When USEC (NYSE:USU) stops enriching uranium at its gaseous diffusion plant in Paducah, Ky., the Tennessee Valley Authority (TVA) will be losing one of its largest customers.
USEC said May 24 that it had failed to reach a deal for the short-term extension of its uranium enrichment work at Paducah. The company will cease enriching uranium for nuclear power plants at the end of May.
USEC Inc. is the largest of TVA’s 57 directly served customers, which include major industrial facilities and federal installations, TVA representative Duncan Mansfield said May 28.
Power sales from USEC represented 5% of TVA’s total operating revenues of about $11.2bn for FY 2012, the TVA representative said.
“TVA, while working to find a solution for USEC, anticipated the possible loss of USEC load and has planned for this outcome in forecasted projections. So we expect the impact to be manageable as they reduce operations,” Mansfield said in an email to GenerationHub.
The planned closure of Paducah is the latest bad news for USEC. At mid-day May 28 its stock was trading at only 36 cents per share and appears to have stayed below 80 cents per share for the past six months.
Ky. lawmakers seek DOE meeting on USEC
U.S. Senate Majority Leader Mitch McConnell and two fellow congressional Republicans from Kentucky, Sen. Rand Paul and Rep. Ed Whitfield have asked to meet with new Energy Secretary Ernest Moniz about the Paducah facility.
“We are disappointed the Obama Administration and DOE were unable to come to an agreement to extend operations at the Paducah Gaseous Diffusion Plant for another four months,” the Kentucky trio of lawmakers said in a statement. “We will work to ensure that DOE fulfills its responsibility to sufficiently cleanup the site and determine a long-term solution to utilize the facility and its assets,” the lawmakers said.
The Paducah plant is the only domestically-owned and operated uranium enrichment facility in the United States. USEC leases the plant from the U.S. Department of Energy (DOE).
“While we have pursued possible opportunities for continuing enrichment, DOE has concluded that there were not sufficient benefits to the taxpayers to extend enrichment. I am extremely disappointed to say we must now begin to take steps to cease enrichment,” said USEC Senior Vice President and COO Robert Van Namen.
“We will continue to meet our customers’ orders from our existing inventory, purchases from Russia under the historic Megatons to Megawatts program and our transitional supply contract with Russia that runs through 2022,” Van Namen said.
The USEC official was referring to the historic program to convert Russian nuclear bomb material to usable nuclear fuel for U.S. nuclear plants.
USEC continues to work on replacing its energy-intensive gaseous diffusion process through continued research and development into the American Centrifuge technology.
USEC will take steps to cease enrichment at the Paducah plant over the next month and to prepare the plant site for return to DOE. USEC expects to continue operations at the site into 2014 in order to manage inventory, continue to meet customer orders and to meet the turnover requirements of its lease with DOE.
USEC has encountered plenty of obstacles since the United States Enrichment Corp., was spun off from DOE as part of an initial public offering in 1993. The USEC privatization was a product of the Energy Policy Act of 1992.
Two decades after USEC was taken private, the federal government is again looking at making TVA a private entity. TVA gets most of its generation from coal and nuclear power.
USEC used to have two gaseous diffusion plants. But its facility in Piketon, Ohio, was closed in 2001 when operations were consolidated with Paducah.