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USEC meets milestones for continued funding

PDT Sports Report

July 31, 2012

FRANK LEWIS


PDT Staff Writer


PIKETON, Ohio — USEC Inc. (NYSE: USU) reported Tuesday that it is making steady progress towards the goals of the American Centrifuge research, development and demonstration (RD&D) program. According to Paul Jacobson, Director of Communications for USEC, INC., during the program’s first two months, USEC met the initial program milestone, placed additional AC100 centrifuge machines into service and established an independent board of managers to oversee the program.


The seven-person board is comprised of M. Roger Eshelman, executive vice president and chief operating officer (retired), Savannah River Nuclear Solutions, LLC; Bruce Rash, director, nuclear project management, Exelon Generation Company, LLC; Luis Reyes, executive director for operations (retired), U.S. Nuclear Regulatory Commission; Philip G. Sewell, senior vice president, American Centrifuge and Russian HEU, USEC Inc.; Randall J. Spickard, vice president, business development, Babcock & Wilcox Technical Services Group, Inc.; Robert Van Namen, senior vice president, uranium enrichment, USEC Inc., and Hitoshi Yabuta, vice president, project management, Toshiba America Nuclear Energy Corporation. USEC also met the conditions established in the cooperative agreement to continue funding in the initial budget period.


“Our preparations for the RD&D program during the first half of 2012 allowed us to hit the ground running and to make excellent progress during the past two months,” John K. Welch, USEC president and CEO, said. “With DOE’s approval of the RD&D test program, we will continue to build and install AC100 machines, complete balance of plant systems for a full commercial cascade and operate that cascade to demonstrate technical readiness of the American Centrifuge in a production plant. During the past two weeks, we have begun installing service modules and other control equipment to support the RD&D commercial cascade”


Welch said USEC recently completed the first of five project technical milestones for the RD&D program with the finalization of a test program.


Under the terms of the RD&D program, USEC has begun hiring to support manufacturing and operating additional AC100 machines and expects to complete and operate a 120-machine cascade in a commercial plant configuration in 2013. As of July 31, USEC has built and conditioned with uranium gas approximately 50 AC100 machines for the demonstration cascade. USEC is also finalizing the installation of the first of six service modules.


On June 12, USEC and DOE entered into a cooperative agreement to provide 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 Dec. 31, 2013, having 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. USEC and DOE are initially providing $110 million in cost-shared funding for the program. This is intended to fund the RD&D program through the end of November 2012.


DOE’s portion of the funding for the initial period will come from taking the disposal obligation for a quantity of depleted uranium tails from USEC, releasing $87.7 million in cash that USEC had previously committed as security for future tails disposition obligations. DOE funding is limited to $87.7 million until DOE provides authorization for additional funding.


Federal funding through July 31, 2012, was $26.4 million. On July 31, 2012, after USEC completed a series of actions including completing a detailed cost/schedule review, setting firm dates for the project milestones, establishing the project governance structure and submitting to the Nuclear Regulatory Commission a Foreign Ownership, Control or Influence information package for American Centrifuge Demonstration, DOE authorized an additional $61.3 million of funding, for a total of $87.7 million. The remaining funding of $192.3 million from DOE has not yet been authorized and is subject to the availability of appropriations or other sources of consideration.


Welch said USEC will continue to work with Congress and DOE to pursue opportunities for funding the balance of the RD&D program.


Frank Lewis may be reached at 740-353-3101, ext. 232, or at flewis@heartlandpublications.com.