Nuke Trader’s Bankruptcy May Cost Bpa But Ratepayers Would Absorb $12 Million In Dubious Deal

An international uranium trader’s bankruptcy case could leave Northwest ratepayers on the hook for nearly $12 million, Washington Public Power Supply System officials say.

Oren L. Benton, owner of Nuexco Trading Corp., bought 440 tons of uranium hexafluoride from the supply system on Aug. 1, 1994, promising to pay $11.7 million on Oct. 10.

Instead, Benton, once the world’s largest uranium trader, and four of his companies filed for bankruptcy reorganization last month, citing debts of $400 million to $500 million.John Sawyer, a spokesman for Benton’s Concord Group of companies in Denver, said Friday it is too early in the Chapter 11 bankruptcy proceeding to tell what settlements might be reached.

WPPSS spokesmen said it is too early to tell how much - if anything - the utility can expect to receive from Benton’s reorganized companies.

But any loss will be absorbed by ratepayers who get electricity from the Bonneville Power Administration, said George Tupper, WPPSS director of communications and external affairs.

WPPSS becomes an unsecured creditor, meaning it has no collateral to collect in lieu of cash from Nuexco, Tupper said.

The deal also may have violated a WPPSS policy forbidding unsecured sales of uranium, Tupper said. “The Executive Board has insisted on security coverage for all nuclear fuels transactions,” he said.

Don Carter, a WPPSS Executive Board member, said the issue is being studied.

The uranium was from a stockpile the supply system began buying in the 1970s, when it planned to build five nuclear reactors. Only one was finished, but the supply system continued to obtain uranium fuel for them until May 1994, when the decision was made to terminate the final two plants.

WPPSS spokesman Richard Romanelli said Nuexco would “borrow” uranium from utilities across the nation and sell it on the spot market.

In the past four years, Nuexco has borrowed millions of pounds of uranium from utilities, planning to repay them with cheap uranium imported from the former Soviet Union and Russia.

But the United States banned Russian uranium imports because they were being “dumped” - sold for less than what it cost to be produced in the United States - and hurting U.S. companies.

The U.S. ban went into effect before Nuexco could repay the borrowed uranium, and Benton’s efforts to open U.S. uranium mines fell short of expectations because of higherthan-anticipated costs.

In WPPSS’ case, uranium expected to be in storage for years until it could be made into reactor fuel suddenly was producing revenue under the borrowing plan.

When Nuexco borrowed its uranium, WPPSS had secured letters of credit for it.

But that changed when Benton bought - rather than borrowed - $11.7 million worth of uranium, Romanelli said. As security, Benton offered contracts with Energy Fuels Corp., another company he owned.