, part of Duke Energy, leads the consortium that includes plutonium processor Stone & Webster and COGEMA, which makes MOX fuel in Europe.

The project depends on a U.S.-Russia agreement, expected by June, to dispose of their surplus plutonium. Each country would burn 33 metric tons in nuclear power plants. The United States would immobilize an additional 17 tons in a glasslike form.

The consortium signed a $130 million contract with the Energy Department in March 1999 to design a MOX-production plant at the Savannah River Site near Aiken, S.C. The facility is scheduled to be finished in 2006, with the new fuel to be burned in reactors beginning in 2007.

A critic of the mixed-oxide program predicted Virginia Power's withdrawal will increase pressure and scrutiny on Duke Power.

Unknown costs of building the MOX-production facility, and the amount absorbed by utilities, will make it hard for the consortium to recruit another utility, said Tom Clements of the Nuclear Control Institute, a nonproliferation group in Washington.

"I think people are going to be gun-shy of this program," Clements said.

A shareholder vote on Duke's use of the new fuel will be tallied at a Duke Energy annual meeting April 20. About 7 percent of shareholders opposed the plan last year.

Energy officials said Virginia Power's departure won't kill the program.

"Our initial assessment is that Duke Power believes it can use the amount of fuel that Virginia Power was going to handle, or (the consortium) may look at other partners," said Ken Sprankle of the Office of Fissile Materials Disposition.

Duke won't be obligated to use more of the MOX fuel than it originally agreed to, another Energy official said.

Duke said the agreement does not include using the new fuel at its Oconee nuclear plant in northwestern South Carolina. Oconee has a different design from McGuire and Catawba and is in the midst of renewing its operating license.

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