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American Centrifuge RD& D Program Advances
Last update: 7/29/2013 8:01:00 AM
120 AC100 centrifuges operating, preparing for demonstration of cascade operations
BETHESDA, Md., Jul 29, 2013 (BUSINESS WIRE) -- --DOE funds next increment of program funding through September 30, 2013
--Sixth R D& D program milestone completed; DOE certification pending
--Program remains on budget and on schedule
The research, development and demonstration (RD& D) program to advance USEC Inc.'s (USU) American Centrifuge, America's next generation of uranium enrichment technology, continues to make solid progress in completing program milestones.
Five of the program's nine milestones have been completed and certified by the Department of Energy (DOE). USEC successfully completed the sixth milestone to test the effects of a power loss to the uranium centrifuge machines earlier this month, and DOE certification of that milestone is pending. The three remaining milestones are scheduled for completion by the end of the program in December.
In addition, USEC and its subsidiary American Centrifuge Demonstration, LLC signed an amendment July 24 to the June 2012 RD& D cooperative agreement with DOE that provides an additional $29.9 million in government cost-share, bringing total DOE funding to $227.7 million, sufficient to fund the program through September 30, 2013. The cooperative agreement defines the scope of the RD& D program and establishes an 80 percent-20 percent cost sharing split between DOE and USEC of up to $350 million.
"To date, the program has achieved every milestone ahead of schedule and with solid results. The overall program remains on schedule and on budget," said Paul Sullivan, vice president of American Centrifuge and chief engineer. "The technology works, and we are getting excellent results."
Over the course of this summer, the program completed the integrated systems testing program for the 120-centrifuge commercial cascade, which would be duplicated 96 times in a proposed commercial plant. All of the commercial-grade centrifuges are now spinning individually at target speed, and the process of conditioning the centrifuges and related piping on uranium hexafluoride gas is underway. USEC expects to operate the centrifuges as an interconnected cascade in the fourth quarter, once startup and conditioning actions are completed in the third quarter.
The RD& D program is supported by 169 companies in 28 different states engaged in various construction, manufacturing and operations activities. Earlier this year as the 120-machine cascade was being assembled and installed, more than 300 jobs were added in Ohio, Tennessee and other states, raising the total project workforce to more than 1,100 workers. A full commercial build out of the technology would create more than 8,000 jobs at peak construction.
Beyond proving the reliability and readiness of the American Centrifuge technology, the RD& D program will ensure that the United States has its own indigenous uranium enrichment technology to meet national security needs. With the recent cessation of enrichment at the gaseous diffusion enrichment facility in Paducah, Ky., the United States for the first time in more than 60 years is without its own technology in operation to enrich uranium and today is completely dependent on foreign-controlled technologies for the production of new nuclear fuel that generates almost 20 percent of America's electricity.
Funding
Under the 80-20 split, DOE's total contribution would be up to $280 million, and USEC's would be up to $70 million. With this latest increment, DOE's funding now stands at $227.7 million, which takes the program through the end of the current federal government fiscal year on September 30.
DOE's remaining cost share of up to $52.3 million is conditioned upon the availability of appropriations or other sources of consideration and on USEC continuing to meet all milestones and deliverables on schedule. The company is continuing to work with Congress and the administration to obtain funding for the remaining DOE cost-share needed to fund the RD& D program to completion in December 2013. The administration included transfer authority of $48 million to fund the program in the President's Fiscal Year 2014 budget proposal and the same funding level is in the FY2014 Energy and Water Appropriations bill approved by the U.S. House of Representatives on July 10, 2013 and in the Senate version of the bill reported to the Senate by the Senate Appropriations Committee on June 27, 2013. USEC believes that this level of funding, if provided, would be sufficient to complete the RD& D program, though there are no assurances the additional funding will be made available.
An informational video on the RD& D program can be accessed at . You can also view photographs of the full 120-machine demonstration cascade at .
USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel for commercial nuclear power plants.

USEC Inc. (USU) has struck a deal with the U.S. Department of Energy under which the government unit will raise the level of funding it provides to the research, development and demonstration program for the American Centrifuge project.
Shares of USEC were up 18% to $22.69 in recent premarket trading. The stock has dropped 14% in the past 12 months.
The cooperative agreement provides funding for a cost-share RD& D program for the American Centrifuge project to enhance the technical and financial readiness of the centrifuge technology for commercialization.
The agreement is structured such that DOE pays 80% and USEC 20% for work performed during the period June 1, 2012, through Dec. 31, 2013 with a total estimated cost of $350 million.
USEC said under the deal's newly amended terms, the energy department's total contribution would be up to $280 million and USEC's contribution would be up to $70 million.
The previous agreement provided DOE funding of $197.8 million. The amendment increases the obligated DOE funding to $227.7 million and allowable costs for the RD& D program to $284.6 million through September 30, 2013. USEC will pay 20% of such allowable costs or $56.9 million through September 30 2013.
The Energy Department's remaining cost share under the RD& D program of up to $52.3 million is conditional upon certain conditions, such as USEC continuing to meet all milestones and deliverables on schedule.
In May, USEC said it was unable to reach a deal for the short-term extension of uranium enrichment at the Paducah Gaseous Diffusion Plant in Kentucky and would begin ceasing uranium enrichment at the end of the month. The Paducah plant was the only U.S.-owned and operated uranium-enrichment facility in the U.S. USEC leased the plant from the U.S. Department of Energy.