BETHESDA, Md. – USEC Inc. (NYSE:USU) is continuing to support the American Centrifuge project pending further efforts to obtain federal funding for a centrifuge Research, Development and Demonstration (RD&D) program proposed by the U.S. Department of Energy (DOE). The RD&D program will further demonstrate the technical readiness of the American Centrifuge technology for commercialization and will help to ensure that a U.S. enrichment technology is available to meet vital national security, nonproliferation and energy security goals.
Secretary of Energy Steven Chu and the Administrator of the National Nuclear Security Administration, Thomas D’Agostino, have both testified before Congress on the importance of maintaining an indigenous U.S. enrichment capability to meet future national security needs and nonproliferation objectives. To ensure this national capability is available in the future, DOE has included funding for the American Centrifuge RD&D program in its FY2013 budget request to Congress and requested that Congress provide transfer authority to use funds from its existing budget for the RD&D program in FY2012.
USEC has been funding project activities that support the RD&D program since the start of 2012. USEC announced that it plans to continue funding for this purpose through May 31, 2012 as it continues to work with DOE and Congress on securing the government cost-share for the RD&D program. Due to restrictions in the Company’s credit facility, funding can only continue beyond May 31, 2012 if government funding for the RD&D program is secured.
USEC continues to pursue both legislative and non-legislative paths to the federal cost share of the funding for the RD&D program for the balance of government FY2012. The path to provide funding for government FY 2013 has already been identified since the Administration has included that funding in its FY2013 budget request to Congress.
“The USEC Board of Directors is closely monitoring efforts to obtain the federal cost share for 2012. Given the progress made to date, along the legislative and non-legislative paths towards obtaining funding, the Board has authorized continued limited spending in support of the RD&D program,” said John K. Welch, USEC president and chief executive officer.
“We continue to believe that the success of this technology is the best path to provide USEC shareholders with enhanced long-term value. The Administration and Congress have been supportive of this innovative enrichment technology, and we will continue to work with them to achieve a funding solution for the RD&D program by the end of May. Our continued financial support for the cost-sharing RD&D program is not open ended and is limited by our credit facility. As a result, federal funding needs to be in place in the very near term.
“The RD&D program provides the bridge to commercialization of the American Centrifuge technology. Our plan for the RD&D program is to operate a commercial-size cascade and related plant infrastructure, which should reduce any remaining technical risks and also enhance our ability to obtain financing for the commercial plant. We would expect to update our application for a DOE loan guarantee in 2013,” Welch said.
The RD&D program will support building, installing and operating a 120-machine cascade and related support systems that will be replicated in 96 identical cascades in a full commercial plant in Piketon, Ohio. The program will support 2,000 jobs across the country, especially in Ohio, Pennsylvania, West Virginia, Alabama, Tennessee, Michigan and Indiana. It will also preserve the U.S. government’s ability to produce enriched uranium to support U.S. national security needs.
USEC Inc., a global energy company, is a leading supplier of enriched uranium fuel and nuclear industry related services for commercial nuclear power plants.
Forward Looking Statements
This news release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 – that is, statements related to future events. In this context, forward-looking statements may address our expected future business and financial performance, and often contain words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “will” and other words of similar meaning. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For USEC, particular risks and uncertainties that could cause our actual future results to differ materially from those expressed in our forward-looking statements include, but are not limited to: risks related to the ongoing transition of our business, including uncertainty regarding the continued operation of the Paducah gaseous diffusion plant beyond May 2012 and uncertainty regarding continued funding for the American Centrifuge project and the impact of decisions we may make in the near term on our business and prospects; the impact of the March 2011 earthquake and tsunami in Japan on the nuclear industry and on our business, results of operations and prospects; the outcome of ongoing discussions with DOE regarding the RD&D program, including uncertainty regarding the timing, amount and availability of funding for such RD&D program and the dependency of government funding on Congressional appropriations and the potential for us to make a decision at any time to further reduce spending and demobilize the project based on the timing and likelihood of an agreement with DOE and any government funding; the impact of any conditions that are placed on us or on the American Centrifuge project in connection with or as a condition to the RD&D program or other funding, including a restructuring of our role and investment in the project; limitations on our ability to provide any required cost sharing under the RD&D program; the ultimate success of efforts to obtain a DOE loan guarantee for the American Centrifuge project, including the ability through the RD&D program or otherwise to address the concerns raised by DOE with respect to the financial and project execution depth of the project, and the timing and terms thereof; the impact of actions we have taken or may take to reduce spending on the American Centrifuge project, including the potential loss of key suppliers and employees, and impacts to cost and schedule; the impact of delays in the American Centrifuge project and uncertainty regarding our ability to remobilize the project; the potential for DOE to seek to exercise its remedies under the June 2002 DOE-USEC agreement; restrictions in our credit facility that may impact our operating and financial flexibility and spending on the American Centrifuge project; changes in U.S. government priorities and the availability of government funding, including loan guarantees; the competitive environment for our products and services; changes in the nuclear energy industry; and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K that is available on our website www.usec.com. We do not undertake to update our forward-looking statements except as required by law.
Media: Paul Jacobson (301) 564-3399
Investors: Steven Wingfield: (301) 564-3354