March 17, 2014

DOE LOOKS TO BUY CENTRIFUGES FROM USEC FOR R&D PROGRAM

By ExchangeMonitor

In an option that could keep USEC’s American Centrifuge Project funded beyond the end of the month, the Department of Energy announced yesterday that it is considering acquiring at least 40 AC100 centrifuges from the company. In return for the machines, DOE would take title to a portion of USEC’s depleted uranium tails and accept responsibility for eventual disposal of the material. The centrifuges would be used in a DOE research, development and deployment cost-share program aimed at commercializing USEC’s centrifuge plant. With a credit facility currently funding the program set to run out at the end of May, beleaguered USEC has been hoping for DOE to step in to keep the project running. In January the Department took title to $44 million USEC tails liability as part of an interim funding measure for the R&D program, and USEC has about $82 million tails liability remaining. DOE did not specify the amount of liability that it would take on in the Notice of Intent posted yesterday to award a sole source contract to USEC, which has a response due date of May 29.

However, yesterday’s notice does not constitute a commitment to buy the centrifuges, DOE emphasized. “The Department is evaluating several options to move the project forward this year that would enable continued investment in the development of this technology while protecting taxpayer interests. The purchase of some of the centrifuge machines is just one of a few possible options under consideration. No final decisions have been made,” DOE spokeswoman Jen Stutsman said in a written response. The Department is expected to continue evaluating options for the project, keeping in mind the June 1 financing deadline the company faces.

The announcement comes after the House last week authorized $150 million for the R&D program in the Defense Authorization Act, which followed bitter debate between lawmakers on the merits of the program, with some claiming that the funding amounted to an earmark for USEC. DOE officials have said that they would not support the program without clear signal from Congress. Some USEC backers believe that the House legislation provides such a signal when coupled with the Senate version of the transportation bill, which gives DOE $150 million transfer authority for the program in Fiscal Year 2012. It remains to be seen how officials will address intellectual property questions surrounding the technology, which was originally developed by the Department. DOE Secretary Steven Chu said earlier this year that he would not fund the USEC program until those questions had been resolved.

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