USEC’s American Centrifuge RD&D Program Continues Progress

Dec. 6: BETHESDA, Md. – USEC Inc. (NYSE: USU) and its subsidiary American Centrifuge Demonstration, LLC recently amended their cooperative agreement with the Department of Energy (DOE) to provide for additional federal funds of $45.7 million through February 23, 2013. This funding for the American Centrifuge research, development and demonstration (RD&D) program was made available pursuant to the six-month continuing appropriations measure passed by Congress and signed by the President on September 28, 2012.

“USEC and our partners have made solid progress since June in manufacturing AC100 centrifuge machines and preparing the American Centrifuge Plant for the systems infrastructure needed for the demonstration cascade,” said John K. Welch, USEC president and chief executive officer.

“We continue to work very closely with DOE officials on the RD&D program, and we appreciate the support of the Obama Administration and the bi-partisan support of Congress that this additional funding represents. As we work to obtain the remainder of the federal cost-sharing funds that are essential to successfully complete the objectives established for the RD&D program, we are pleased to be able to report that the program is within budget and on schedule,” Welch said.

The amendment for additional funding comes as the RD&D program moves into the next phase of construction for the 120-machine demonstration cascade. During this phase, machine operations in the current lead cascade at the American Centrifuge Plant facilities in Piketon, Ohio, is being suspended for a planned electrical power outage. The several-month outage will allow for the construction and installation of fully redundant support infrastructure systems necessary to operate the demonstration cascade.

Once the new support infrastructure systems are installed and tested, AC100 centrifuge machines will be installed to complete the 120-machine demonstration cascade, which will operate in a commercial plant configuration. The demonstration cascade is expected to be the first of 96 identical cascades that will make up the commercial American Centrifuge Plant.

During the scheduled outage at Piketon, centrifuge machine operations, including reliability testing, will continue at USEC’s test facility in Oak Ridge, Tenn. In addition, AC100 machines will continue to be manufactured and assembled throughout the RD&D program.

Other Recent Program Achievements

The RD&D program has made steady progress since USEC and DOE signed the cooperative agreement in June. Recent highlights include:

  • DOE has certified completion of Performance Indicator A, 10 machine years runtime with a safety enhancement; and USEC has submitted paperwork to DOE for certification of its completion of Performance Indicator B, demonstration of AC100 production capability by manufacturing, assembling and delivering 78 centrifuges.
  • More than 100 of the 120 centrifuges needed for the demonstration cascade have been assembled and centrifuge manufacturing continues.
  • All six service modules for the demonstration cascade have been welded into place and connected. The service module is a critical component of the process systems and provides the utilities to operate and connect the centrifuges with the cascade.
  • DOE has certified completion of two of the five program technical milestones. The remaining three are due at the end of 2013 in conjunction with the completion of the program.

The RD&D program employs 169 companies from 28 states to support construction, manufacturing and operations activities. USEC and the program’s prime contractors and suppliers have added 160 workers since June, raising the project workforce to more than 1,000 workers.

Background: RD&D Program

The cooperative agreement provides funding for the cost-share RD&D program for the American Centrifuge project to enhance the technical and financial readiness of the centrifuge technology for commercialization.  The cooperative agreement provides for 80 percent DOE and 20 percent USEC cost sharing for work performed during the period June 1, 2012, through December 31, 2013, with a total estimated cost of $350 million. DOE’s total contribution would be up to $280 million and USEC’s contribution would be up to $70 million. DOE’s contribution is incrementally funded.  The cooperative agreement provided initial DOE funding of $87.7 million, and the amendment increases the obligated DOE funding to $133.4 million. USEC will provide cost sharing equal to 20 percent, or $33.3 million, for a total of $166.7 million in program funding through February 23, 2013. USEC will continue to work with Congress and DOE to fully fund the RD&D program through December 2013.

USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel and nuclear industry related services for commercial nuclear power plants.

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