Centrus Energy is almost finished with decontamination and decommissioning of its American Centrifuge demonstration project at the Energy Department Portsmouth Site in Ohio, President and CEO Daniel Poneman said Thursday.
“All the machines and plant equipment have been removed and are set for disposal, we have a few more limited tasks to wrap up,” Poneman said during a conference call on the Bethesda, Md., company’s quarterly and year-end earnings results. The former deputy energy secretary didn’t offer any additional details on what the remaining tasks might include.
Most of the work was completed by the end of 2017, according to Centrus management.
The demonstration, which involved a 120-machine cascade and related equipment, was housed in one of the two existing centrifuge process buildings at the DOE complex, separated from the Portsmouth Gaseous Diffusion Plant. By contrast, a full-scale commercial plant might include 96 cascades split between the two process buildings, according to Centrus.
Centrus began D&D on its AC100 demonstration cascade in 2016. The technology demonstration ended in February of that year, after Centrus had temporarily self-financed the project after the Department of Energy cut off funding. Since 2014, Centrus has done limited research and development of the technology at DOE’s Oak Ridge National Laboratory in Tennessee.
Centrus spent $15.7 million on advanced technology licensing and D&D costs in 2017, $32.2 million below the 2016 amount, executives said Thursday.
The $16 million, one-year contract Centrus signed in October with Oak Ridge National Laboratory prime UT-Battelle should help the company make improvements to the AC100 machine ready whenever the market needs it, Poneman said.
Centrus Energy paid all of the D&D expenses with cash, company spokesman Jeremy Derryberry said by email after the call. Management had set aside a $19 million line item for future D&D work in 2016. The line item covers anything spent on the advanced technology not covered by the Oak Ridge contract, he added.
Centrus expects to return its demonstration facility license to the Nuclear Regulatory Commission in the summer, which will mark the official end of the project, Poneman said during the call.
Centrus Energy provides fuel to commercial nuclear plants and also supports U.S. national security efforts. The company has experienced hard times in recent years with the closure of commercial enriched uranium plants at DOE sites at Portsmouth, Ohio, and Paducah, Ky.
The former United States Enrichment Corp. emerged from Chapter 11 bankruptcy protection in September 2014 with a new name, Centrus Energy.
“It has now been three years since I accepted the challenge of leading this company out of bankruptcy,” Poneman said. Centrus has faced “headwinds” including rival enrichment companies dominated by state-owned enterprises, he added.
“I believed then, as I believe today, that the United States needs a domestic uranium enrichment capability in order to protect and defend our energy security and national security challenges,” Poneman said.
In 2017, Centrus restructured much of its long-term debt, lined up new fuel supply and sales contracts, and diversified the business operations, Poneman said.
During the fourth quarter, Centrus reported net income of $35.5 million, or $3.69 per common share, which was far better than the net loss of $8.2 million, or $0.90 per share, in the last quarter of 2016. For 2017 as a whole, Centrus earned $12.2 million in net income, or $0.58 per share, beating a net loss of $67 million, or $7.36 per share in 2016.
Centrus reported fourth-quarter revenue of $116.9 million, down 14 percent from $136.5 million during the same period in 2016. Full-year revenue dropped by 30 percent, from $311.3 million in 2016 to $218.4 million during the past year. The company expects total revenue between $170 and $200 million in 2018.
Centrus has been diversifying its business by buying and selling separative work units (SWU) on the international market. SWU stands for the effort necessary to separate uranium-235, which can sustain a fission reaction, and uranium 238, which is non-fissile. It is a commonly used benchmark for trading in the uranium enrichment market.
The customer base for this trading business has been growing, Poneman said, although the value of the new contracts is lower than the company’s legacy contracts, which are coming to a close. Centrus blunts the impact of the falling prices by being both a buyer and a seller, he added.
In addition, a 2017 memorandum of understanding with X-energy, to work on fuel research for advanced nuclear reactors, should help Centrus retain its highly skilled staff of scientists, engineers, and other professionals until the domestic enrichment industry rebounds, Poneman said. The agreement could eventually culminate in Centrus supplying fuel to X-energy and other advanced reactor developers.
