Centrus Energy Corp. has identified about $9 million worth of pandemic-related expenses at its new enrichment cascade in Ohio and wants the Department of Energy to help defray the costs, the company in a regulatory filing.
“[W]e plan to seek additional funding commitments from DOE for the additional costs,” Centrus wrote Aug. 13 in its latest 10-Q filing with the Securities and Exchange Commission.
In its 2019 contract with Centrus, DOE agreed to provide up to $115 million as part of an 80-20 cost-share arrangement to build a new cascade of 16 AC100 centrifuges that can produce high-assay, low-enriched uranium (HALEU). The fuel has a concentration of 19.75% Uranium-235 by weight. DOE wrote in the contract that “under no circumstances shall the Government Share exceed $115,000.000.”
But Centrus, in its 10-W, said that “we have been experiencing increased delays from vendors and increased costs due to the continuing effects of the COVID-19 pandemic,” and that “COVID-19 related supply chain difficulties may also affect DOE in its supply of equipment that it is required to furnish under the contract.”
On a conference call with investors last week, Centrus CEO Daniel Poneman said that “Centrus has managed to keep our own construction work on track throughout the pandemic.”
Expenses have piled up at the cascade, which is supposed to provide a small HALEU sample for DOE by March 1, 2022. Centrus has already built the cascade of 16 AC100 centrifuges at DOE’s Portsmouth Site in Piketon, Ohio, to do the job. The company still expects that demonstration to begin on time, a spokesperson wrote Monday in a statement to Weapons Complex Morning Briefing.
Centrus’ cost-share contract has a two-year base that calls for building the cascade at Portsmouth — in the same building that once housed the now-decommissioned American Centrifuge Project — and a one-year option to use the cascade to produce a 200-kilogram tranche of HALEU for DOE advanced nuclear reactor projects.
What the contract doesn’t have, Centrus wrote in its latest 10-Q, is any requirement for the company to pick up the tab for overruns, which at deadline had jumped jumped to $8.8 million from an earlier DOE estimate of $2 million to $3 million.
“The Company does not currently have a contractual obligation to perform work in excess of the 2019 initial cost estimate for the HALEU Contract and therefore, no additional costs have been accrued as of June 30, 2021,” Centrus wrote in its latest 10-Q.
There’s a lot riding on the AC100 design for Centrus. The company hopes the technology will not only fuel a new generation of nuclear reactor designs, but also provide for the common defense.
AC100 is one of two technologies the National Nuclear Security Administration (NNSA) was considering as the cornerstone of the next all-domestic, defense-uranium enrich capability needed to produce low-enriched uranium for nuclear-weapons programs starting around the 2050s.
The NNSA has many times postponed the choice between Centrus’ technology and a rival technology developed at the Oak Ridge National Laboratory, most recently after inauguration day.
