DOE denies Usec's Loan guarantee application

28 July 2009

Usec says is stopping work on its American Centrifuge Plant, after the US Department of Energy said it will not proceed with the firm’s loan guarantee application. In a 29 July statement Usec urged the Obama administration to ‘review further’ the benefits of the proposed facility.

Meanwhile DOE has encouraged Usec to withdraw its application for funding and instead offered the firm $45 million over the next 18 months to support ongoing ACP research and development activities.

“Should Usec accept this offer, it would allow them to continue operations, maintenance, and research activities at Piketon and Oak Ridge, and give Usec additional time to strengthen the technical and financial aspects of the application should Usec decide to resubmit it,” DOE said in a statement on 28 July.

Energy Secretary Steven Chu said: “While we believe Usec needs time to develop its technology and demonstrate that it can be deployed at a commercial scale, we’re moving forward with other investments that will create good, high-paying jobs in the community.

“Usec will have another chance to resubmit their application if they can overcome the technical and financial hurdles, but in the meantime we’ll put more people to work in the environmental cleanup effort.”

DOE plans to invest $150 to $200 million per year for the next four years to accelerate the cleanup of Cold War facilities at the Portsmouth site, also in Piketon. Between 800 and 1000 jobs will be created, which “will more than offset any job losses among the current 750 workers at the ACP,” DOE said. The new investment will be funded by providing excess uranium from the Department’s existing stockpiles in exchange for services.

Usec’s president and chief executive officer John K. Welch said 28 July that the firm was “shocked and disappointed by DOE’s decision” and that it has been forced to begin demobilization of the project.

“As a result of the current uncertainty regarding DOE loan guarantee funding, we have been forced to begin the process of demobilizing the project and initiating layoffs that will directly affect nearly 2000 current Usec and contractor employees in Ohio and several other states in the near term and indirectly impact thousands more,” Welch said 29 July.

“We believe the American Centrifuge Plant meets the financial and technical requirements of the Department's Loan Guarantee Programme as well as numerous Obama administration policy objectives. Accordingly, we plan to pursue further discussions with DOE to work with them to address any remaining technical and financial concerns they may have,” he said.

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