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RCED-92-294R 1 (1992-09-23)

handle is hein.gao/gaobackdt0001 and id is 1 raw text is: At 622. UntdStates GAkO General Accounting Office Washington, D.C. 20548 Resources, Community, and Economic Development Division B-250264 September 23, 1992 147822 The Honorable Philip R. Sharp Chairman Subcommittee on Energy and Power Committee on Energy and Commerce House of Representatives Dear Mr. Chairman: This letter responds to your request that we provide additional information to supplement the cash flow projection previously presented in our letter UEC Cash Flow Projection (GAO/RCED-92-292R, Sept. 17, 1992) and that we provide a figure for the present value of the net operating income of the Uranium Enrichment Corporation (UEC) as would be established by the version of H.R. 776 passed by the House. In addition, because the provisions of H.R. 776 require certain payments to the U.S. Treasury, we are providing the net present value of these projected future payments. In summary, we generated a cash flow projection similar to the projection in our September 17, 1992, letter. We extended the cash flow projection through 20111 and made some other minor changes. We then computed the present value of the revised projected net operating income to be about $5.2 billion in 1993 dollars. We note, however, that any estimate of earnings from uranium enrichment operations, whether performed by the UEC or the Department of Energy (DOE), is subject to major uncertainties because of the inherent difficulty in determining the amount and selling price of the enrichment services. Important market developments that are presently unforeseen could imply significant changes in the estimate. We used recent DOE revenue and cost estimates, which are subject to these uncertainties, for its uranium enrichment enterprise and adjusted them to reflect the requirements that would be established under H.R. 776. 'DOE had no projections beyond 2011. RESTRICTED--Not to be released outside the 0/RCED-92-294R, UEC Net Present Value General Accounting Office unless specifically approved by the Office of Congressional RELEASED Relations.

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