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USEC Reports Third Quarter 2012 Results

Stocks in this article: USU

American Centrifuge Update

We are working to deploy the American Centrifuge technology, a highly efficient uranium enrichment gas centrifuge technology. The American Centrifuge technology requires 95 percent less electricity to produce low enriched uranium on a per SWU unit basis than our existing gaseous diffusion technology used at the Paducah plant. We are working to deploy this technology in the American Centrifuge Plant (ACP) in Piketon, Ohio. This new facility would provide us with a long term competitive source of production.

We need significant additional financing in order to complete the ACP. We applied for a $2 billion loan guarantee under the DOE Loan Guarantee Program in July 2008. Instead of moving forward with a conditional commitment for a loan guarantee, in the fall of 2011, DOE proposed the RD&D program.

We began funding the RD&D program in January 2012 and have been building machines and parts for the demonstration cascade. On June 12, 2012, we and DOE entered into a cooperative agreement to provide cost-share funding for the RD&D program. The 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, having a total estimated cost of $350 million. DOE’s total contribution would be up to $280 million, and our contribution would be up to $70 million. The cooperative agreement will be incrementally funded. The June cooperative agreement provided initial DOE funding of $87.7 million and, on September 30, 2012, the president signed a six-month spending measure that contains additional funding for continued work on the RD&D program at an annual rate for operations of $100 million, which we expect to result in $45.7 million of additional funding for the program in the six-month period ending March 31, 2013. The remaining funding from DOE has not yet been authorized and is subject to Congressional appropriations, Congressional transfer or reprogramming authority to permit the use by DOE of funds previously appropriated for other programs, or other sources available to DOE. We will continue working with Congress and the administration to fully fund the RD&D program through December 2013, but there is no assurance that this additional funding will be made available.

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