With its self-imposed June 30 deadline for a commitment on a conditional loan guarantee from the U.S. Department of Energy unmet, USEC says it is now “most likely” looking at further cutbacks and a reduction of future investment in its planned American Centrifuge Project at Piketon.

“We are reaching a critical point regarding continued funding for the American Centrifuge Project. We need to obtain a conditional commitment for the loan guarantee from DOE,“ the company said nearly two months ago.

At the same time it said it needed to close on the $50 million second phase of the strategic investment by Toshiba and B&W during this second quarter of 2011 to maintain the current spending level on the ACP, while maintaining compliance with its credit facility covenant that limits its spending on the ACP.

The company did not say when asked Wednesday if it plans further layoffs of workers connected with the ACP, or if it will be stopping the Lead Cascade program.

USEC, an 18-year-old private corporation, has invested more than $1.9 billion in the ACP and has operated centrifuges as part of its Lead Cascade test program for more than 500,000 machine hours. That is sufficient, company officials say, to demonstrate that the machines can be successfully manufactured and installed for commercial use.

It needs additional financing to complete plan construction and has significantly demobilized construction and machine manufacturing activities for the project until it has that financing.

Officials said the company’s ability to continue spending will be subject to its cash flow from operations and liquidity, including restrictions in its credit facility for ACP spending.

“We are mindful of our liquidity and credit facility limitations,” USEC CEO John Welch said in the May 4 conference call.

The company needs to see action toward the conditional commitment in the very near term, he said.

“We haven’t said that they will pull out, nor have we said that we will stop work on the centrifuge project on June 30,” said Angie Duduit, American Centrifuge public affairs manager Wednesday. “We also noted our credit facility limitations and, absent the clear path provided by a conditional commitment, we cannot go on spending indefinitely. We do not expect that work will stop on June 30, but the situation remains urgent.”

As part of the determination on whether DOE will issue the $2 billion loan guarantee to USEC, the Nuclear Regulatory Commission is investigating the corporation’s economic viability, in particular whether it is using its free cash flow to buy back outstanding shares of stock, according to a report on hearings in Congress in a House Subcommittee on Energy ad Power.

The subcommittee is hearing testimony on bills cosponsored in the Senate by Kentucky’s Republican Senators Mitch McConnell and Rand Paul. They seek to initiate a pilot program to re-enrich depleted uranium “tails” that would keep the Paducah, Ky., gaseous diffusion plant operating beyond 2012 and help pay for cleanup work at Piketon.

G. SAM PIATT can be reached at (740) 353-3101, ext. 236, or spiatt@heartlandpublications.com.