Second chance for USEC

Wednesday, 5 August 2009

The US Department of Energy (DoE) has agreed to postpone by some six months a final review of USEC's loan guarantee application for the American Centrifuge Plant (ACP) in Piketon, Ohio. The additional time will allow USEC to address the financial and technical concerns that caused the DoE to deny the application only last week.

 

Whether the ACP becomes reality is in the balance (Image: USEC)

The DoE said that it would delay the ultimate review of USEC's application until a series of specific technology and financial milestones have been met. It said that the milestones outlined to USEC are in line with the criteria and legal requirements of the statute of the Energy Policy Act of 2005 and the subsequent loan guarantee regulations, which it said USEC's application did not previously meet. DoE and USEC expect an independent engineer to complete a report in the near-term that will provide "useful input and guidance on the technical issues already identified."

 

In a statement, the DoE said that "the additional time will allow USEC to make efforts to fully address issues DoE has identified relating to the readiness of the company's uranium enrichment technology." It added, "As it has indicated, the department sees promise in the ACP technology, but USEC's application does not meet all the statutory and regulatory standards that would permit the agency to grant a loan guarantee at this time. Both DoE and USEC recognise that meeting these criteria will likely take six months or more."

 

Energy secretary Steven Chu said, "This agreement gives USEC the time it needs to more fully test its technology and develop additional financial support for the project." Steven Koonin, DoE undersecretary for science, commented: "USEC's operating experience on its lead cascade must demonstrate high confidence that machine reliability is commensurate with its facility operating plan." He added, "We have discussed with USEC specific test results that would give such confidence, and we look forward to working with them to that end." USEC president and CEO John Welch said, "The agreement provides a path forward for consideration of our loan guarantee application."

 

Welch was "shocked and disappointed" by DoE's announcement on 28 July that it had denied USEC's application for a loan guarantee. At that time the company said that jobs would be lost as it 'demobilised' - or cancelled - the partially built plant in which it has already invested $1.5 billion.