BETHESDA, Md. – United States Enrichment Corporation, a subsidiary of Centrus Energy Corp. (NYSE: LEU), today returned full control of the 750-acre uranium enrichment complex near Paducah, Ky. to the U.S. Department of Energy (DOE). The transfer of control occurred at 7:00 a.m. CT and followed a year-long process to prepare the plant for a return to full DOE control.
United States Enrichment Corporation had leased the Paducah Gaseous Diffusion Plant from DOE since it was privatized by the U.S. Government in 1998 and enriched uranium there for the global nuclear fuel market until May 2013. DOE has responsibility for the decontamination and decommissioning of the 60-year old complex and has contracted with Fluor Federal Services, Inc. to begin deactivation activities at the site.
“For more than a decade, United States Enrichment Corporation employees in Paducah operated this plant at record-high levels of productivity in a safe and environmentally responsible manner,” said Steve Penrod, vice president of American Centrifuge for Centrus and former general manager at Paducah. “When enrichment ceased in 2013, this same team came together to safely and diligently wind down operations and work closely with DOE to effect a smooth and successful de-lease and return of full control of the site to DOE. I want to thank them and our counterparts at DOE for the tremendous efforts that led to this successful outcome.”
John Castellano, interim president and chief executive officer of Centrus, added, “With the successful handover of the Paducah plant complete, Centrus can focus on serving its utility customers, improving its business and maintaining the American Centrifuge technology for national security needs and future commercial deployment. We are well positioned to deliver value to our customers and shareholders as a smaller company with a stronger balance sheet.”
Castellano noted that the turnover of the Paducah plant to DOE will have no effect on customers or their deliveries.
Turnover activities began in May 2013 when United States Enrichment Corporation ceased enrichment at the plant because its high cost of operations made it uncompetitive in a depressed global nuclear fuel market. In early 2014, the Company began the process of repackaging inventory and moving it to other licensed storage locations. All transfers of enriched uranium product to off-site licensed locations were completed by April 2014. Other turnover activities and facility preparations continued in anticipation of a fall 2014 turnover to DOE.
The Paducah Gaseous Diffusion Plant, built in the 1950’s as a government owned and operated facility, supplied enriched uranium for national security and energy production for 60 years. In its initial years of operation, it was an integral part of the country’s production of enriched uranium for national security purposes. Later in its life, it supplied nuclear fuel to commercial nuclear reactors in the United States and around the world to produce clean, reliable electricity. The plant also served as the U.S. destination for low enriched uranium fuel produced in Russia during the recently concluded Megatons to Megawatts program, which transformed the equivalent of 20,000 Russian nuclear warheads into fuel for commercial nuclear power plants.
Over its 60-year history, the Paducah plant helped fuel western Kentucky’s regional economy. The plant’s management and workforce gave generously to support community service projects, charities and schools. The local community consistently supported the plant, as did local, state and federal legislators, who recognized both the local and national benefits of the plant.
Nothing about the Paducah Gaseous Diffusion Plant is small. During its operations, it produced more than 300 million SWU, or separative work units, a measure of nuclear fuel production, enough to fuel every U.S. reactor for 25 years. The plant covers 750 of the 3,425 acres on the Federal site. It is comprised of 161 buildings, including four giant process buildings, each averaging 74 acres under roof.
Centrus Energy Corp. is a trusted supplier of enriched uranium fuel for a growing fleet of international and domestic commercial nuclear power plants. Centrus is working to deploy the American Centrifuge technology for commercial needs and to support U.S. energy and national security.
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 Centrus Energy Corp., particular risks and uncertainties that could cause our actual future results to differ materially from those expressed in our forward-looking statements include, uncertainty regarding our ability to maintain the listing of our common stock on the NYSE; uncertainty of our ability to improve our operating structure, financial results and profitability following emergence from Chapter 11; risks related to the ongoing transition of our business, including the impact of our ceasing enrichment at the Paducah gaseous diffusion plant and uncertainty regarding our ability to deploy the American Centrifuge project; risks related to the underfunding of our defined benefit pension plans and potential actions the Pension Benefit Guaranty Corporation could pursue in connection with ceasing enrichment at the gaseous diffusion plants or with any demobilization or termination of the American Centrifuge project or otherwise including the involuntary termination of the plans, imposition of liens or requiring additional funding; the impact of uncertainty regarding our ability to continue as a going concern on our liquidity and prospects; and other impacts of United States Enrichment Corporation, a subsidiary of Centrus, ceasing enrichment at the Paducah gaseous diffusion plant and returning the plant to DOE; the continued impact of the March 2011 earthquake and tsunami in Japan on the nuclear industry and on our business, results of operations and prospects; the impact and potential extended duration of the current supply/demand imbalance in the market for low enriched uranium (“LEU”); uncertainty concerning customer actions under current contracts and in future contracting due to the delay and uncertainty in deployment of the American Centrifuge technology and/or as a result of changes required due to our cessation of enrichment at Paducah; the potential for DOE to seek to terminate or exercise its remedies under the 2002 DOE-USEC agreement, or to require modifications to such agreement that are materially adverse to Centrus’ interests; changes in U.S. government priorities and the availability of government funding or support, including loan guarantees; risks related to our ability to manage our liquidity without a credit facility; our dependence on deliveries of LEU from Russia under a commercial supply agreement (the “Russian Supply Agreement”) with a Russian government entity known as Techsnabexport (“TENEX”) and limitations on our ability to import the Russian LEU we buy under the Russian Supply Agreement into the United States and other countries; risks related to actions that may be taken by the U.S. Government, the Russian Government or other governments that could affect our ability or the ability of TENEX to perform under the Russian Supply Agreement, including the imposition of sanctions, restrictions or other requirements; risks related to our ability to sell the LEU we procure under our fixed purchase obligations under the Russian Supply Agreement; the decrease or elimination of duties charged on imports of foreign-produced LEU; pricing trends and demand in the uranium and enrichment markets and their impact on our profitability; movement and timing of customer orders; changes to, or termination of, our agreements with the U.S. government; risks related to delays in payment for our contract services work performed for DOE, including our ability to resolve certified claims for payment filed by United States Enrichment Corporation under the Contracts Dispute Act; the impact of government regulation by DOE and the U.S. Nuclear Regulatory Commission; the outcome of legal proceedings and other contingencies (including lawsuits and government investigations or audits); the competitive environment for our products and services; changes in the nuclear energy industry; the impact of volatile financial market conditions on our business, liquidity, prospects, pension assets and credit and insurance facilities; the timing of recognition of previously deferred revenue; and other risks and uncertainties discussed in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and quarterly reports on Form 10-Q. Revenue and operating results can fluctuate significantly from quarter to quarter, and in some cases, year to year. We do not undertake to update our forward-looking statements except as required by law.
Media: Jeremy Derryberry (301) 564-3392
Investors: Steven Wingfield (301) 564-3354