Centrifuge project will ensure the security of thousands of jobs created across the country
– By Stephen Heiser –
USEC Inc. has announced that it expects the U.S. Department of Energy (DOE) to make a decision on a conditional commitment for a loan guarantee by early August. A loan guarantee conditional commitment would allow USEC to continue deployment of its American Centrifuge Plant, currently being built in Piketon, Ohio, and would ensure the security of thousands of jobs created across the country by the plant’s construction and manufacturing activities.
The Company also said that at the direction of its board of directors it is preparing demobilization plans for the American Centrifuge Plant if it does not receive a conditional commitment by early August. USEC announced in February a slowdown in the planned escalation of spending on the project and has stated that a further delay in obtaining a DOE loan guarantee would require the Company to implement further project spending reductions.
“Based on on-going discussions with DOE, we expect a decision on a conditional commitment by early August,” said Philip G. Sewell, senior vice president of American Centrifuge and Russian HEU. “We believe our project is ideally suited for the loan guarantee program. It will use an innovative technology, reduce greenhouse gas emissions and create immediate jobs in the United States.”
“Over the past several months, we have had numerous discussions with the Department. We will continue to work closely with DOE as we seek to move forward on this vital project,” said Sewell.
“As we have stated in the past, a DOE loan guarantee is our path forward for financing the American Centrifuge Plant. Therefore, we are making contingency plans for project demobilization should we not receive a conditional commitment or should a decision on a conditional commitment be further delayed.”
Demobilization could be initiated in August and would involve the partial or full halt of certain American Centrifuge project activities and plant construction. Even if a conditional commitment is provided by early August, demobilization may be initiated if the terms of such conditional commitment are not acceptable or if subsequent progress toward achieving actual funding later this year under the loan guarantee is not maintained.
The American Centrifuge project supports over 5,700 jobs today and over 2,300 more jobs would be created within a year once loan guarantee funding commences. Because of the cash conservation measures initiated in February due to the lack of certainty on DOE funding, the project has already delayed the expected ramp-up in hiring. Demobilization, if initiated, would include significant layoffs of USEC and contractor personnel in Ohio and a number of other states.
USEC has invested nearly $1.5 billion in the American Centrifuge project and needs a DOE loan guarantee to secure the substantial portion of the remaining financing needed to complete the project. USEC submitted its application to DOE in 2008 and has been working closely with DOE to expedite the process.
As America’s only commercial uranium enrichment facility using U.S.-owned and operated centrifuge technology, the American Centrifuge Plant will play an important role in America’s energy security and national security.
The American Centrifuge Plant represents the early commercial use of a new technology, and it significantly reduces emissions of air pollutants and greenhouse gases. USEC has invested nearly $1.5 billion in the American Centrifuge project, including hundreds of millions of dollars to help rebuild portions of America’s nuclear industrial manufacturing base. The project is expected to create over 8,000 new jobs as manufacturers add new employees across the United States.
USEC is deploying the American Centrifuge technology to provide the dependable, long-term, U.S.-owned and developed nuclear fuel production capability needed to support the country’s nuclear power plants. The American Centrifuge technology is based on U.S. gas centrifuge technology originally developed by DOE but with significant design, material and manufacturing improvements incorporated by USEC. The Company received a license in April 2007 from the U.S. Nuclear Regulatory Commission to construct and operate the plant and commenced construction shortly thereafter. The plant is designed to produce 3.8 million separative work units (SWU) a year of low enriched uranium fuel for commercial nuclear power plants.
USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel for commercial nuclear power plants.