USEC shareholders hear that American Centrifuge made significant progress in 2008 Recent trade actions, steady SWU prices, and customer demand create favorable environment
– By Abby Gessner –
Shareholders elect directors:
John K. Welch, USEC president and chief executive officer, told shareholders attending the USEC Inc. annual meeting today that the company made “significant progress” in deploying the American Centrifuge Plant over the past year but warned that further delays in receiving a loan guarantee could result in additional slowdown of the project.
USEC is constructing the American Centrifuge Plant in Piketon, Ohio, and has successfully demonstrated its cutting-edge uranium enrichment technology through its Lead Cascade integrated testing program since August 2007.
“Bottom line, we continue to make significant progress in deploying the American Centrifuge technology in a state-of-the-art commercial plant,” said Welch. “We are committed to the project and have continued to move forward on critical path activities because we believe that ACP is our best vehicle for building shareholder value.”
Despite slowing the expected ramp-up in plant construction in 2009, Welch pointed to continued progress in constructing the plant. “As you know, we did not increase our capital spending on the project as planned early in 2009, but we did not stop work.
“We continue to work on manufacturing start-up activities and plant critical path items. This ensures that we will be in position to accelerate the project once we have greater certainty on potential funding from the DOE Loan Guarantee Program.”
Welch also pointed to recent success on several international trade issues as reasons for optimism. These include a unanimous U.S. Supreme Court verdict, along with federal legislation and a trade agreement regarding Russian imports. “Importantly, these legal and diplomatic developments provide greater assurance that the deployment of new enrichment technology will not be threatened by dumped imports from foreign, government-owned enrichers.”
He also noted that these legal and diplomatic developments had helped to level the playing field for USEC’s negotiations with Russia and its executive agent regarding the purchase price of SWU (separative work units) bought from Russia during the final years of the Megatons to Megawatts program. The price paid Russia during 2008-2009 increased more than the average price paid by customers, but during 2010-2013 a new pricing methodology is expected to enhance the stability of future pricing for both parties through a formula that combines a different mix of price points and other pricing elements.
Welch noted that SWU prices have held firm despite the recent downturn in energy prices. Highlighting recent commitments by customers to purchase more than half of the American Centrifuge Plant’s initial, planned sales, Welch expressed confidence “that we are building the American Centrifuge Plant at exactly the right time to meet the needs of our customers for decades to come. Baseload, cost-effective nuclear power generation should continue to be the preferred option in a carbon constrained environment.”
During the meeting, shareholders voted to reelect the 10 directors for a one-year term. Shareholders also approved an employee stock purchase plan, an equity incentive compensation plan and ratified the appointment of the Company’s independent auditors, PricewaterhouseCoopers LLP.
USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel for commercial nuclear power plants.