Kenneth Fletcher
NS&D Monitor
1/31/2014
USEC and the Department of Energy this week launched a nearly three-month extension of a cost-share program supporting USEC’s American Centrifuge technology during which additional tests will be performed. The extension, running from Jan. 29 until April 15, will use about $5.9 million of USEC funds and $23.05 million in DOE funds. The money was part of the $62 million for the program provided in the omnibus Fiscal Year 2014 spending bill passed by Congress this month. The extension will include “an additional milestone requiring the Company and DOE to agree upon parameters and success criteria to test a range of cascade operational parameters and configurations expected to be utilized during enrichment operations,” according to a USEC filing this week with the Securities and Exchange Commission. “It also amends the scope of work to include work related to the additional cascade testing and to support DOE analysis of the technology.”
The research, demonstration and development program had originally been set to wrap up after 18 months at the end of 2013, and USEC has met the goal of building and demonstrating a full commercial demonstration cascade of centrifuge machines. However, the company and DOE have sought to extend the program, as USEC can’t support it on its own due to financial troubles—the company announced late last year that it plans to file for Chapter 11 bankruptcy in 2014. DOE had originally budgeted $280 million for the RD&D program, but only spent $256.9 million to complete it. “The Amendment provides additional government obligated funds of approximately $5.9 million, bringing total government obligated funding to approximately $263 million,” USEC said in its SEC filing.
What Happens After Extension?
It’s unclear what the next step for American Centrifuge will be after the extension runs out—DOE did not respond to request for comment this week and USEC did not elaborate this week on the possibilities. After the extension there will still be money left over from the $62 million provided by Congress. Additionally, the omnibus bill provides an additional $56.65 million contingent on a DOE cost-benefit analysis of potential domestic enrichment technologies for national security needs—money that could potentially go to another project. The Department and USEC have stressed the need for a domestic enrichment capacity for national security needs, and DOE late last year launched working groups tasked with examining issues related to uranium enrichment and national security requirements for tritium production.
USEC spokesman Paul Jacobson this week broadly outlined the company’s goals for the three-month extension. “USEC will test the American Centrifuge demonstration cascade in a range of operating parameters and configurations expected to be used during uranium enrichment operations,” he said in a statement. “Through the construction of a 120-machine commercial demonstration cascade and operations for more than 20 machine-years, we have demonstrated that the American Centrifuge technology can be relied on to meet U.S. national security needs. Our continued work will allow us to simulate a range of potential operating conditions while we sustain the U.S. centrifuge technical and industrial base for national security purposes and potential future deployment.”
